Jubilation continues for second consecutive day; Sensex conquers 19,700 bastion

Extending their previous session’s rally, Indian frontline equity indices took a quantum leap on the second trading session of 2013 by Sensex vehemently rallying to re-conquer the psychological 19,700 levels while, Nifty ended tad below its crucial 6,000 level. The benchmarks not only propped up by over half a percent but also underpinned them to hit the highest levels Since January 7, 2011. The frontline indices throughout the session traded firmly as enthusiastic investors focused on hefty bottom fishing in fundamentally strong equities. Some strength also came in after Indian rupee appreciated by 36 paise to trade at fresh two-week high of Rs 54.32 against the US dollar at the Interbank Foreign Exchange on increased dollar selling by exporters and banks amid sustained foreign capital inflows.

The global cues too remained jubilant as Asian and European markets cheered the developments in the US after a major risk for investors appeared to have receded for now. The United States averted economic calamity when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the world’s largest economy off a fiscal cliff and into recession.

Back home, across the board buying was evident in the session as manufacturing activity surged to a six-month high in December, boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June. The HSBC Markit India Manufacturing PMI, which gauges the business activity of India’s factories, jumped to 54.7 in December from 53.7 in November, its biggest monthly rise since January 2012.

Markets mood also got some boost after the banking counter garnered traction in the session amid hopes of monetary easing by the Reserve Bank, while the decline in government bond yields for second day in a row also helped most banking names in spiking up. Some amount of supported also came in from Auto space which gained about a percent as companies like Hero MotoCorp, Atul Auto and Bajaj Auto registered decent gains in December sales. Bajaj Auto has sold 3,43,946 units in passing month as compared to 3,05,690 units in the same month last year while, Atul Auto’s sales increased by 20.51 percent to 2,844 vehicles in December 2012 as compared to 2,360 vehicles sold in December 2011.

Sentiments also got support after jewellery stocks like Tribhovandas Bhimji Zaveri, Thangamayil Jewellery and PC Jeweller traded jubilantly as government slashed the import tariff value of gold and silver to $ 539 per 10 gm and $979 per kg, respectively. PSU stocks too traded with traction after government initiated the process of appointing merchant bankers for managing the 12.5 per cent stake sale in Rashtriya Chemicals and Fertilisers. The PSU oil marketing companies BPCL, HPCL and IOC too edged higher after the Petroleum ministry on January 1, 2013, said the under-recovery on High Speed Diesel has decreased to Rs 9.03 per litre applicable for the first fortnight of January 2013.

The NSE’s 50-share broadly followed index Nifty rose by about forty points to end near the psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over one hundred and thirty points to finish above the psychological 19,700 mark. Moreover, broader markets traded neck-to-neck with benchmarks and ended the session with a gain of over half a percent.

The overall volumes stood above Rs 1.30 lakh crore, which remained on the higher side as compared to that on Tuesday. The market breadth remained in favor of advances as there were 1,791 shares on the gaining side against 1,168 shares on the losing side while 142 shares remain unchanged.

Finally, the BSE Sensex gained 133.43 points or 0.68% to settle at 19714.24, while the S&P CNX Nifty rose by 42.40 points or 0.71% to end at 5,993.25.

The BSE Sensex touched a high and a low of 19756.68 and 19686.50, respectively. The BSE Mid-cap index was up by 0.56% and Small-cap index ended higher by 0.90%.

The top gainers on the Sensex were, Bajaj Auto up by 3.07%, Maruti Suzuki up by 2.74%, ONGC up by 2.50%, BHEL up by 2.38% and Sterlite Industries up by 2.19%, while, Wipro down by 0.78%, ITC down by 0.61%, Mahindra & Mahindra up 0.44%, Coal India up 0.35% and Hindustan Unilever down by 0.14% were the top losers on the index.

The top gainers on the BSE Sectoral space were Consumer Durables (CD) up by 1.65%, Capital Goods (CG) up by 1.40%, Oil & Gas up by 1.29%, PSU up by 1.02% and Bankex was up by 0.96%, while FMCG down 0.26% and IT down 0.07% were top losers on the sectoral space.

Meanwhile, the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas after reviewing the international prices of crude oil and petroleum products during the 2nd Fortnight of December 2012 has reported that in first fortnight of January (effective 01.01.2013) under-recovery on High Speed Diesel decreased to Rs 9.03 per litre from the Rs 9.28 per litre in 2nd fortnight in December. In case of Domestic LPG, the under-recovery for January 2013 remains unchanged at Rs 490.50 cylinder. The under-recovery on PDS Kerosene, too, has remained at same level of Rs 30.64 per litre for January 2013.

The Domestic LPG under-recovery in 2nd fortnight declined to Rs 490.50 from Rs 520.50 in 1st fortnight of December. The Under-recovery on PDS Kerosene decreased to Rs 30.64 per litre in 2nd fortnight of December 2012 from 30.93 in 1st fortnight. An additional subsidy of Rs 0.82/litre on PDS Kerosene and Rs 22.58/Cylinder on Domestic LPG is provided by the Government.

The analysis cell has further reported that under-recovery for December on Domestic LPG, and PDS Kerosene remain high and oil marketing companies are currently (effective from 1stJanuary 2013) incurring daily under-recovery of about Rs 389 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This was Rs 420 crore per day for the previous fortnight effective 16.12.2012. Though, crude oil price for Indian Basket went down to $ 108.46 per barrel on 31.12.2012.

The S&P CNX Nifty touched a high and a low of 6,006.05 and 5,982.00 respectively.

The top gainers on the Nifty were Bajaj Auto up by 3.66%, JP Associates up by 3.40%, Maruti up by 3.28%, BPCL up by 3.14% and IDFC up by 3.08%.

The top losers of the index were Asian Paint down by 0.97%, Bharti Airtel down by 0.65%, ITC down by 0.59%, M&M down by 0.54% and Wipro down by 0.48%.

The European markets were trading in green, France’s CAC 40 up by 2.73%, Germany’s DAX up by 2.00% and the United Kingdom’s FTSE 100 up by 1.98%.

Asian markets ended mostly higher on the first trading day of the year as the US Congress backed a deal to avert a fiscal cliff of drastic tax rises and spending cuts in an upbeat start to the year for regional markets. Hong Kong closed higher after touching 19-month high as China's manufacturing sector continued to grow. Moreover, benchmarks in Singapore, Taiwan, the Philippines, Thailand and Indonesia posted solid gains.

Markets in Japan and China remained shut for public holidays and will reopen on Friday.