Post session - Quick review

It turned out to be extraordinary session of trade at D-street, wherein benchmark equity indices putting up a smart rally soared to two year’s high level on account of hectic buying activity in risky asset class such as equities. Bourses turbo-drove after India deferred implementation of controversial rules on tax avoidance until 2016 and after a slower-than-expect rise in inflation cemented hopes for an interest rate cut this month. The deferral of General Anti-Avoidance Rules had been expected, but supported markets on a day in which data showed India's headline inflation rose at its slowest pace in three years, i.e., at 7.18% (Provisional) for the month of December, 2012 as compared to 7.24% for November and 7.74% during the corresponding month of the previous year. Thus, soaring today’s high level, 30 share barometer index, Sensex, puffed up over 200 points, to cruise past psychological 19900 level. Similarly, widely followed index, Nifty, too rallying over 75 points, ended past 6000 bastion. Additionally, broader indices too went home with handsome amount of gains.

Further, surge of select blue chip-stocks, namely, Infosys, TCS and DLF also took markets higher. Property developer DLF which rallied as much as 6 percent on rate cut hopes and after J.P Morgan upgraded the stock, citing an improving earnings outlook and debt reduction, mainly spurred gains for Realty counter. Additionally, shares of Infosys continued with its upward momentum and surged over 3 per cent on the back of follow-up buying in the stock after the IT major surprised the street positively by announcing better-than-expected results.

Additionally, positive global cues also cushioned the market’s rally. Asian pacific shares notched higher on Monday, with Chinese stocks hitting a seven-month high after the head of China's securities regulator made comments on foreign participation in China's largely closed off stock market, while Singapore declined as property developers fell after the government introduced new cooling measures. Shanghai Composite gained as much as 3% after China Securities Regulatory Commission Chairman Guo Shuqing said at a conference in Hong Kong that China could substantially increase the quota for foreign investors to invest in domestic stocks as a means to develop the market. Moreover, European shares too added gains as the region's improving economic growth outlook and the declining prospects of further monetary easing bolstered demand.

Closer home, much of the support was rendered from stocks belonging to Realty, Information Technology and Oil & Gas counters. Further, even telecom stocks rang-loud on getting SC Reprieve till February 4. The Supreme Court Monday allowed telecom operators whose licences were cancelled by its February 2, 2012 order to continue their services till Feb 4, 2013. On the flip side, only stocks from Auto and Health Care (HC) counters emerged as the weak spots of the trade. Nevertheless, sentiments also turned sour in the noon deals after India's CPI Inflation rose to 10.56% in December, faster than the 9.9 percent gain seen in November. Nevertheless, lower than expected WPI data combined with GAAR deferral provided the required fillip to Indian equity markets, thereby taking them to day’s high by their close.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 969:667 while 1362 scrips remained unchanged. (Provisional)

The BSE Sensex gained 280.10 points or 1.42% and settled at 19943.74. The index touched a high and a low of 19948.63 and 19689.09 respectively. 22 stocks were seen advancing while 8 stocks were declining on the index (Provisional)

The BSE Mid cap and Small cap indices rose 1.30% and 0.86% respectively. (Provisional)

 On the BSE Sectoral front, Realty was up by 5.34 %, IT was up by 2.76%, TECk was up by 2.57%, Oil & Gas was up by 2.05% and PSU up by 1.74% were the top gainers, while AUTO down by 0.39% and Health Care down by 0.05% were the only losers in the space.

The top gainers on the Sensex were ONGC up by 4.91%, Infosys up by 3.68%, Jindal Steel up by 3.46%, HDFC up by 2.71% and TCS up 2.35%, while, Maruti Suzuki down by 1.66%, Cipla down by 1.28%, Bajaj Auto down by 1.27%, Tata Motors down by 0.73% and Mahindra & Mahindra down by 0.66% were the top losers in the index. (Provisional)

Meanwhile, giving relief to the markets and investors, Finance minister P Chidambaram has said the GAAR (General Anti-Avoidance Rules), the controversial law against tax avoidance through foreign investments, has been deferred to April 2016. Earlier, the finance ministry had deferred GAAR implementation to April, 2014.

While, the government has proposed the GAAR in 2012-13 budget to prevent tax evasion and evoked sharp reactions from foreign as well as domestic investors who feared that unbridled powers to taxmen would result in harassment of investors. Amendments to GAAR are set to be finalized according to the Chapter 10A of the Income Tax Act.

India VIX, a gauge for markets short term expectation of volatility gained 3.55% at 13.70 from its previous close of 13.23 on Friday. (Provisional)

The S&P CNX Nifty gained 82.30 points or 1.38% to settle at 6,033.60. The index touched high and low of 6,036.90 and 5,962.15 respectively. 37 stocks advanced against 13 declining on the index. (Provisional)

The top gainers on the Nifty were DLF was up by 7.75%, ONGC was up by 4.87%, HCL Tech was up by 4.70%, Jindal Steel was up by 3.70% and Infosys was up by 3.61%. On the other hand, Lupin down by 1.65%, Bajaj-Auto down by 1.41%, Maruti Suzuki down by 1.38%, Cairn down by 1.20% and CIPLA down by 1.19% were the top losers. (Provisional)

European markets were trading in green, Germany’s DAX up by 0.81%, the United Kingdom’s FTSE 100 up by 0.16% and France’s CAC 40 down by 0.49% while there was no loser in space.

Asian markets mostly ended higher on Monday, as Chinese stocks rallied considerably after head of the securities regulator commented that the country may soon relax restrictions on foreign equities investment. However, Singapore market closed lower as stocks of property developers fell after the government introduced new cooling measures. South Korean stocks went home with green mark, reversing earlier losses, with institutional and retail investors buying shares. In Japan, Bank of Japan Governor Masaaki Shirakawa is to give a speech on Tuesday, which could have an impact on the yen if he suggests that policy makers intend to raise their inflation target in light of Prime Minister Shinzo Abe's continued calls for a clear 2.0% inflation target.

Japanese markets were closed for a public holiday.