Post session - Quick review

Indian markets after two straight sessions of impressive rally seemed in a consolidation mood on Thursday. Though, the global cues remained jubilant but traders opted to take some breather before going ahead, also there was not much on the domestic front that could propel the markets further. Major indices made a positive start tailing the US markets which rallied overnight and the continued upmove in the Asian peers, however sharp selling pressure was exerted at the high points of the early trade that took markets in the red terrain, however there was a quick recovery amid sustained buying by funds and retail investors that led the markets once again enter the green and thereafter they managed to keep their momentum going despite some rounds of volatility.

The start of the markets was good and it looked the rally mood will continue after the US markets surged in overnight trade after a last-minute deal to avert the “fiscal cliff” of tax hikes and spending cuts that threatened to derail the economy. Though two of the major Asian markets Japan and China were not trading for the day but rest of the regional peers showed firmness and most of them finally closed with good gains. However there was some weakness in the European markets that looked fatigued after last session’s rally and weighed on the sentiment of the domestic market, however they too were unable to deter the market mood and local indices extended their gaining streak for the third straight day.

The major indices managed to hold their crucial levels of 19750 (Sensex) and 6000 (Nifty), while the broader markets outperformed and surged by near to a percent on BSE. The telecom sector was the star performer of the day ahead of the meeting of Empowered Group of Ministers (EGoM) on spectrum, headed by Finance Minister P Chidambaram to discuss modalities about the spectrum sale due this fiscal. The weakness in rupee gave a reason to smile to IT stocks and they surged by over a percent for the day, though the sector that remained in limelight since the beginning was oil & gas after Rangarajan panel suggested fixing a price of domestically-produced natural gas at an average of international hub prices and cost of imported LNG instead of the present mechanism of market discovery. Companies like RIL and GSPL moved up by more than a percent. The gold related stocks too remained in the limelight after the Reserve Bank of India issued draft guidelines suggesting that volume and value restrictions be placed on gold imports to help rein in a current account gap which touched an all-time high in the July-September quarter. PMEAC chief Rangarajan too has said that gold imports are running much above the average seen in previous years and a hike in import duty on gold will help reduce the CAD. Gold loan companies Manappuram Finance and Muthoot Finance were up by over 10% and 20% respectively.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1655:1297 while 148 scrips remained unchanged. (Provisional)

The BSE Sensex gained 38.66 points or 0.20% and settled at 19752.90. The index touched a high and a low of 19786.30 and 19693.29 respectively. 13 stocks were seen advancing while 17 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.70% while Small-cap index was down by 0.90%. (Provisional)

On the BSE Sectoral front, TECk was up by 1.45%, Oil & Gas up by 1.28%, IT up by 1.24%, Realty up by 0.84% and PSU up by 0.43% were the top gainers, while Capital Goods down by 0.69%, FMCG down by 0.61%, Consumer Durables down by 0.47%, Bankex down by 0.21% and Auto down by 0.17% were the top losers in the space.

The top gainers on the Sensex were Dr Reddys Lab up by 2.35%, Bharti Airtel up by 2.32%, ONGC up by 1.86%, Infosys up by 1.58% and RIL up 1.55%, while, Tata Power down by 1.48%, Hero Moto Corp down by 1.27%, L&T down by 1.10%, Sun Pharma down by 1.06% and Maruti Suzuki down by 0.94% were the top losers in the index. (Provisional)

Meanwhile, as per the Prime Minister's Economic Advisor Council Chairman C Rangarajan, current account deficit is likely to be around the last year's level of 4.2 percent of the GDP for 2012-13 financial year. Expressing view on the contraction of current account deficit in second half of current fiscal, Rangarajan said, 'the export sector will be much better in the second half of this fiscal than the first half'.

Further, Rangarajan believes for the year as whole capital inflows will be adequate to cover CAD of the current fiscal year. In the past capital inflows though FDI, FII, external commercial borrowings or NRI deposits have been adequate to cover the current account deficit. On the rupee movement, he said that the mismatch between capital flows and current account deficit added pressure on the currency and so far this fiscal, capital inflow has remained adequate therefore, the downward pressure on the rupee is unlikely.

India’s current account deficit (CAD) hit 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.

India VIX, a gauge for markets short term expectation of volatility lost 1.75% at 13.47 from its previous close of 13.23 on Wednesday. (Provisional)

The S&P CNX Nifty gained 12.15 points or 0.20% to settle at 6,005.40. The index touched high and low of 6,017.00 and 5,986.55 respectively. 26 stocks advanced against 23 declining and one remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Cairn was up by 2.44%, Dr Reddy’s Lab was up by 2.36%, Bharti Airtel was up by 2.29%, ONGC was up by 1.97% and Infosys was up by 1.63%. On the other hand, Tata Power down by 1.56%, Punjab National Bank down by 1.27%, Lupin down by 1.20%, Sun Pharma down by 1.19% and Hero Moto Corp down by 1.12% were the top losers. (Provisional)

The European markets were trading in red, France’s CAC 40 down by 0.53%, the United Kingdom’s FTSE 100 down by 0.15% and Germany’s DAX down by 0.30%.

Asian markets ended mostly higher on Thursday after US lawmakers agreed a deal to avert the fiscal cliff, but worries about upcoming fights in Washington weighted the sentiments. Investors were hopeful for the steady economic revival in China, on the data showing that services sector expanded in December. South Korean market closed lower as car makers and other exporters fell on concerns that the firming local currency will sap their profits. Meanwhile, Hong Kong’s market closed in green, as last year's growth-sensitive laggards leading gains on Thursday.

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