Optimistic global set-up delights D-Street; Nifty re-conquers 5,700 level

After witnessing signs of consolidation in previous session, the key benchmark indices regained their vitality on Thursday by ending the session vivaciously over a percentage point, recapturing their crucial 5,700 (Nifty) and 18,750 (Sensex) levels. The markets, after a choppy morning session, remained in fine fettle throughout the day’s trade thanks to the broad gains of rate sensitives. Further, markets extended their bull run in last leg of trade as auto stocks and property developers rose on hopes for increased sales of big ticket items during the festival season, while lenders also gained on hope for increased retail loan demand.

Optimistic global set-up also helped traders to pile up positions in the Indian equities. Asian counters rallied as a slew of Chinese data pointed to stabilisation in the world’s second largest economy, and positive US housing data helped to ease worries about a sharp slowdown in global growth. China’s third-quarter gross domestic product grew 7.4 percent from a year earlier, the slowest pace since the first quarter of 2009 and marking the seventh straight quarter of slower growth, but matching expectations. Further, China’s industrial production, retail sales and fixed-asset investment accelerated in September, reducing the urgency for added stimulus. Meanwhile, European markets also traded mostly in the positive terrain in the early deals.

Leads from the domestic market too were buttressing as renewed buying was witnessed in rate sensitive sectors like banking and realty, which rose over two percent on hopes that central bank will respond with a 25 bps rate cut or a cash reserve ratio cut to complement the government's reform moves, the expectation that sector specific measures in the upcoming monetary policy review on October 30, gave a shot of adrenaline to the rate sensitive’s stocks.

Some amount of support also came from Metal space as stocks like Hindalco, JSW Steel, Sterlite Industries, Tata Steel, Sesa Goa and NMDC surged after the latest data showed growth rate in China’s industrial production and retail sales accelerated in September 2012. Moreover, buying in Auto shares too supported the sentiments. Stocks of Maruti Suzuki, Mahindra & Mahindra, Force Motors, Bajaj Auto and Hero MotoCorp went up on hopes that sales growth would pick in October ahead of the festive season. However, telecom stocks like Bharti Airtel and Idea Cellular declined after the Telecom Commission recommended that incumbent GSM operators to give up all spectrum in the 900 MHz band at the time of their licence renewals beginning 2014.

On the result front, Somany Ceramics rallied about 16 percent after registering a rise of 39.48 percent in its net profit at Rs 8.02 crore for the quarter ended September 30, 2012 as compared to Rs 5.75 crore for the same quarter in the previous year. Maharashtra Scooters too eked out modest gains on reporting 23 percent growth in Q2 net profit at Rs 42.99 crore for the quarter ended September 30, 2012 as compared to Rs 34.94 crore for the same quarter in the previous year. However, Cement producer ACC’s stock lost over half a percent after the company missing street estimates, posted 52 percent rise in its net profit at Rs 242 crore in the quarter ended September 2012.

The NSE’s 50-share broadly followed index Nifty gained by over fifty five points to regain its psychological 5,700 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by over one hundred and eighty points to finish near its psychological 18,800 mark. The broader markets also traded in-line with benchmarks and ended the session with a gain of about a percent. 

The overall volumes stood at over Rs 2.11 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth remained in favor of advances as there were 1,726 shares on the gaining side against 1,127 shares on the losing side while 145 shares remain unchanged.

Finally, the BSE Sensex gained 181.16 points or 0.97% to settle at 18791.93, while the S&P CNX Nifty rose by 58.45 points or 1.03% to end at 5,718.70.

The BSE Sensex touched a high and a low of 18,806.56 and 18,576.41, respectively. The BSE Mid-cap index was up by 1.16% and Small-cap index was up by 0.86%.

Tata Power up 3.13%, SBI up 2.80%, Tata Motors up 2.00%, Hero MotoCorp up 1.89% and TCS up 1.85% were the major gainers on the Sensex. On the flip side, Wipro down 1.97%, Sun Pharma down 1.73%, Bharti Airtel down 1.63%, Gail India down 0.57% and ONGC down 0.57% were the major losers on the index.

The top gainers on the BSE sectoral space were Realty up 2.58%, Bankex up 2.09%, Consumer Durables (CD) up 1.50%, Auto up 1.40% and Capital Goods (CG) up 1.31%, while Health Care (HC) down 0.30% was the only loser on the BSE sectoral space.

Meanwhile, India’s engineering exports slumped by 8.2% to $4.4 billion in September 2012. The US and Europe together account for over 60% of India’s total engineering exports and weak demand from these major markets are behind the slowdown.

During the same period of previous year, these exports stood at $4.8 billion. Engineering Export Promotion Council (EEPC) official said “the exporters are getting lesser number of orders due to weak demand in western markets like the US and Europe. This trend is likely to continue for at least next two months.”

In April-September 2012-13 period, engineering exports dipped 10% to $ 27.8 billion compared to the same period last year. India exports engineering items such as transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners.

The S&P CNX Nifty touched a high and a low of 5,722.50 and 5,650.55 respectively.

The top gainers on the Nifty were JP Associates up 4.73%, Axis Bank up 4.59%, Bank of Baroda up 4.00%, HCL Tech up 3.69% and Tata Power up 2.89%.

The top losers on the index were Wipro down 1.92%, Bharti Airtel down 1.89%, Sun Pharma down 1.78%, Grasim down 0.89% and Cairn down 0.75%.

European markets were trading in green. France’s CAC 40 down 0.22%, Germany’s DAX up 0.38% and Britain’s FTSE 100 up by 0.04%.

Asian markets went home with green mark, as the regional benchmark index touched highest close in a month, after China’s economic growth matched economists’ estimates and U.S. housing starts jumped. Meanwhile, China’s gross domestic product expanded 7.4% in the third quarter from a year earlier. Japan’s Nikkei ended with strong gains, after the economy minister yesterday called for stronger stimulus from the Bank of Japan, which convenes at the end of the month, while Hong Kong market closed with marginal gains.