Post session - Quick review

Indian equity markets snapping a 4-day slide, made a bounce back of over 3 percent on Tuesday, as investors across Asia pinned hopes on renewed efforts by European officials to find a way to cut Greece’s debt. European Central Bank policymakers said on Monday that officials were working to increase the firepower of the region's rescue fund in their latest effort to staunch a crisis that U.S. President Barack Obama said was 'scaring the world'.  Back on street “Bargain Hunting” remained the name of the game as the bourses splendid gains came after sustained selling that saw the BSE benchmark losing over 1,000 points over the last four trading sessions.  However, the momentum also got fortified with the sparkling performance of the rate sensitive’s which stood tall in trade as traders took positions on hopes that rate hike cycle may be nearing an end in coming months. Meanwhile, the shares of IT companies continued to move higher following recent correction in rupee against the dollar. However, the partially convertible rupee was at 49.15/16 per dollar against previous close of 49.44/45 on the back of dollar inflows in capital markets.

Surge on the global front mainly buttressed the gains at Dalal Street. Overnight, US stocks jumped and blue chips staged their biggest percentage gain in more than a month as investors bet that efforts will be taken to stem Europe's sovereign-debt crisis. Stocks closed near session highs following reports that a 'special purpose vehicle' to help stem Europe's debt contagion was in advanced development. Those reports followed a European Central Bank official's endorsement of a more aggressive bailout plan, and another official's remark that the ECB can't rule out an interest-rate cut. Meanwhile, Asian stocks rebounded from a 16-month low, sending the benchmark regional index to their biggest advance since April 2009. The stock index futures pointed to a higher open on Wall Street on Tuesday. Further, the momentum of perky benchmark indices also got accelerated with the positive opening of the European market. European shares climbed to their highest in nearly a week on Tuesday on euro zone debt plan hopes.

On the home turf, local barometer indices since the dawn of the trade captured exceptional gains as fresh spell of buying by funds and retail investors in recently beaten-down stock led to the splendid rally. In addition, covering-up of short positions ahead of monthly expiry in the derivatives segment on Thursday also helped stocks to move higher. The trade at Dalal Street just went from good to marvelous as the benchmarks adding massive gains to their kitty, ended near their day’s high point. The 30 scrip sensitive index-Sensex- capturing gains of over 400 points settled above 16500 mark. Meanwhile, the broadly followed 50 share index-Nifty-too registering over triple digit gains ended at a kissing distance of 5000 mark. The broader indices too displayed bouts of strength and went home with gains of over 1.50%.The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1803:1011 while 119 scrips remained unchanged.

The BSE Sensex gained 472.80 points or 2.95% and settled at 16,523.90. The index touched a high and a low of 16,551.65 and 16,282.74 respectively. 28 stocks advanced against 2 declining ones on the index (Provisional)

The BSE Mid-cap index gained 1.67% while Small-cap index was up by 1.29%. (Provisional)

On the BSE Sectoral front, Realty up 4.63%, IT up 3.76%, Oil & Gas up 3.48%, TECk up 3.16% and Bankex up 2.86% were the top gainers while, there were no losers.(Provisional)

The top gainers on the Sensex were DLF up 8.23%, Tata Motors up 6.46%, JP Associates up 5.93%, RIL up 5.23% and Tata Power up 4.27%.(Provisional)

On the flip side, Cipla down 0.54% and Sun Pharma down 0.26% were the only loser on the index. (Provisional)

Meanwhile, to fill the regulatory gap in the real estate sector, the government is drafting a comprehensive bill, which will improve governance and transparency in the real estate sector. The number of reality scam, judgements by the CCI and controversies on land acquisition for projects across the country has raised concerns over the governance and transparency. Minister for Housing and Urban Poverty Alleviation, Kumari Selja said ‘the legislation would emphasize self-disclosure, transparency, fair play and dispute resolution.’

The ministry was aiming to get cabinet approval before the winter session of Parliament.  Kumari Selja said, ‘there is an immense need to improve the regulatory environment, governance and transparency in the sector. The central legislation envisages a regulator at the central level and in states. Besides, there will be an appellate body. Protection of the interest of consumers will be of prime importance.’ However, the minister accepted that there is a need to improve regulatory and approval procedures. She said a task force headed by the ministry’s secretary was looking at the issues. ‘The task force will seek suggestions from states and members of the realty industry, the minister added.

Many established companies like Housing Development Finance Corporation and Tata Housing have made strong argument for the regulator in the sector, for transparency and a level playing field to safeguard the interests of consumers. The reality sector’s image had suffered because of the recent housing loan scams. Selja said ‘the players in the sector need to come together and take action for overhauling the image of the sector.’ On the issue of land acquisition challenges, she said the recent unfortunate events in some states had put the sector in a bad light.  

‘Land acquisition challenges need to be overcome for the growth of the real estate sector. I am sure the new central land acquisition Bill presented in Parliament would be passed after taking all the concerns on board. The thrust on making the land owner a partner in urbanization and adequately compensating all the persons dependent on land being acquired would give a humane face to the acquisition and would make development more inclusive, hassle-free and sustainable,’ Selja said.

On the issue of low-cost housing, the minister advocated a certain percentage of land in all housing developments need to be reserved for poorer sections. ‘We are working with the states to see that the reservation does not affect the bottom line of the sector,’ she said. On the impact of RBI’s continuous interest rate hike on the sector, the minister said she had already taken up the issue with the Prime Minister and the Finance Minister.  

India VIX, a gauge for market’s short term expectation of volatility lost 9.65% at 32.01 from its previous close of 35.43 on Monday. (Provisional)

The S&P CNX Nifty gained 142.35 points or 2.94% to settle at 4,977.75. The index touched high and low of 4,982.95 and 4,905.15 respectively. 48 stocks advanced against 2 declining ones on the index. (Provisional)

The top gainer on the Nifty were, DLF up 7.82%, Tata Motors up 6.64%, JP Associates up 5.99%, RIL up 5.20% and Tata Power up 4.75%.

On the other hand, Cipla down 0.47% and BPCL down 0.11% were the top losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 3.47%, Germany's DAX up 3.53% and FTSE 100 up 2.40%.

After witnessing bloodbath in previous session, all the Asian counterparts bounced back and ended the terrific day of trade with a decent gain after a pledge by European officials to resolve the region’s debt problems helped soothe market sentiment. Investor’s sentiment improved after European ministers told a meeting of global finance leaders in Washington over the weekend that they would take bolder and more decisive steps to pull Greece back from the brink of bankruptcy.The country has only enough money to last until mid-October. Moreover, financial stocks were buoyed by hopes that a plan was in the works to prevent Greece from defaulting on its debts - an event that might crush banks with significant holdings of the country’s bonds and cause domino-style defaults in other indebted countries such as Italy.