Indian bourses extend gains for ninth day in a row; Nifty surpasses 5,600 mark

Garnering over four percent last week, key domestic benchmarks prolonged their gains for the ninth day in a row on Monday following the FDI approvals in aviation, retail, power and broadcasting carriage services sectors post-market hours on Friday. The sentiments remained jubilant throughout the day’s trade but, the bourses trimmed their gains quite drastically in noon trade despite the Reserve Bank of India (RBI) slashing cash reserve ratio by 25 basis points to 4.5%, as market seemed to be expecting more than what the RBI delivered today. Moreover, the RBI left repo and reverse repo rates unchanged while the CRR cut will release Rs 17,000 crore in liquidity. The central bank has been persistently saying that the inflation remains a challenge. Inflation increased to 7.55% in August as against 6.87% in July. Even though, markets were able to hold their gains till end and snapped the session at their highest close since July 2011 as several bankers hinted at reducing lending rates in the coming days, which was largely seen positive for the equity markets. Moreover, rate sensitive realty, capital goods and banking remained the major gainers after the RBI cut the CRR, or the amount of deposits that lenders must keep with the central bank.

Sentiments also got boost from aviation stocks like Kingfisher Airlines, Jet Airways and SpiceJet, which also shot up after the government allowed 49% FDI in the sector. Retail stocks too aided the sentiments and stocks like Pantaloon Retail, Shoppers Stop, Trent and CESC rallied after the government approved 51% FDI in multi-brand retail sector. Meanwhile, Dish TV, WWIL, Den Networks and Hathway Cable climbed higher after receiving 74% FDI approval in broadcast carriage services.

Some amount of support also came in from metal stocks like Jindal Steel & Power, Sesa Goa, Sterlite Industries and SAIL surged after LMEX, a gauge of six metals traded on the London Metal Exchange, jumped 4.31% on September 14, 2012. However, gains remain capped after shares of FMCG companies like ITC, Hindustan Unilever, Tata Global Beverages, Colgate, Dabur India and Nestle India fell as investors’ risk appetite improved after the government announced big-ticket reforms last week.

Global cues remained sluggish as European markets traded lower as investors took a breather following a sharp two-week rally and key indices like CAC, FTSE and DAX hit a strong resistance level. Moreover, Asian equity indices end mixed, though Shanghai ended lower as Citigroup Inc. trimmed its 2013 growth outlook for China, while Hong Kong shares closed flat as developers' shares were mixed after the Chinese territory's de facto central bank ordered banks to curb home loans to borrowers with more than one mortgage to prevent the city being flooded with hot money after the United States announced an aggressive new stimulus plan to spur growth.

Back home, the NSE’s 50-share broadly followed index Nifty, rose by over thirty points to end over the psychological 5,600 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex moved up by about eighty points to finish above the psychological 18,500 mark. Moreover, the broader markets outperformed benchmarks and ended the session with a gain of over a percent. Meanwhile, the market breadth remained in favor of declines as there were 1,631 shares on the gaining side against 1,258 shares on the losing side while 118 shares remain unchanged.

The BSE Sensex gained 78.04 points or 0.42% to settle at 18,542.31, while the S&P CNX Nifty rose by 32.35 points or 0.58% to close at 5,610.00.

The BSE Sensex touched a high and a low of 18,715.03 and 18,480.54 respectively. However, the BSE Mid cap index was up by 1.14% and Small cap index up by 1.13%.

Jindal Steel up by 5.99%, ICICI Bank up by 5.39%, SBI up by 5.36%, L&T up by 4.35% and BHEL up by 4.30% were top gainers on the Sensex, while ITC down 5.48%, TCS down 5.03%, Dr Reddys Lab down 4.30%, Hindustan Unilever down 2.76% and Infosys down 2.67% were top losers on the index.

The major gainers on the BSE sectoral space were, Realty up 6.21%, Capital Goods (CG) up 3.74%, Bankex up 3.24%, Power up 2.19% and Oil & Gas up 1.95%, while FMCG down 3.66%, IT down 3.18%, TECk down 1.86% and Health Care (HC) down 1.81% were top losers on the BSE sectoral space.  

Meanwhile, after proposing de-allocation of about seven coal mines amid much contended Coalgate issue, the Inter Ministerial Group (IMG) on coal blocks is likely to meet on September 17, to decide the fate of six more mines that were issued notices for delaying production. The panel of ministers had suggested cancelation of four coal blocks allocated to private firms and also the encashment of bank guarantee (BG) of three others on the ground of non-development of mines within the prescribed time.

The panel is currently in the process of reviewing 29 mines allotted to private firms out of the total 58 which are under show-cause notices charged for delaying in development of mines. The Comptroller and Auditor General (CAG) report that revealed an estimated loss of Rs 1.86 lakh crore by allotting 57 mines to private firms without auction had raised woes across the country.

IMG has been scrutinizing progress of coal blocks with the view to take deliberate actions in the individual cases and decided to include purchase of GR, Approval of Mining Plan, Grant of Environment Clearance, status of Forest Clearance and progress made in land acquisition to constitute a basic requirement for evaluating progress.

The S&P CNX Nifty touched a high and low of 5,652.20 and 5,585.15 respectively.

The top gainers on the Nifty were Reliance Infra up by 8.34%, IDFC up by 6.87%, DLF up by 6.76%, Bank of Baroda up by 6.65% and JP Associates up by 6.04%. On the flip side, ITC down by 5.57%, TCS down 5.37%, Dr Reddy down 4.03%, BPCL down 3.30% and Ranbaxy down by 2.95% were top losers.

The European markets were trading in red, France's CAC 40 down by 0.59%, Germany's DAX down by 0.20% and United Kingdom’s FTSE 100 down by 0.32%.

Asian markets ended mixed following strong rally after Federal Reserve’s stimulus measures to boost US economy. Shanghai ended lower as Citigroup Inc. trimmed its 2013 growth outlook for China, while Hong Kong shares closed flat as developers' shares were mixed after the Chinese territory's de facto central bank has ordered banks to curb home loans to borrowers with more than one mortgage to prevent the city being flooded with hot money after the United States announced an aggressive new stimulus plan to spur growth. Situation between China and Japan over a group of disputed islands also battered companies with Japan links

The Japanese market was closed today on account of a public holiday on ‘Respect for the Aged Day’, while the Malaysian market remained closed on account of Malaysia Day public holiday.