Post session - Quick review

Indian equity markets after being battered for six consecutive sessions made a smart comeback on Wednesday. Giving thumbs up to the cheer in the global markets post the US Federal Reserve pledged to keep interest rates low for two more years, the benchmark indices entered the bull market territory in early deals and refused to budge from thereon. Infact encouraged by upsurge in the BSE Sensex in the opening trade, Finance Minister Pranab Mukherjee on Wednesday exuded confidence that markets will stabilise in the next few days. He also said the government and the Reserve Bank will work in close cooperation to bring stability besides ensuring adequate liquidity in the forex market.

The optimism at Wall Street was largely injected at Dalal Street, which took the key barometer gauges both on BSE and NSE higher above their physiological level. However, in the afternoon trades the indices came off from their intraday highs amid reports of fresh geo-political tensions fuming between South Korea and North Korea, but market men brushing aside the concerns focused on hunting undervalued but fundamentally strong stocks, thereby leading to the spurt of the bourses again. Moreover, also heartened the Indian equity markets was the green color of the European markets. On the global front, Asian markets tailing the trajectory of the US stocks which rose to a two high after the US Federal Reserve stepped in to stem a global equity route, ended substantially higher. Meanwhile, the European shares rose on Wednesday extending the previous day’s gains in a volatile session as investors bought oversold stocks in a relief rally.

Back in India, in a refreshing development, the IT index snapped a six-session losing streak on bargain hunting. The sector had been spiraling over the recent instability in the global markets, mainly US and Europe. Infosys soared by 2.6% at 2,440, TCS gained 2.5% and Wipro added 2.5%. Meanwhile, fertilizer stocks also stood tall amidst the reports that India is eyeing stake in Belaruskali - one of the world's largest producers of potash. The deal will help India to ensure long-term supply of fertilizers to cope with increasing demand. Moreover, clearance of a proposal to free urea prices by the Finance Minister Pranab Mukherjee late last week also aided the sentiment. Notable gainers amongst them included Rashtriya Chemicals and Fertilizers, Chambal Fertilizers, Nagarjuna Fertiliser and National Fertilizers which surged in a range of 2-5%. As per the draft policy, fertilizer companies will be able to raise the rate of key farm nutrients by 10% in the first year, and starting second year will have the complete freedom to fix the maximum retail price of urea based on market dynamics.

Meanwhile, Auto companies also put forth a commendable show despite the Car sales in India falling the most in the three years by 15.8 percent in July. According to data from the Society of Indian Automobile Manufacturers, the Indian automakers sold 133,747 cars in July, while the sale of trucks and buses, a key pointer to economic activity, rose 23.7 percent to 64,241 vehicles in July. Rising interest rates on loans and higher fuel costs crimped demand for new vehicles. However, some of the stocks drew comfort post the local association of auto makers said that it expects sales to rebound from August because of the introduction of new cars.

On the other hand, the FMCG counter remained the only pocket of weakness as it declined by 0.21% after heavyweights like HUL and Nestle plummeted by over a percent. Similarly, the downstream PSU oil companies like IOC, HPCL and BPCL also remained under tremendous selling pressure because of the spike in international crude oil prices. Brent crude rose $2 a barrel as the US central bank's announcement weighed on the dollar and helped reverse a steep slump in oil. The 30 scrip sensitive index on BSE-Sensex - commencing the trade at 17,244.71, shut shop above the 17100 level with gain of over 250 points. Meanwhile, the 50 share index on NSE-Nifty- gaining over 50 points ended over 5100 level. However, the broader indices doing well outperformed the larger counterparts and went home with gains of over 2%. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2071:806 while 108 scrips remained unchanged.

The BSE Sensex gain 255.44 points or 1.52% and settled at 17,113.35. The index touched a high and a low of 17,256.46 and 17,022.25 respectively. 23 stocks advanced against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gained 2.39% while Small-cap index was up by 2.39%. (Provisional)

On the BSE Sectoral front, Auto up 4.00%, Realty up 3.19%, IT up 2.61%, Consumer Durables up 2.50% and Bankex up 2.37% were the only gainers.

