Post session - Quick review

Indian equity markets put-forth mindboggling session of performance, as bourses showcasing triple digit gains, scaled new highs for 2012. Gush of positive news mainly encouraged investor’s go long on their risky bets as hopes that more policy reforms were in store mainly revived the so called animal spirit of Dalal Street, which were already hinging with optimism on newly announced reforms measure by the Finance Minister. In a move aimed at boosting investments in the securities market, Finance Minister P Chidambaram today besides extending the ambit of the Rajiv Gandhi Equity Scheme (RGES), which offers tax sops to first-time retail investors to mutual funds and exchange-traded funds, also slashed withholding tax on overseas borrowings to 5 per cent from 20 per cent.

However, the intra-day rally in Indian equities got a shot in the arm after the Samajwadi Party Chief Mulayam Singh Yadav laying to rest the fears of mid-term elections publicly said that his party will continue providing external support to the Manmohan Singh led UPA government. Showcasing that the rally of Indian equity markets had legs, 50 share index of NSE, Nifty, ended with gains of close to 2% for the week, while the 30 share index, Sensex, ended with profit of over 1.5%. Meanwhile, for the week CNX Midcap index accumulated massive gains of over 4%, while BSE Smallcap index went home with gains of over 2%. For the session, Nifty ended near its high of July 8, 2011, which was little below the 5700 mark-a level which acted nothing short of strong resistance. Similarly, Sensex, too puffing over 2% gains ended above the 18700 psychological level. However, broader indices for the session turned out to be underperformers, as both Midcap and Smallcap index lured gains of over 1.5%.

On the global front, having ended three of the last four sessions in the red, European shares clawed back up on Friday as investors brushed aside the latest news of Britain's and Italy's economic and debt problems. Markets brushed off a well-flagged report from the UK showing its plans to bring down its deficit have fallen behind target as the European debt crisis hit global growth. Meanwhile, Asian pacific shares ended sanguine as investors remained comforted by recent central bank steps to support the global economy in the face of weak data.

Closer home, although rally in Indian equity markets was broad-based, but stocks from Power, Capital Goods and Metal  and Bankex counters emerged as the prominent gainers on the BSE Sectoral front. On the flip side, Information Technology (IT) emerged as the only mood dampener on account of costlier rupee against the dollar, as these companies derive lion share of their revenue from dollar denominated currency. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1818:1094 while 122 scrips remained unchanged. (Provisional)

The BSE Sensex gained 395.85 points or 2.16% and settled at 18,745.10. The index touched a high and a low of 18,866.87 and 18,411.20 respectively. 26 stocks were seen advancing while 4 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 1.57% while Small-cap index was up 1.40%. (Provisional)

On the BSE Sectoral front, Power was up 4.46%, Bankex was up 4.10%, Capital Goods up by 4.03%, Metal was up 4.02% and PSU up 2.53% were the only gainers, while IT down 0.64%, Consumer Durables down by 0.15% and TECk down by 0.07% were the top losers in the space.

The top gainers on the Sensex were BHEL up 6.99%, Jindal Steel up 6.88%, Sterlite Industries up by 5.10%, Tata Power up 4.51% and SBI up 4.29% while, Dr. Reddy’s Lab down by 1.44%, TCS down by 1.30%, Infosys down by 0.84% and Sun Pharma down by 0.08% were the only losers in the index. (Provisional)

Meanwhile, in a move aimed at boosting investments in the securities market, Finance Minister P Chidambaram extended the ambit of Rajiv Gandhi Equity Scheme (RGES), which offers tax sops to first-time retail investors to mutual funds (MFs) and exchange-traded funds (ETFs).

Thus, to put across differently, the government’s RGES will be open to investments routed through MFs and ETFs besides direct investment by retail investors. However, the scheme, which will be notified in the next two weeks, would be applicable to investors who invest up to Rs 50,000 and have an annual income limit of Rs 10 lakh.

The move, which is aimed at encouraging people to invest in financial instruments rather than gold, comes at a time when the government is trying to cheer the markets ahead of a planned disinvestment in some of its public sector undertakings (PSU).

Further, investments made by retail investors in BSE100 and CNX100 stocks besides public sector undertakings (PSUs) such as the navaratnas will be eligible to derive benefits under the scheme. Further, Follow-on public offers (FPO) of these companies as well as initial public offerings of PSU’s with an annual turnover of more than Rs 4,000 crore will also be covered under the ambit.

Meanwhile, in a separate statement, the government easing norms to enable low-cost borrowings by Indian companies, cut withholding tax on overseas borrowings to 5 per cent from 20 per cent.

India VIX, a gauge for markets short term expectation of volatility gained 1.66% at 18.93 from its previous close of 18.62 on Thursday. (Provisional)

The S&P CNX Nifty gained 139.75 points or 2.52% to settle at 5,694.00. The index touched high and low of 5,720.00 and 5,575.45 respectively. 45 stocks advanced against 4 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure was up 9.86%, Axis Bank up 7.72%, SAIL up 7.62%, BHEL up 7.47% and Jindal Steel was up 7.34%. On the other hand, TCS down 1.15%, Dr. Reddy’s Lab down by 0.96%, Infosys down by 0.85% and Cipla down 0.11% were the only losers. (Provisional)

The European markets were trading on a mixed note with, France’s CAC 40 up 0.39%, Germany’s DAX up 0.20% and the United Kingdom’s FTSE 100 down 0.16%.

Snapping earlier day’s losses Asian stock markets rebounded and went home with green mark on Friday, tracking technology and oil companies’ gains and overshadowed worries about the uncertain global economy. The technology sector got a boost from the strong orders for Apple's iPhone 5, which went on sale in Asia. Japan's Nikkei ended up on Friday, reversing previous day’s sharp drop as investors relieved from steadiness in U.S. stocks, shrugging off fears over soft manufacturing data from China, Europe and the United States. Hong Kong shares closed in green, boosted by commodities-related sectors, as investors risk appetite increased after oil prices steadied at the end of a volatile week, while Malaysia's KLSE Composite index slipped 0.1%.