Post session - Quick review

Investor’s at Dalal Street staged immense confidence before entering the crucial RBI’s Annual Monetary Policy Review on Monday and Greece election on Sunday, which led to sharp uptick of the bourses. After undergoing correction in previous session, 30 share index, Sensex, accumulated over a percent and half points to conclude a little below the 17000 mark. Similarly, the widely followed index Nifty, too rallying over a three fourth points just shied away from 5150 psychological mark by the close of the trade. For the week, both Nifty and Sensex accumulated gains of over a percentage points.

Participating in the global rally, Indian equity markets showcased sanguine moves right from the start of trade. Global stocks rebounded on hopes that major central banks were preparing for coordinated action if the results of Greek elections on Sunday strained global financial markets. Expectations of more monetary stimulus which was boosted by a British plan to flood its recession-hit economy with cash, and after economic data in the United States rekindled talk of more Fed easing, pumping strength in equities across globe.

Closer home, rally at Indian equity markets was clearly led by rate sensitive’s, i.e. Auto, Banking and Realty counters. Stocks from Auto counter accelerated on reports that Automobile industry body SIAM has came forward for preventing a hike on diesel car, stated that Oil Minister S Jaipal Reddy's proposal of additional taxes of up to Rs 2.55 lakh on diesel vehicles should be taken up only after the heavy industries ministry’s approval. Meanwhile, banking and Realty counters rallied on 25 basis points rate cut hopes. Cues from the money market too remained positive as rupee come off the day’s lows and was showing signs of appreciation against the US dollar. On the flip side, fertilizer counter traded on a somber note with hefty cuts after India’s Cabinet Committee on Economic Affairs (CCEA) deferred the Fertilizer Ministry’s proposal to raise the retail prices of urea by 10% to Rs 5,841 per tonne for the financial year 2012-13. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1507:1166 while 155 scrips remained unchanged. (Provisional)

The BSE Sensex gained 275.51 points or 1.65% and settled at 16,953.39. The index touched a high and a low of 16,967.76 and 16,701.28 respectively. 27 stocks were seen advancing against 3 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.50% while Small-cap index was up 0.47%. (Provisional)

On the BSE Sectoral front, Auto up 2.48%, Bankex up 2.18%, Realty up 1.65%, Capital Goods up 1.65% and FMCG up 1.47% were the top gainers while there were no losers.

There top gainers on the Sensex were Tata Motors up 5.40%, ICICI Bank up 2.98%, Coal India up 2.75%, Hindalco Industries up 2.62% and HDFC Bank up 2.56% while, Sterlite Industries down 1.42%, Bajaj Auto down 1.28% and ONGC down 0.52% were the top losers in the index. (Provisional)

Meanwhile, Indian economy is facing stagflation, as per the global financial services firm Moody's, where growth is slow and inflation high and also cautioned that the Reserve Bank of India (RBI) should not be too aggressive in slashing interest rates in its policy meet.

The agency is of the view that with headline inflation inching up to 7.5% y-o-y in May due to supply-side constraints, along with rupee depreciating to record low-levels, sluggish prospects of growth and industrial production, a further rate cut will have an upward pressure on inflation.

The recent fall in the rupee will further push the prices upwards, particularly imported goods and commodities valued in dollar. By adding further it stated, the rupee, which is sitting 15% below its peak of late-February, will make sure that inflation remains in the 7-8% range for an additional 6-months.

The agency cautioned that the RBI should not be ‘too aggressive’, when inflation remains a problem. However, with economic growth slowing, the RBI should accept the higher inflation and go for a marginal rate-cut.

India VIX, a gauge for market’s short term expectation of volatility lost 0.66% at 25.54 from its previous close of 25.71 on Thursday. (Provisional)

The S&P CNX Nifty gained 82.95 points or 1.64% to settle at 5,137.70. The index touched high and low of 5,146.20 and 5,069.15 respectively. 46 stocks advanced against 4 declining ones on the index. (Provisional)

The top gainers on the Nifty were Grasim up 6.00%, Tata Motors up 5.69%, Ambuja Cement up 4.01%, Reliance Infrastructure up 3.83% and ACC up 3.11%.On the other hand, Sterlite Industries down 1.72%, Bajaj Auto down 1.37%, Sesa Goa down 1.36% and ONGC down 0.04% were the only losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 1.02%, Germany's DAX up 0.64% and Britain’s FTSE 100 up 0.71%.

Sentiments turned bullish in the Asian region and most of the Asian equity indices ended the day’s trade in the positive terrain on last trading day of the week amid hopes that the US Federal Reserve will embark on a fresh round of economic stimulus and Greece will return a pro-austerity government in weekend polls. Meanwhile, Hong Kong stocks jumped over two percent following a rally on Wall Street amid hopes for a fresh stimulus drive by the US Federal Reserve while, Nikkei closed flat, nudging 0.43 points up to 8,569.32, with market men unimpressed with the Bank of Japan’s decision to hold off any fresh stimulus moves for the time being.

However, Seoul shares dipped on Friday, underperforming Asian peers, dragged by selling by foreign investors, while a 2.90 percent decline in index heavyweight Samsung Electronics also added to the pressure.