Benchmarks kick starts the year on optimistic note

Key domestic benchmarks put-up a fascinating show when most of the world markets were closed on the beginning of the New Year. Though volume-wise it wasn’t a great day, price-wise the Mid-cap and Small-cap stocks celebrated the first trading day of the year. The rally was mainly supported by interest rate sensitive sectors like banking and real estate, which remained on buyers’ radar on optimism of Reserve Bank of India (RBI) easing monetary policy this month.

The indices traded with decent gains till noon, but post noon the benchmarks turbo-drove and snapped the session above their crucial 5,950 (Nifty) and 19,550 (Sensex) mark 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. However, all the major Asian as well as European markets remain closed today on account of New Year.

Back home, rally in metal counter too supported the sentiments as stocks like Hindalco, Jindal Steel, Tata Steel, Sterlite Industries and Sesa Goa edged higher on upbeat Chinese manufacturing data from HSBC. Auto counters too traded with traction and garnered gains of about a percent after Mahindra & Mahindra registered decent gains in December sales. The company reported 6 per cent growth in domestic sales at 42,307 units in December 2012, compared with 39,891 units sold during the same month a year ago. Meanwhile, Goldman Sachs has forecasted the repurchase rate, held at 8 per cent since April, to be lowered to 7.5 per cent at the next monetary policy review on January 29, while BNP Paribas SA sees a 25 basis point reduction. Some strength also came in after Indian rupee stabilized further against the American currency in the late morning trade by surging 24 paise to 54.75 per dollar on persistent selling of dollar by banks and exporters on the back of sustained capital inflows despite firm dollar overseas.

Sentiments also got some support from report that Centre’s fiscal deficit though exceeding 80 per cent of the Budget target in the first eight months (April-November) remained slightly better than the numbers recorded during same period in 2011-12. However, gains remain capped up to certain extent as the eight core industries witnessed a slow growth of 1.8 per cent in November against the eight-month high of 6.5 per cent seen in the previous month, signaling a similar softness in the IIP data to be released later in the month.

The NSE’s 50-share broadly followed index Nifty rose by about forty five points to end above its psychological 5,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over one hundred and fifty points to finish above the psychological 19,550 mark. Moreover, broader markets traded neck-to-neck with benchmarks and ended the session with a gain of over a percent. The market breadth remained in favor of advances as there were 1,930 shares on the gaining side against 977 shares on the losing side while 134 shares remain unchanged.

Finally, the BSE Sensex gained 154.10 points or 0.79% to settle at 19,580.81, while the S&P CNX Nifty rose by 45.75 points or 0.77% to end at 5,950.85.

The BSE Sensex touched a high and a low of 19,623.76 and 19,508.93, respectively. The BSE Mid-cap index was up by 1.19% and Small-cap index ended higher by 0.99%.

The top gainers on the Sensex were, Jindal Steel up by 3.26%, Hindalco up by 2.72%, Tata Steel up by 2.33%, ICICI Bank up by 1.92% and BHEL up by 1.90%, while, NTPC down by 0.70%, Infosys down by 0.44% and Hero MotoCorp down by 0.01% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up by 2.74%, Metal up by 2.13%, Bankex up by 1.47%, Capital Goods up by 1.15% and PSU was up by 1.03%, while there were no losers on the sectoral space.

Meanwhile, given the increase in non-resident deposits, short-term debt and commercial borrowings by companies, India's external debt increased by 5.8% in April-September to $365.3 billion. The long-term debt, which forms 76.9% of total external debt, stood at $280.8 billion at end-September, showing an increase of 5.1% over the March-end 2012 level.

While, short-term debt which accounts for 23.1% of the country's total external debt registered 8.1% growth at $84.5 billion. Component-wise, the share of commercial borrowings stood highest at 29.8%, followed by NRI deposits at 18.3% and multilateral debt at 13.9%.

Debt denominated in US dollars topped the chart with a share of 55.7% in total external debt followed by the Indian rupee (22.9%) and Japanese yen (8.6%). Meanwhile, India’s foreign exchange reserves provided a cover of 80.7% to the total external debt stock at end-September against 85.2% at end-March, 2012.

The S&P CNX Nifty touched a high and a low of 5,963.90 and 5,935.20 respectively.

The top gainers on the Nifty were Reliance Infra up by 4.76%, Jindal Steel up by 3.38%, Hindalco up by 2.72%, PNB up by 2.58% and Tata Steel up by 2.44%.

The top losers of the index were Power Grid down by 0.74%, NTPC down by 0.61%, Infosys down by 0.50%, Asian Paint down by 0.37% and Hero MotoCorp down by 0.24%.

All major Asian as well as European markets remain closed for trade today.