Post session - Quick review

All-round buying ahead of the expiry of the futures and options (F&O) contract on coming Thursday coupled with persistent foreign capital inflows kept the trend upbeat at D-street for second consecutive session on Tuesday. Also playing catch-up with global peers, benchmark equity indices got a shot in their arm, after the Euro ministers, in the latest bid to keep the 17-nation euro intact, slashed the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback, which in turn bolstered the risk appetite of the nervy market-participants. Further, optimistic Prime Minister Manmohan Singh’s statement of “UPA having the numbers to break any logjam over the FDI issue” also spurted gains at D-street even as Parliament failed to transact any business for the fourth day in a row. Moreover, sentiments were buttressed by ratings agency Moody's report, which maintained India's rating outlook at ‘stable’. Citing the country's large, diverse economy and strong gross domestic product growth as supportive of the rating Moody's said on Tuesday the outlook on its Baa3 rating for India is stable.

Rally in the last hour of sanguine trade, took 30 share barometer index, Sensex, piercing through 18800 level and ending with gains of over massive 200 points. Similarly, widely followed index, Nifty, too adding close to century of points, concluded past 5700 psychological level. Meanwhile, broader indices too accumulated gains of over 3/ 4 percent.

On the global front, Asian pacific shares staged mix trend. However, stocks across Europe, with no surprises, were pointing sharply upward after policy makers finally reached a deal to save Greece from bankruptcy by unlocking another bailout tranche.

Back home, buying was broad-based, but Consumer Durable, Realty and Fast Moving Consumer Goods were the prominent gainers. In other sector -specific action, major paper stocks, namely, Ballarpur Industries, Tamil Nadu NewsPrint Papers, JK Papers and Andhra Pradesh Papers all ended in red on account of profit-booking. While, Retail Shares, viz, Pantaloon Retail India, Shopper’s Stop and REI Six Ten Retail, all rallied on hopes that the government will be able to garner support to clear the opening of the supermarket sector, after UPA ally DMK said it will vote in favour of the government on the contentious issue of foreign direct investment (FDI) in retail. Additionally, all telecom stocks, namely Idea Cellular, Bharti Airtel, Reliance Communications, Tata Teleservices, and MTNL, rang-loud after Reserve Bank of India (RBI) has relaxed overseas borrowing rule for only successful bidders in the recently concluded airwaves auction, making it easier for them to raise money to pay the government. Furthermore, Capital Goods gauge gained traction, after the Minister of Heavy Industry and Public Enterprises, Praful Patel pitched for incentivizing capital goods, particularly for exports.  Trade of over Rs 2.53 lac was done in terms of volume turnover (Provisional). The volume remained on the higher side, being the penultimate session of F&O expiry, with markets being shut on Wednesday for holiday.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1700:1180 while 137 scrips remained unchanged. (Provisional)

The BSE Sensex gained 294.97 points or 1.59% and settled at 18831.98. The index touched a high and a low of 18862.70 and 18616.55 respectively. 28 stocks advances against 2 stocks declines on the index (Provisional)

The BSE Mid-cap index was up by 1.13% while Small-cap index was up by 0.88%. (Provisional)

On the BSE Sectoral front, CD up 3.28%, Realty up by 3.21%, FMCG up by 2.19%, Bankex up 1.80% and Teck up by 1.64% were the gainers while there were no losers on the index. (Provisional)

The top gainers on the Sensex were Bharti Airtel up 4.33%, Sterlite Industries up by 3.20%, HDFC up 2.93%, HDFC Bank up 2.72 % and Hindalco Industries up 2.60%, while, Tata Power down by 0.29% and NTPC down by 0.22% were the top losers in the index. (Provisional)

Meanwhile, given the absence of a pickup in private investment activity despite an improvement in sentiments; low transmission of the reduction in the cash reserve ratio (CRR) since September 2012; expectations of back-ended cut in the Repo rate (reduction of 50 bps in Q4FY13); and moderating consumption demand, rating agency ICRA has lowered the estimate for India’s economic growth for FY13 to 5.4 per cent from 5.7 per cent earlier.

The local unit of global rating firm Moody's Investor Services, raising the spectra of a rating downgrade, is also expecting government to overrun the upwardly revised fiscal deficit target due to lower revenue growth and its inability to cut expenses. 'Fiscal deficit is expected to exceed the revised target of 5.3% of GDP, in light of substantial under-recoveries on various regulated fuels already incurred,' said ICRA in a report.  Further, 'limited flexibility to control various types of expenditure and the likelihood of both tax and non-tax revenue receipts falling short of the budgeted amount' could boost government borrowing, ICRA underscored, without saying whether it would have a bearing on sovereign rating.

On monetary credit policy front, the rating agency expects repo rate to be reduced by a further 50 bps in the remainder of the current fiscal year, the timing of which would be guided by growth-inflation dynamics. At present, ICRA expects the Central Bank to slash CRR by 25 bps in the December 2012 mid-quarter policy review to ensure credit flow to productive sectors. Moreover, notwithstanding the impact of a weaker Rupee on competitiveness, demand for Indian exports is expected to remain muted in H2FY13, thereby reflecting global economic conditions, the rating agency opined.

India VIX, a gauge for markets short term expectation of volatility lost 4.83% at 13.96 from its previous close of 14.67 on Monday. (Provisional)

The S&P CNX Nifty gained 91.55 points or 1.62% to settle at 5,727.45. The index touched high and low of 5,733.20 and 5,658.00 respectively. 47 stocks advanced against 3 declining ones on the index. (Provisional)

The top gainers on the Nifty were Bharti Airtel was up 4.75%, JP Associates up 4.38%, BPCL up 4.14%, Reliance Infra up 3.07% and HDFC was up 3.01%. On the other hand, Power Grid down 1.54%, NTPC down by 0.47% and Tata Power down by 0.05% were the only losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up by 0.51%, Germany’s DAX down by 0.71% and the United Kingdom’s FTSE 100 down by 0.54%.

Asian stocks ended mixed on Tuesday as impuissance in Chinese shares and concerns over U.S. fiscal cliff overshadowed the optimism over Greek aid deal. Meanwhile, investor sentiments strengthened with euro-zone finance minister’s deal to release the next tranche of bail-out funds to Greece. Japanese Nikkei rose for a fourth straight session, led by defensive shares. Chinese markets extended losses for a third straight session in the absence of fresh market trigger. Hong Kong's Hang Seng index ended down marginally, weighed down by weakness in mainland stocks.