Markets surge to snap November series with decent gains

The tepid November series that remained range-bound throughout the month and was bound to get a flat expiry, unexpectedly showed a trend reversal in last two trading session to end with decent gains, both the benchmarks were up by over 2% for the series, while the mid and small cap indices too gained over two and one percent respectively. The gush of short covering was so high that the markets inched to their new high, with Nifty closing above 5,800 mark for the first time in 2012, its highest level while the BSE Sensex missed the 19,200 mark by a narrow margin. Total market turnover too reached to their lifetime high of 3.92 lakh crore.

The markets looked firm since beginning and gathered momentum as the trade proceeded, there was an enthusiasm as the impasse in the Parliament ended after the Speaker fixed the date for a debate and vote on the issue which will take place on December 4 and December 5. Not only this, traders took cues from the report of investment banker Goldman Sachs upgrading India to overweight from market-weight, saying that it expects the country's economic growth to be ‘relatively strong’ over the next year.  It said that, Indian economy is likely to grow by 6.5% in 2013 driven by favourable external demand outlook and domestic structural reforms push. On the economy front there was not much, Prime Minister's Economic Advisor Council Chairman Dr C Rangarajan said that the though government has pegged that the current account deficit during this fiscal will be at 3.5 per cent of the GDP, but it was much higher than the expected levels and there was need to bring it down at 'moderate levels'.

The global cues too remained supportive for the domestic markets, after the positive closing of the US markets, most of the Asian markets too remain relaxed on rising hope of US government reaching a budget deal, also the weakening economic conditions in Japan, led the anticipation of more stimulus. The European markets too made a strong start despite German unemployment climbing for an eighth straight month in November.

Back home, though the broader markets too remained active but the large cap stocks kept buzzing for the day and barring few, most of the components of the benchmark indices registered good gains taking the markets to new highs. Rate sensitives’ were in the most jubilant mood and Realty index on the BSE once again surged by over 3%, closely followed by banking and auto indices which garnered gain of over 2% each. The PSU sector too gained over a percent after the government reported that it has raised Rs 932 crore through disinvestment in PSUs during the current fiscal and is working towards achieving the Rs 30,000 crore target set for the year. There was some weakness in the IT and technology counter as the rupee appreciated against dollar and surged to its one week high.

On the F&O front, the market-wide rollover were around 67%, better than three months average of 61.89%, while sectorally, Capital Goods, Metals, Power, Telecom and Realty witnessed maximum rollovers of over 65%.

Finally, the BSE Sensex rallied 328.83 points or 1.75% to settle at 19,170.91, while the S&P CNX Nifty jumped by 97.55 points or 1.70% to end at 5,825.00.

The BSE Sensex touched a high and a low of 19,205.33 and 18,873.63, respectively. The BSE Mid-cap index was up by 1.26% and Small-cap index was up by 0.45%.

Bajaj Auto up 5.01%, ICICI Bank up 4.59%, Tata Motors up 4.45%, Cipla up 3.59% and Sterlite up by 3.09% were the major gainers on the Sensex, while Hero MotoCorp down 1.03%, Infosys down 0.98%, BHEL down 0.71% and Maruti Suzuki down 0.39% were major losers on the index.

The few gainers on the BSE sectoral space were Realty up 3.38%, Bankex up 2.76%, Auto up 2.08%, Capital Goods (CG) up 1.55% and Consumer Durables (CD) up 1.45%, while IT down 0.36% and TECk down 0.05% were top losers on the BSE sectoral space.

Meanwhile, only those coal mines, which have been explored, would be put up for auction, as per the government. However, of the 54 coal mines identified to be allocated through auction route, only 12 have been explored. Though, the government has not given any time frame for conducting auction of these blocks but Coal Minister Sriprakash Jaiswal had earlier said that auction of coal blocks would not be possible this year because of the long process involved in it. In related development, the Coal Ministry has sought the expertise of Finance Ministry with regard to the bidding documents for selection of mine developer and operator for certain Coal India mines.

Earlier, CAG had estimated that undue benefits to the tune of Rs 1.86 lakh crore might have accrued to private firms on account of allocation of 57 mines to them without auction, though this loss figure has been questioned by the government.

On state level, Jharkhand State Mineral Development Corporation (JSMDC) has requested the Prime Minister and the Union Coal Ministry not to cancel the coal blocks allotted to the state-run public sector company. Among the allocated eight mines, the state government had earlier decided to form a joint venture with private sector companies. Jharkhand had received allocation of 50 coal blocks during 2006 and 2011. The Ministry of Coal had earlier issued a warning to JSMDC that if the coal blocks were not developed immediately it would face cancellation. The Coal Ministry had also issued letters to 6 prominent private companies asking to develop the coal blocks allocated to them immediately.

The S&P CNX Nifty touched a high and a low of 5,833.50 and 5,736.10 respectively.

The top gainers on the Nifty were ICICI Bank up 4.92%, Asian Paints up 4.51%, Tata Motors up 4.46%, Bajaj Auto up 4.11% and Cipla up by 4.02%.

The top losers on the index were Infosys down 1.40%, Maruti Suzuki down 0.84%, Hero MotoCorp down 0.83%, BHEL down 0.76% and HCL Tech down 0.45%.

European markets were trading in green. France’s CAC 40 up 0.95%, Germany’s DAX up 0.72% and Britain’s FTSE 100 was up by 0.86%.

Asian markets ended broadly higher on Thursday after touching three weeks high on improvement in global sentiment after a senior U.S. lawmaker said he was optimistic on reaching a budget deal before the end of the year to avoid a fiscal crisis. Japan's Nikkei went home with strong gains, as exporters were benefitted by the ongoing weakness in the yen, which boosted the outlook for export earnings. Meanwhile, Hong Kong market closed higher with blue-chip exporters amongst the most notable gainers. However, Chinese shares ended lower for the fourth-consecutive day.