Post session - Quick review

Bulls resumed trade, after a long weekend, on a vigorous note at Dalal Street, as building onto previous session’s gains; Indian equity markets put forth a spectacular rally.  Most of the gains were spurted across the street, in the last hour of trade, which drove the benchmark equity indices near the high point of the day. Stability in global equity markets, drove widely followed 50 share index of National Stock Exchange (NSE), Nifty, past 5400 level, its highest since March 16, whereas the 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, too ended above the 17800 level, with over 0.75% gains. However, broader indices, managed to amass gains, but in smaller proportion to frontline indices. Sustained buying by funds and retailers driven by the government’s bid to revive investments across-the-board amid better trend in Asia, mainly buoyed the sentiment at Dalal Street. In an effort to restart the engine of manufacturing Finance Minister P Chidambaram urged banks to slash interest rates and keep EMIs at affordable levels in order to encourage sale of consumer durables.

Much of the gains came to the bourses thanks to the up move of the IT major, Infosys, which surged over 2%, spurted optimism across entire space. Finding no basis to support any of the charges, US court in Alabama dismissed the harassment charges filed against Indian IT major Infosys, by one of its American employees, Jack Palmer. Meanwhile, spurt of India’s largest car maker, Maruti Suzuki, by over 0.50% on reopening its long shut Manesar plant, also cheered investors.

However, release of much awaited July month’s consumer prices index (CPI) data, emerged as non-event on Dalal Street, as although the annual rate of inflation, based on the consumer prices index (CPI) in India, eased marginally in the month of July to 9.86 percent, it’s first sub 10% figure for the first time after few months, on account of drop in petrol prices at the pump, but was higher than expected, given the higher base in the corresponding month previous year.

On the global front, Asian shares ended in fine fettle as investor’s held on to hopes the European Central Bank could trim borrowing costs, even as officials denied a report about the shape of its planned bond buying strategy. Meanwhile, European shares, rebounding after falls in the previous session, advanced in low volumes on Tuesday, as investors awaited a meeting on Greece's future and possible anti-crisis action European policymakers.

Closer home, the gains at Dalal Street, were triggered by stocks belonging to Information Technology, Technology and Power counters. Power stocks edged up on lower buying after previous session’s drubbing, prominent gainers were Tata Powers, Thermax and Reliance Power.  Power stocks, in the previous session, came under pressure on being named in the CAG report. Meanwhile, rate sensitive, including banking, Realty and Auto counters, also ended cheerful. However, on the flip side, defensive Health Care space emerged as the only spoil-sport, as the pivotal ended around its neutral line with negative bias. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1470:1368 while 151 scrips remained unchanged. (Provisional)

The BSE Sensex gained 184.36 points or 1.04% and settled at 17,875.44. The index touched a high and a low of 17,898.35 and 17,705.14 respectively. 23 stocks were seen advancing against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.20% while Small-cap index was up 0.46%. (Provisional)

On the BSE Sectoral front, IT up 1.78%, Power up 1.51%, TECk up 1.29%, Auto up 1.24% and Metal up 1.20% were the top gainers, while Health Care down 0.14% was the sole loser in the space.

The top gainers on the Sensex were Sterlite Industries up 4.73%, NTPC up 3.21%, Tata Power up 2.62%, Gail India up 2.54% and M&M up 2.40% while, Bharti Airtel down 1.76%, Hindalco Industries down 1.18%, Tata Steel down 0.73%, Dr. Reddy’s Lab down 0.66% and Hero MotoCorp down 0.37% were the top losers in the index. (Provisional)

Meanwhile, thanks to the drop in petrol prices at the pump, annual rate of inflation, based on the consumer prices index (CPI) in India, eased marginally in the month of July to 9.86 percent, however drought in parts of the country, which drove food prices higher, limited the downside. According to the data released by Central Statistics Office, provisional annual inflation rate based on all India general CPI (Combined) for July 2012 on point to point basis stood at 9.86 percent as compared to 10.02 percent for the previous month of June 2012. However, June consumer price inflation was revised lower to 9.93 percent from 10.02 percent earlier.

According to the Ministry of Statistics and Programme Implementation, which released the monthly provisional CPI on Base 2010=100 along with annual inflation rates for July 2012, all India provisional General (all groups), CPI numbers of July 2012 for rural, urban and combined were at 122.6, 119.9 and 121.4 respectively. The corresponding inflation rates for rural and urban areas for July came in at 9.76 percent  and 10.10 percent respectively as against June’s  9.65 percent  and 10.44 percent, respectively, which indicated that the rate of price rise rose in rural areas while that in the urban areas eased slightly.

In the backdrop of drought like situation, food inflation in the CPI accelerated to 11.53 percent in July from 10.71 percent in June. India has the highest retail inflation among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa -- and is way above the Reserve Bank of India (RBI)’s comfort level. However, unlike most central banks, the RBI uses wholesale inflation in its policy formulation, as annual consumer price inflation data was only launched this year in January. Aided by lower increases in fuel prices, India’s wholesale price index (WPI) dropped to three year low of 6.87 percent in June, its slowest rate since January.

India VIX, a gauge for markets short term expectation of volatility gained 3.62% at 16.30 from its previous close of 15.73 on Friday. (Provisional)

The S&P CNX Nifty gained 54.60 points or 1.02% to settle at 5,420.90. The index touched high and low of 5,425.15 and 5,368.70 respectively. 37 stocks advanced against 13 declining ones on the index. (Provisional)

The top gainers on the Nifty were Sterlite Industries up 4.82%, DLF up 3.83%, Sesa Goa up 3.71%, NTPC up 3.36% and Ambuja Cement up 3.36%. On the other hand, Bharti Airtel down 1.54%, Cairn India down 1.17%, PNB down 1.01%, Hindalco Industries down 0.79% and Tata Steel down 0.71% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.62%, Germany's DAX up 0.45% and Britain’s FTSE 100 up 0.34%.

Asian Markets ended mixed amid lack of strong cues from Wall Street overnight and a general sense of lack of direction in the markets. Investors traded cautiously on renewed worries over the euro zone debt crisis after Germany and the European Central Bank dampened hopes for action to drive down borrowing costs. In China, the Shanghai Composite Index jumped over 0.54%, by reports that Chongqing, a huge metropolis in southwestern China, plans to spend $236 billion to upgrade its manufacturing sector, while Tokyo's Nikkei index gave up previous day's rally, as the dollar held on to recent gains against the yen, underlining a continued shift away from the safe haven Japanese currency.

Jakarta and KLSE composite were closed for public holidays.