Benchmarks off their intra-day’s low; Sensex enters into green territory

Barometer gauges trading off their intra-day’s low level, have trimmed substantial part of their losses, with Sensex taking a U-turn into the green territory thanks to rebound of Banking stocks, after reports suggested some consensus for banking bill, being developed in Parliament. However, the government’s resolve to push ahead with its pro-reform agenda has been evident since Tuesday, when it rejected BJP's demand to drop a 'contentious' provision from a bill to amend banking laws. Indian equity markets, shrugging off robust IIP numbers, dipped to their intra-day’s low level, after hopes of rate cut were dashed by higher CPI numbers. Given the higher costs of sugar and vegetables, annual rate of inflation, based on the consumer prices index (CPI) in India, accelerated at the fastest pace in three months to 9.90 percent in November, 2012.

Positive global developments too are aiding the sentiment at D-street. Hopes of a deal from U.S. budget talks and expectations for more stimulus from the Federal Reserve when it ends its two-day policy meeting later in the day, mainly are keeping the sentiment upbeat for Asian pacific shares. Meanwhile, European stock futures too were showing an uptick on Fed Optimism.

Closer home, 30 share index, Sensex, gaining over 0.15% is trading above 19400 psychological level, while 50 share index, Nifty, too seems to be at kissing distance of 5900 level. Additionally, broader indices too have picked up some additional momentum. Shares from Information Technology, Auto and Realty counters have emerged as the pillar of strength, while stocks from Capital Goods, Power and Public Sector Undertaking counters continue to languish at the bottom. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1330:1280, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 19404.00 up by 16.86 points or 0.09% after trading in a range of 19478.79 and 19351.84. There were 16 stocks advancing against 14 declines on the index.

The broader indices too gained pace; the BSE Mid cap and Small cap indices were trading higher by 0.32% and 0.19% respectively

The top gaining sectoral indices on the BSE were, IT up by 1.03%, Auto up by 1.01%, TECk up by 0.88%, Realty up by 0.68% and Consumer Durables up by 0.39%.

On the other hand, Capital Goods down by 0.29%, Power down by 0.25%, PSU down by 0.19%, Metal down by 0.14% and FMCG down by 0.08% were the top losers on the Sensex.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.35%, Hero MotoCorp up by 1.83%, Bajaj Auto up by 1.55%, Sun Pharma up by 1.40% and Infosys up by 0.91%. On the flip side, HDFC down by 1.78%, Hindustan Unilever was down by 1.51%,  Gail India down by 1.26%, Jindal Steel down by 1.24% and ONGC was down by 1.12% were the top losers on the Sensex.

Meanwhile, bringing the much-needed relief to a battered economy, India’s index of industrial production (IIP), a key measure of industrial output, expanded at its fastest pace in 16 months at 8.2% in October versus a contraction of 0.4% in September. This is the highest growth that the IIP has touched since June 2011, when the indicator came in at 9.5%. The cumulative growth for the period April-October 2012-13 over the corresponding period of the previous year stands at 1.2 per cent. However, September output growth was revised down to a contraction of 0.7 percent from a contraction of 0.4 percent.

The industrial output has mostly remained sluggish in the previous few months, with an exception being August, as growth in all three sectors viz. mining, manufacturing and electricity remained subdued.

After staging contraction in the previous month, the manufacturing sector, which constitutes about 75.53 percent of industrial production, rose by 9.6 percent from a year earlier. Mining sector, which constitutes about 14.6 percent of industrial production, witnessed contraction of 0.1 per cent as against growth of 5.5 per cent in September. Further, growth in electricity sector too rose to 5.5 percent versus a 3.9 percent in the previous month. The cumulative growth in the three sectors during April-September 2012-13 over the corresponding period of 2011-12 has been (-) 0.7%, 1.0% and 4.7% respectively.

Importantly, Capital goods output, a key investment indicator, snapping the declining trend, staged remarkable improvement of 7.5 percent in October, as against a massive contraction of 26.5 percent in October 2011. Consumer goods, too witnessed double digit expansion of 13.2% as against contraction of 0.3 per cent, driven by growth of Consumer durables and Consumer non-durables at 16.5% and 10.1% respectively.

However, many economists are attributing robust factory output growth in October to a weak statistical base from a year ago when it shrank 5 per cent, rather than an improvement in actual production. October of 2011 was a terrible time for the industry due to a contraction caused in the output primarily because Diwali fell in that month, which meant lesser number of working days. Most companies produced a lot for restocking in September for sales in the Diwali month. However, this time around Diwali fell around in November, with a lot of output actually being worked out in the month of October.

The S&P CNX Nifty is currently trading at 5,896.40, down by 2.40 points or 0.04% after trading in a range of 5,924.60-5,883.45. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were JP Associates up by 2.12%, M&M up by 1.91%, Hero Motocorp up by 1.61%, Reliance Infrastructure up by 1.35% and Sun Pharma up by 1.32%.

On the flip side, HDFC down by 1.94%, Hindustan Unilever down by 1.65%, Jindal Steel down by 1.46%, Ultratech Cement down by 1.43% and GAIL India down by 1.39% were the top losers on the index.

All the Asian markets trade in green, Hang Seng gained 0.68%, Jakarta Composite advanced 0.17%, KLSE Composite rose 0.30%, Straits Times surged 0.66%, Seoul Composite  gained 0.55%, Nikkei 225 climbed 0.59%, Taiwan Weighted surged 1.00% and Shanghai Composite too was trading in green with gains of 0.37%.