Dalal Street cheers Obama’s victory; Sensex surpasses 18,900 mark

Prolonging their northward journey for sixth straight day, domestic bourses garnered over half a percent on Wednesday with benchmarks snapping the session above their crucial 5,750 (Nifty) and 18,900 (Sensex) levels following the US election results. However, the frontline indices came off the day’s high due to profit booking in the last leg of trade. Nevertheless, sentiments at D-Street remained upbeat after Barack Obama won a second term as the President of the United States after defeating Republican challenger Mitt Romney in a closely fought battle. Overcoming what appeared to be a cliff-hanger, Obama finally managed to emerge winner after a convincing victory in the crucial state of California.

Positive global cues too supported the domestic bourses as European stocks rallied in early deals on Wednesday as the re-election of US President Barack Obama fuelled expectation the Federal Reserve’s quantitative easing will continue while, most of the Asian equity indices too shut shop in the positive trajectory. However, China’s Shanghai Composite closed lower ahead of the once-in-a-decade top leadership change, while Hong Kong's market closed the shutter on positive note, snapping two days of losses.

Back home, sentiments got some boost as realty pack gained over two and a half percent on hopes for a pickup in demand tied to the Diwali festival season in mid-November, a time considered auspicious in the country. Buying in rate sensitive -- banking -- too soothed the sentiments on report that the Reserve Bank of India may go for easing monetary policy as early as January. Appreciation in money market too aided the sentiments as Indian rupee advanced further by 36 paise to 54.07 against the US currency on selling of dollars by banks and exporters after the greenback weakened against major world currencies.

Some amount of support also came in after interest rate sensitive auto stocks rose on expectation of rate cut from the central bank in the first quarter of 2013. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Rally of over half a percent in software pack too bolstered investors’ confidence as sector welcomed re-appointment of US president Obama by staging favorable trend, even as concerns over outsourcing issue lingered. The rally in equity markets was also backed by Jubilant FoodWorks’ better-than-expected second quarter result, registering over 36 percent gain in its net profit at Rs 32.35 crore for the quarter as compared to Rs 23.67 crore for the same quarter in the previous year. Reliance Capital, too reported over 12-fold jump in its consolidated net profit at Rs 401.00 crore for the quarter as compared to Rs 33.00 crore for the same quarter in the previous year.

The NSE’s 50-share broadly followed index Nifty rose by over thirty five points to end comfortably above its psychological 5,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained over eighty five points to finish above the psychological 18,900 mark. Moreover, broader markets outperformed the benchmarks and ended the session in the green with a gain of about a percent.

The overall volumes stood below Rs 1.80 lakh crore, which remained on the higher side as compared to that on Tuesday. The market breadth remained in favor of advances as there were 1,672 shares on the gaining side against 1,205 shares on the losing side while 131 shares remain unchanged.

Finally, the BSE Sensex gained 85.03 points or 0.45% to settle at 18,902.41, while the S&P CNX Nifty rose by 35.70 points or 0.62% to end at 5,760.10.

The BSE Sensex touched a high and a low of 18,973.43 and 18,786.14, respectively. The BSE Mid-cap index was up by 0.79% and Small-cap index was up by 0.73%.

HDFC up 1.92%, SBI up 1.91%, BHEL up 1.70%, Hindalco up 1.02% and ICICI Bank up 0.96% were the major gainers on the Sensex. On the flip side, Tata Power down 2.44%, Bharti Airtel down 0.88%, Coal India down 0.88%, Reliance down 0.58% and Cipla down 0.19% were the major losers on the index.

The top gainers on the BSE sectoral space were, Realty up 2.76%, Bankex up 1.07%, IT up 0.66%, Auto up 0.62% and TECk up 0.56%, while Oil & Gas down 0.31% were major losers on the BSE sectoral space.

Meanwhile, amid peaking interest and inflation rates, the industry body FICCI has projected a modest recovery in the growth of the manufacturing sector during the October-December quarter. It noted that key manufacturing segments such as automotive, capital goods, metals and chemicals are expected to register a nominal growth. With the sluggish performance in manufacturing sector and contraction in capital goods output, industrial growth had dipped to 2.7% in August.

It also noted that sectors like chemicals, textiles, auto and machine tools might grow in low pace with less than 5% rate and four sectors like FMCG, capital goods, cement and leather are likely to witness moderate growth with a growth rate between 5% and 10% in the third quarter of 2012-13. While the segments like tyre, ceramics and electronics are likely to witness strong growth of more than 10% during the period.

About 70% of the respondents out of responses from 364 manufacturing units polled that they are not likely to hire new workforce in next three months. Even though, the survey indicated that there were positive impacts in the overall business environment with the series of reform measures by the government to trigger growth, including widening FDI in retail, aviation and power exchanges.

The S&P CNX Nifty touched a high and a low of 5,777.30 and 5,711.40 respectively.

The top gainers on the Nifty were JP Associates up 5.52%, Bank of Baroda up 2.65%, PNB up 2.44%, IDFC up 2.43% and DLF up 2.42%.

The top losers on the index were Tata Power down 2.87%, Coal India down 0.97%, Reliance down 0.89%, Bharti Airtel down 0.79% and Siemens down 0.72%.

European markets were trading in green. France’s CAC 40 up 0.87%, Germany’s DAX up 0.69% and Britain’s FTSE 100 up by 0.60%.

Most Asian stock markets went home with the green mark as Barack Obama was re-elected as U.S. president, which is expected to add further monetary easing in the world’s largest economy. However, Japan's Nikkei ended little unchanged after bobbling between gains and losses. China's Shanghai Composite closed lower ahead of the once-in-a-decade top leadership change, while Hong Kong's market closed the shutter on positive note, snapping two days of losses. Moreover, Seoul markets gained marginally and Kospi ended higher, led by exporters.