On the flip side, FMCG down 0.80% and Oil & Gas down 0.42% were the top losers.

The gainer on the Sensex was Maruti Suzuki up 6.31%, Tata Motors up 5.71%, Hindalco up 5.11%, M&M up 4.88% and DLF up 4.81%. (Provisional)

On the flip side, ONGC down 2.38%, ITC down 1.43%, HUL down 1.31%, Sun Pharma down 1.25% and Tata Power down 0.89% were the top loser on the index. (Provisional)

Meanwhile, the non-stop rate hike by the Reserve Bank of India has started showing its effect on the domestic passenger cars sales numbers, which during the month of July 2011 declined by 15.76% to 1, 33,747 units  as compared to 1, 58,767 units sold in July 2010. The overall growth in the passenger vehicle segment fell by 8.95% in July 2011. It fell to 13,48,753 units from  12,37,521 units in the July 2010.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM), the overall domestic sales for April-July 2011 grew by 13.55%. However, in the month of July 2011 it registered moderation in growth rate and grew by 8.99%. During the April to July 2011 period, Passenger Vehicles segment grew at 4.03% over same period last year. Passenger Cars grew by 1.12 %, Utility Vehicles grew by 7.84 % and Vans sales grew by 25.42 % in this period.

The Commercial Vehicle segment registered healthy growth in July. It increased by 23.70% to 64,241 units in July 2011 from 51,934 units in July 2010.  During April to July 2011, the overall commercial vehicle segment showed growth of 16.56% as compared to the same period of last year. Whereas in April to July 2011, within the Commercial Vehicle segment, Medium & Heavy Commercial Vehicles (M&HCVs) registered growth of 6.40%, Light Commercial Vehicles grew at 25.64%.

The Two Wheelers sales recorded a growth of 12.61% to 10, 59,906 units from 9, 38514 units, whereas Three Wheelers sales registered decline of 3.13% in July 2011. During the April to July 2011, the Two Wheelers registered a growth of 15.79 % and Three Wheelers sales recorded a growth rate of 2.50% for the period under consideration.

India VIX, a gauge for market’s short term expectation of volatility lost 17.00% at 28.95 from its previous close of 34.88 on Tuesday. (Provisional)

The S&P CNX Nifty gained 86.50 points or 1.71% to settle at 5,159.35. The index touched high and low of 5,197.95 and 5,123.35 respectively. 35 stocks advanced against 15 declining ones on the index. (Provisional)

The top gainers on the Nifty were Tata Motors up 6.04%, Maruti Suzuki up 5.78%, DLF up 5.41%, Hindalco up 5.10% and M&M up 4.82. (Provisional)

On the other hand, Grasim down 2.53%, ONGC down 2.14%, ITC down 1.68%, Cairn down 1.46% and Ranbaxy down 1.30% were the top losers. (Provisional)

The European markets are trading in green, with the France's CAC 40 up 0.42%, Germany's DAX up 1.90% and FTSE 100 up 0.60%.

After witnessing a deep cut in six straight sessions, Asian markets finally gets sigh of relief as pull back rally witnessed in all the Asian equity indices barring Straits Times on Wednesday after the US Federal Reserve pledged to keep interest rates near zero through the middle of 2013. Moreover traders were hoping that another round of fiscal stimulus could be on the way too aided the sentiments. But, the investors remained wary about the implication of the Fed’s move -- that it expects the US economy to remain weak far longer than previously forecast -- and this supported demand for safe havens such as gold and the Swiss franc. Meanwhile, South Korean index closed slightly higher in the trade as investors bought battered stocks after recent selloffs, but gains were limited by continued foreign selling however, Straits times that escaped the massacre in last session has witnessed some correction in the trade today.