Benchmarks end last session of 2012 on quiet note; garner gains of over 25% in CY’12

Indian benchmark equity indices concluded the last trading session of calendar year 2012 on a disappointing note but garnered massive gains of over 25 per cent on annual basis. Today, frontline indices ended the lackluster session on a quiet note tad below their neutral lines in absence of buying interest as US lawmakers failed to reach a deal to avert a fiscal crisis. However, the psychological 19,400 (Sensex) and 5,900 (Nifty) levels proved as strong support levels as the key indices despite repeated attempts refused to go substantially below those levels as rate sensitive like realty, banking and auto stocks surged after RBI indicated that in view of the likelihood of inflation moderating further, it could go in for a rate cut in its third quarter policy review on January 2013.

Global cues remained sluggish as European markets opened lower as worries over US budget negotiations dominated the trading mood after policy makers failed to reach an agreement over the weekend. While, Asian counters end mixed with Indonesia, Japan, South Korea and Taiwan markets remaining closed on account of year-end holidays. However, Chinese benchmark edged higher in the trade, helped by strength in Chinese insurers and brokerages after mainland regulators said they plan to let them develop and manage mutual funds.

Back home, macro-economic data also prompted some profit-booking at D-street. India’s fiscal deficit during the April-November period was 4.13 trillion rupees, or 80.4 percent of the budgeted full fiscal year 2012/13 target. However, during the same period in the previous fiscal year, the deficit was 85.6 percent of the budget target. Some selling also came in after IT stocks like HCL Tech, TCS and Mphasis ended mostly lower amid concerns about upcoming US fiscal cliff. Moreover, FMCG counter too ended in the red despite the Ministry of Agriculture reporting that the sowing of Rabi or winter crop has picked up. As per the latest reports, sowing of coarse cereals and oilseed crops is on higher side.

However, the losses remain capped as Metal stocks edged higher on upbeat Chinese manufacturing data from HSBC. China is the world’s largest consumer of copper and aluminum. Some jubilation also came in from retail space as stocks like Shoppers Stop, Pantaloon Retail and Trent edged higher as the government is likely to clear IKEA’s proposal to open cafeterias at its proposed mega retail outlet in a FIPB meeting, making rules a bit more liberal for single brand retailers. Some amount of support also came in from Oil and Gas shares which surged on report that natural gas producers like Reliance Industries (RIL) should be allowed to charge market prices, the Plan for next five years adopted by the nation’s highest planning body, headed by the Prime Minister.

The NSE’s 50-share broadly followed index Nifty declined by just three points to finish tad above its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by about twenty points but, managed to hold its crucial 19,350 mark. However, broader markets outperformed benchmarks and traded with traction throughout the session. The market breadth remained in favor of advances as there were 1,592 shares on the gaining side against 1,293 shares on the losing side while 128 shares remain unchanged.

Finally, the BSE Sensex ended lower by 18.13 points or 0.09% to settle at 19,426.71, while the S&P CNX Nifty declined by 3.25 points or 0.06% to end at 5,905.10.

The BSE Sensex touched a high and a low of 19,491.58 and 19,406.17, respectively. The BSE Mid-cap index was up by 0.28% and Small-cap index ended higher by 0.51%.

The top gainers on the Sensex were, Tata Power up by 1.38%, Gail India up by 0.98%, Wipro up by 0.96%, Hindalco up by 0.89% and Tata Motors up by 0.89%, while, ITC down by 0.88%, Maruti Suzuki down by 0.88%, L&T down by 0.76%, Cipla down by 0.55% and HDFC down by 0.53% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up by 1%, Consumer Durables up by 0.80%, PSU up by 0.59%, Power up by 0.47% and Auto was up by 0.42%, while Capital Goods down by 0.33%, FMCG down by 0.27%, IT down by 0.05% and TECk down by 0.05% were the losers.

Meanwhile, corporate affairs minister Sachin Pilot, concerned with growing number of financial frauds has announced the setting up of a new intelligence unit that will delve into data mining from all possible sources to detect any wrongdoings by the companies and their promoters at the earliest possible stage.

The work of Serious Fraud Investigation Office (SFIO) will be supplemented by the new division which is primarily aimed to spot early warnings by analyzing the vast amount of electronic data available with the ministry. “The idea is to have a set of people to do the data mining, collection and checking of records that is available on various platforms, and link them with the inputs from investigating agencies”, Pilot said.

Further, Pilot said that SFIO should be brought into picture only when there is a larger public interest involved or when something is going to have far reaching implications. The new Companies Bill contains special provisions for fraud and grants statutory status to SFIO, which is expected to curb wrongdoings in the corporate world.

Moreover, experts also agree that investigations into a number of corporate frauds, including the high-profile Satyam scam, in the past have shown that many of them could have been detected at an earlier stage by a stronger oversight mechanism. 

The S&P CNX Nifty touched a high and a low of 5,919.00 and 5,897.15 respectively.

The top gainers on the Nifty were PNB up by 3.35%, DLF up by 2.18%, ACC up by 1.60%, GAIL up by 1.20% and PowerGrid up by 1.19%.

The top losers of the index were HCL Tech down by 1.37%, ITC down by 1.11%, TCS down by 1.08%, IDFC down by 0.98% and L&T down by 0.93%.

Most of the European markets were not trading today, while others were showing some sign of recovery after a soft start. France’s CAC 40 was up by 0.29% and the United Kingdom’s FTSE 100 down by 0.48%.

Asian markets made a mixed closing of the final day of year 2012, though all the indices were not trading and some had a short trading session on the New Year eve, but there was cautiousness across the globe regarding the US fiscal cliff and they even overlooked encouraging Chinese manufacturing data. The HSBC manufacturing purchasing managers' index rose to 51.5 in December from 50.5 in November. Total new orders increased at the quickest pace since January 2011 despite a fall in new export orders.

The financial markets in South Korea, Japan, Taiwan and Indonesia were closed for public holidays, while Hong Kong traded for half day.