Benchmarks snap first day of new F&O series on optimistic note

Bulls retaliated with vigor on first day of new month F&O series, after declining over a percent, thanks to encouraging Asian leads which provided the required fillip for benchmark indices to garner over half a percent gains as indices got an unexpected boost in dying moments of trade, yanking them from the lowest point in the session to the highest point in no time. The important psychological 5,880 (Nifty) and 19,350 (Sensex) levels proved as strong supports for the key gauges as the indices spurted in the dying hours of trade from those levels and re-conquered the 5,900 (Nifty) and 19,450 (Sensex) bastions in the end.

The rally in the Indian equity markets came in mainly on the back of rise in oil and gas space which rose about two and a half percent as stocks of public sector undertakings (PSU) oil marketing companies (OMCs) like BPCL, HPCL and IOC edged higher on reports that the government is looking at the option of increasing diesel and kerosene prices by Rs 10 per litre in phases. Sentiments also got some boost after Oil exploration firms like, Oil India, ONGC and Cairn India rose as US crude oil futures headed for biggest weekly gain since August 2012, as US lawmakers scheduled talks aimed at averting tax increases and spending cuts in United States.

The surprise upsurge in sentiments also came from rally in Asian markets as all the regional peers ended higher on hopes of quick resolution to US fiscal cliff as lawmakers initiated talks in Washington. Japanese market once again remained the major gainer on report that the country’s consumer prices fell fanned speculation that the central bank will respond to government calls for more asset purchases. However, European counters traded weak in the early deals.

Back home, markets mood also got some boost after Finance Minister P Chidambaram expressed optimism that the Indian economy will continue to grow at a healthy rate even as the global economies face recession. Software pack too supported the rally, surging by about a percent on hopes that the US lawmakers will try to reach a deal to break the budget impasse before the end of the year. Metal stocks too aided the sentiments as scrips like Hindalco, Sterlite Industries, NMDC and SAIL edged higher as LMEX, a gauge of six metals traded on the London Metal Exchange gained 1 percent on December 27, 2012. Auto space too made a positive close as stocks like Maruti Suzuki, Hero MotoCorp and Bajaj Auto surged ahead of unveiling December sales figures starting January 1, 2013.

The NSE’s 50-share broadly followed index Nifty rose by about forty points to end above its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over one hundred and thirty points to finish above the psychological 19,450 mark. Moreover, broader markets traded neck-to-neck with benchmarks and ended the session with a gain of about half a percent.

The overall volumes stood above Rs 1.10 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth remained in favor of advances as there were 1,509 shares on the gaining side against 1,376 shares on the losing side while 134 shares remain unchanged.

Finally, the BSE Sensex gained 121.04 points or 0.63% to settle at 19,444.84, while the S&P CNX Nifty rose by 38.25 points or 0.65% to end at 5,908.35.

The BSE Sensex touched a high and a low of 19,465.74 and 19,346.07, respectively. The BSE Mid-cap index was up by 0.79% and Small-cap index was up by 0.28%.

The top gainers on the Sensex were, Reliance up 2.73%, ONGC up 2.49%, Sterlite Industries up 2.28%, Infosys up 1.38% and Hero MotoCorp up 1.35%, while, Sun Pharma down by 1.05%, Mahindra & Mahindra down by 0.70%, Tata Steel down by 0.59%, SBI down by 0.46% and HDFC Bank down by 0.35% were the top losers on the index.

The top gainers on the BSE Sectoral space were Oil & Gas up 2.38%, IT up 1.21%, PSU up 0.89%, TECk up 0.87% and Consumer Durables up 0.75%, while Health Care (HC) down 0.19% and Bankex down 0.01% were the top losers on the sectoral space.

Meanwhile, receiving several complaints from various states, the Prime Minister Manmohan Singh has requested the Planning Commission to submit a report in three weeks on the fuel shortages faced by power plants. The ‘request’ comes amid acute fuel shortages that are affecting the country’s power generation, with already several projects running below their capacity. Further, PM has also directed all Chief Ministers to write to the Deputy Chairman of the Planning Commission giving details of plants, which are worst hit.

Fuel scarcity is a major issue plaguing the power sector which is expected to see generation capacity addition of about 88,000 MW in the 12th Plan (2012-17). There are also disparity between many power producers and Coal India, delaying the signing of fuel supply agreements (FSAs).

Fuel supply pacts are yet to be signed for generation capacity of about 8,000 MW that are ready to be commissioned. On December 17, the Prime Minister’s Office directed power companies to enter into Fuel supply pacts within a month, after November deadline for FSAs was missed, amid differences over various issues including coal quality.

The S&P CNX Nifty touched a high and a low of 5,915.75 and 5,879.50 respectively.

The top gainers on the Nifty were Reliance was up 3.22%, ONGC up 2.93%, BPCL up 2.46%, Wipro up 1.70% and Infosys up 1.54%.

The top losers on the index were Axis Bank down by 0.69%, SBI down by 0.65%, M&M down by 0.60%, HDFC Bank down by 0.57% and Sun Pharma down by 0.54%.

The European markets were trading in red, France’s CAC 40 down by 0.83%, Germany’s DAX down by 0.30% and the United Kingdom’s FTSE 100 down by 0.06%.

Asian equity markets extended earlier sessions gains and ended higher on Friday with Japan’s Nikkei touching a fresh yearly high for a second consecutive session on the back of persistent weakness in the yen. Shanghai Composite went home with strong gains as banking stock rallied on policymakers' supportive stance towards financial reforms. Investors were expecting some major cues from the US fiscal cliff talks this weekend. Kospi Composite closed higher but Korean automakers were weighed down by the lower yen which gives their Japanese rivals a competitive edge in exports.