Post session - Quick review

Local equity markets witnessed yet another spectacular session of trade, building on to previous session’s gains, barometer gauges vehemently rallied over a percent. Showcasing confidence over the newly appointed Finance Minister’s assurance of doing whatever required for maintaining investment attractiveness of the country, investor’s parked their money into the risky asset class such as equities. Mirroring previous session’s trading pattern, benchmark equity indices touched an intra-day’s high level, only to retreat off it by the close of the trade. 30 share barometer index, Sensex and widely followed 50 share index, Nifty, rallied over a percent each to conclude above the 17600 and 5300 psychological level respectively. Broader indices, also accumulated gains but in lesser magnitude as compared to front line indices. Both Midcap and Smallcap indices ended up with gains of over half a percent.

On the global front, Asian pacific shares ended in fine contour as investor’s maintained hope that Europe will take further action to tackle its debt crisis, while the United States and China will adopt stimulus measures to boost growth. Though, much of the comfort was drawn with the opening of European markets, which hovered near a month’s high level at the prospect of the region edging toward a new plan to resolve its debt crisis and calming the headwind of global economic recovery.

Closer home, gains at Dalal Street were also triggered by the spurt of market bellwether Reliance Industries, that shot higher over half a percent after Oil Minister said the government may approve the company's new investment plan for the D6 block in the eastern offshore Krishna-Godavari basin. While, firmness of Infra stocks too spurred optimism at Dalal Street, Infrastructure stocks like IVRCL, IRB Infra and Jaiprakash Associates, all rallied on reports stating Union cabinet plans of introducing the final version of the much awaited Land Acquisition, Rehabilitation and Resettlement Bill in the monsoon session of Parliament.  Meanwhile, Telecom stocks exhibited mixed trend after Government decided to approach the Supreme court to seek the extension of 2G auction deadline of August 31 to complete auction of 2G airwaves. MTNL, Tata Teleservices (Maharashtra) and Reliance Communications rose between 0.95% to 3.29%, while Idea Celluar and Bharti Airtel fell over 0.15% each. Stocks from rate sensitive Realty, Bankex and Auto counters were among the prominent gainers on the BSE sectoral chart, while stocks from Health Care and Oil & Gas counters emerged as only pockets of weakness. Hopes that RBI will be pressured for lowering interest rates after Finance Minister P. Chidambaram said high borrowing costs were burdening consumers, mainly pumped strength into rate senstives’. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1513:1294 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex gained 183.42 points or 1.05% and settled at 17,596.38. The index touched a high and a low of 17,641.55 and 17,417.92 respectively. 25 stocks advanced against 5 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.38%, while Small-cap index was up 0.42%. (Provisional)

On the BSE Sectoral front, IT up 1.91%, Realty up 1.69%, Auto up 1.68%, TECk up 1.54% and Bankex up 1.18% were the top gainers, while Health Care down 0.06%, Oil & Gas down 0.05% and Consumer Durable down 0.04% were the only losers in the space.

The top gainers on the Sensex were Tata Motors up 4.35%, GAIL India up 3.71%, TCS up 2.73%, ICICI Bank up 2.10% and Bajaj Auto up 1.96% while, Hero MotoCorp down 1.30%, Bharti Airtel down 0.89%, RIL down 0.43%, Sun Pharma down 0.31% and Dr. Reddy’s Lab down 0.04% were the only losers in the index. (Provisional)

Meanwhile, with an intention of cranking up slowing growth engine of Indian economy, newly appointed Finance Minister, P Chidambaram, categorizing fiscal consolidation as its top priority, appointed a new panel to advise the government on fiscal rectitude, besides assuring moderation of inflation in the medium term. However, the former Home Minister, P Chidambaram, in its first speech after being a Finance Minister on August 6, was quick to add that the burden of fiscal correction must be shared, fairly and equitably, by different classes of stakeholders. 

In an attempt to re-gain the confidence of all stakeholders, FM averred that wherever mandatory, the corrective measures will be taken in order to achieve in greater clarity in tax laws, stable tax regime, a non-adversarial tax administration and a fair mechanism for dispute resolution. Further, investor friendly Finance Minister also promised to create an environment suitable for lower interest rates, which could be done by curbing on supply-side inflation, held out hopes for the mutual fund and insurance sectors, and pledged for faster clearances of foreign investment proposals, sensing the long policy inaction on the much awaited diesel and urea prices hike.

Back on the fiscal consolidation track, the new panel, which will consist of Vijay Kelkar, Indira Rajaraman and Sanjiv Misra, all of which are the members of the last Finance Commission, would help the government in formulating the path of fiscal consolidation, a target which is hard to achieve annual target, given that this would be last full-fledged financial exercise before Lok Sabha elections a year later.

India VIX, a gauge for market’s short term expectation of volatility lost 0.06% at 16.21 from its previous close of 16.22 on Monday. (Provisional)

The S&P CNX Nifty gained 48.10 points or 0.91% to settle at 5,330.65. The index touched high and low of 5,350.10 and 5,281.65 respectively. 37 stocks advanced against 13 declining ones on the index. (Provisional)

The top gainers on the Nifty were Tata Motors up 4.15%, IDFC up 3.59%, DLF up 3.57%, Ambuja Cement up 3.49% and GAIL India up 2.86%. On the other hand, Cairn India down 1.42%, Hero MotoCorp down 1.33%, Power Grid of India down 1.20%, BPCL down 1.06% and Ranbaxy Laboratories down 0.89% were the top losers. (Provisional)

The European markets were trading on a mixed note, with France's CAC 40 up 0.12%, Germany's DAX up 0.06% and Britain’s FTSE 100 down 0.35%.

Most of the Asian markets extended their recent gains on the back of sustained hope that Europe will take further action to tackle its debt crisis and the United States and China will adopt stimulus measures to support recovery. However, opposition from German leaders for bond buying programmes capped the gains. Meanwhile, some important triggers for market this week will be China’s inflation reports and trade balance, among other Chinese data, due on Thursday and Friday.