Post session - Quick review

Playing catch-up with the overnight gains at Wall Street, Indian equity markets, after starting the New Year ‘2013’ on a promising note, rallied close to 20 months high to end comfortably past psychological 19500 (Sensex) and 5900 (Nifty)levels. Continued buying by funds and retail investors on the first trading session of CY ‘2013’, in hopes of a greater reward mainly activated the snoring bulls.

On the global front, Asian markets as well as European markets remained closed for trade today on account of the New Year. U.S. stocks closed out 2012 with their strongest day in more than a month, putting the S&P 500 up 13.4 percent for the year.

Nevertheless, animal spirit was revived at D-street after the Senate moved the US economy back from the edge of a 'fiscal cliff' on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives. In a rare New Year's session, senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.

Although across the board buying was witnessed across D- Street. Yet, stocks from Realty, Metal and Bankex counters, leading the BSE Sectoral front, mainly got the bulls going.  However, Information Technology stocks ended on a little softer note. All the rate sensitive counter’s - Auto, Realty and Bankex scooped up gains on optimism of Reserve Bank of India (RBI) easing monetary policy this month. Goldman Sachs has forecasted the repurchase rate, held at 8% since April, will be lowered to 7.5% at the next review on January 29, while BNP Paribas SA sees a 25 basis point reduction. Shares of metal companies too enticed traction after China's official manufacturing purchasing managers' index reported a steady growth in December at 50.6, matching November's seven-month high.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1859:1039 while 143 scrips remained unchanged. (Provisional)

The BSE Sensex gained 154.57 points or 0.80% and settled at 19581.28. The index touched a high and a low of 19623.76 and 19508.93 respectively. 28 stocks were seen advancing while 2 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 1.24% while Small-cap index was up by 1.02%. (Provisional)

On the BSE Sectoral front, Realty was up by 2.91%, Metal up by 2.20%, Bankex up by 1.53%, Capital Goods up by 1.09% and PSU up by 1.05% were the top gainers, while there were the no losers in the space.

The top gainers on the Sensex were Jindal Steel up by 3.46%, Hindalco Industries up by 2.72%, Tata Steel up by 2.52%, ICICI Bank up by 2.15% and Maruti Suzuki up 2.02%, while, NTPC down by 0.51% and Infosys down by 0.50% were the only losers in the index. (Provisional)

Meanwhile, India’s current account deficit (CAD) hits an all time high of 5.4% of gross domestic product or $22.3 billion in the July-September period of 2012, mainly on the back of declining exports. The CAD represents the difference between exports and imports after considering cash remittances and payment. CAD was $18.9 billion in the same period a year ago and $16.4 in the first quarter of 2012.

Merchandise exports recorded a negative growth of 12.2% during Q2 of 2012-13 as against an increase of 45.3% during corresponding quarter of 2011-12. Services exports again registered a lower growth of just 7.7% against a 10% growth recorded in the same quarter last year. On the other hand, imports registered slower pace of 4.8% growth during the quarter. As a result, sharp decline in exports than that in imports led to the widening of trade deficit to $48.3 billion during second quarter, from $44.5 billion a year ago.

While, addressing the balance of payment statement for second quarter, Reserve Bank of India (RBI) said that rise in import and moderating export growth raised net services receipts in second quarter, which led to the widening of the CAD. High current account deficit put adverse impact on rupee value and lowers foreign exchange reserves. India imports 75 percent of its crude oil requirement; high crude oil prices with rise in gold import had raised the CAD to 4.2 percent of GDP in the 2011-12.

However, government has taken various steps to check the import like levy more duties on gold import and channelize people's fund into equities and other financial instruments. With these efforts, foreign exchange reserves increased by $5.1 billion during the quarter, mainly reflecting depreciation of the US dollar against major international currencies.

India VIX, a gauge for markets short term expectation of volatility lost 8.42% at 13.69 from its previous close of 14.95 on Monday. (Provisional)

The S&P CNX Nifty gained 44.85 points or 0.76% to settle at 5,949.95. The index touched high and low of 5,963.90 and 5,935.20 respectively. 40 stocks advanced against 9 declining and 1 remain unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure was up 4.76%, Jindal Steel up 3.38%, Hindalco Industries up 2.72%, Punjab National Bank up 2.58% and Tata Steel was up 2.44%. On the other hand, Power Grid down 0.74%, NTPC down by 0.61%, Infosys down by 0.50%, Asian Paint down by 0.37% and Hero Moto Corp down by 0.24% were the top losers. (Provisional)

All the major Asian markets remained closed for trade today on account of the New Year while the European markets were too closed for the day on account of New Year.