Elation at Indian markets extend to third straight day

Indian markets showed no sign of giving up on Friday and extended their relentless bull run for the third straight day. Starting again with a minor gap-up, markets traded strength-to-strength to reach their new high for the year. While, in last session blue-chips hogged the limelight, this time the broader indices too traded with good traction. The markets slightly faltered after the release of the GDP data but soon recovered after the Finance Minister P Chidambaram clarified that it was mainly due to scanty rainfall and poor showing by the manufacturing sector. The GDP numbers slowed down to 5.3 percent in the July-September quarter versus 5.5 percent in last quarter and 6.7 percent in same quarter last year. The numbers despite being lower were in-line to the street expectation and traders are of the opinion that the growth is bottoming and will see an improvement from here.

The global cues were mostly positive as the US markets ended in green on some positive economic reports and on hopes that the government will reach a deal on fiscal cliff, while the Asian markets mostly ended in green as Japan’s cabinet approved a second economic stimulus package and the nations’ industrial production unexpectedly increased. The European markets too traded mostly in green on report that Spain may escape a bailout; however German retail sales slumped the most in almost four years in October.

Back home, the trade remained firm for the Indian markets on Friday and the new series was greeted with gain of about a percent. After the knee-jerk reaction of the dismal GDP numbers, markets once again resumed the gaining streak as weak GDP data raised hopes for some monetary easing at the next RBI meeting on December 18. Sentiments got boosted with the finance minister P Chidambaram’s statement that the government has proposed the setting up of a National Investment Board (NIB) to monitor and advise ministries on expediting projects entailing investments in excess of Rs 1,000 crore, as over 100 projects, each involving investment of Rs 1,000 crore or more, have been delayed for various reasons.

On street, the day remained for the broader markets that kept outperforming the benchmarks since beginning and snapped the session with decent gains. On sectoral front, metal outpaced it’s all other peers and gained over 2% on BSE. Power too remained in jubilant mood after the Power Minister demanded Rs 36,000 crore for meeting the 12th plan targets of providing  electricity to 5,74,000 rural households. PSU index too was in flavor along with rate sensitive banking. However, auto suffered some profit booking in last, while FMCG and realty too witnessed marginal cuts.

Finally, the BSE Sensex gained 168.99 points or 0.88% to settle at 19,339.90, while the S&P CNX Nifty rose by 54.85 points or 0.94% to end at 5,879.85.

The BSE Sensex touched a high and a low of 19,372.70 and 19,186.30, respectively. The BSE Mid-cap index was up by 1.10% and Small-cap index was up by 0.82%.

Jindal Steel up 5.39%, BHEL up 4.92%, ONGC up 4.44%, Sterlite Industries up 3.24% and Hindalco Industries up by 2.65% were the major gainers on the Sensex, while Hindustan Unilever down 1.72%, Tata Motors down 1.44%, Bajaj Auto down 1.13%, Maruti Suzuki down 0.93% and Coal India down 0.80% were major losers on the index.

The few gainers on the BSE sectoral space were Metal up 2.07%, Power up 1.77%, PSU up 1.70%, Bankex up 1.46% and Consumer Durables (CD) up 1.40%, while Auto down 0.32%, FMCG down 0.24% and Realty down 0.20% were top losers on the BSE sectoral space.

Meanwhile, the Oil Ministry has said that it will raise the cap on supply of subsidized cooking gas (LPG) to 9 cylinders per household in a year, if the Finance Ministry agrees to give an additional Rs 3,000 crore to oil companies in 2012-13. Oil Minister M Veerappa Moily met Finance Minister P Chidambaram and then held a long discussion with the head of three PSU fuel retailers for raising the cap of 6 subsidized cylinders per household in a year.

The government in September this year had decided to restrict the supply of subsidized LPG to 6 cylinders of 14.2-kg each to every household in a year. Any requirement beyond this had to be purchased at market rates which are more than double the subsidized price. Only 44% of the households in the country consume 6 cylinders in a year and the rest of them have to purchase between 3 and 6 cylinder at the non subsidized rate.  This has led to furious demands from all quarters to raise the cap on supply of subsidized cylinders; keeping in view the public demand the oil ministry has asked the government to provide Rs 3,000 crore to oil companies for increasing the cap of subsidized cylinders to 9. However the finance ministry is yet to buzz on providing additional subsidy.

Oil companies are already losing over Rs 400 crore per day on selling diesel and cooking fuels below cost and bearing the cost of supplying additional subsidized cylinders will be impossible said oil ministry. Even with 6-cylinder-per-household cap, oil PSUs face an unprecedented revenue loss of over Rs 56,000 crore on sale of diesel, subsidized LPG and kerosene after taking subsidy from government. 

The S&P CNX Nifty touched a high and a low of 5,885.25 and 5,827.85 respectively.

The top gainers on the Nifty were Ultratech Cement up 5.49%, Jindal Steel up 5.47%, BHEL up 5.33%, ONGC up 4.41% and IDFC up by 3.32%.

The top losers on the index were Ranbaxy down 1.73%, HUL down 1.66%, Tata Motors down 1.31%, Maruti down 1.24% and Bajaj Auto down 0.89%.

European markets were trading in green. France’s CAC 40 up 0.13%, Germany’s DAX up 0.32% and Britain’s FTSE 100 was up by 0.11%.

Asian markets mostly climbed to end the week driven by month- and year-end position-squaring. Shanghai markets ended higher and set for their first gain this week after declining to their lowest in nearly four years earlier in the week, while Hong Kong shares closed up after touching 19 months high. Meanwhile, Japan's Nikkei went home with gains registering its best month since February with a 5.8% gain.