Post session - Quick review

Extending previous week’s euphoria to the fresh one, benchmark equity indices started the week on optimistic note thanks to the hectic buying activity in index heavyweight, Reliance Industries (RIL), which stroked its highest level since June 10, 2011 in early deals after beating expectations with a 24 percent increase in third-quarter net profit. Much of the buying in Capital Goods, Oil & Gas and Fast Moving Consumer Goods space mainly supported the gaining streak of the bourses. Additionally, Oil marketing companies extended gains after the government's decision to allow higher diesel prices; HPCL, BPCL and Indian Oil Corporation all scooped up gains of over a percent. However, bout of profit-booking, which emerged in the last hour of the trade, on account of relentless selling in rate sensitive Realty, Auto and Bankex counters, trimmed some portion of bourses’ gains.

By the end of the trade, 30 share barometer index, Sensex, settled with gains of over 50 points, above its psychological 20,000 level. Similarly, widely followed index, Nifty, too settled above its crucial 6000 mark, with over quarter of percent gains. However, the session turned out to be less production for broader indices, which concluded the trade on mixed note.

However, sentiment to some extent were also buttressed after global rating agency Moody's retained India's credit rating at the existing level, but cautioned that a high fiscal deficit could pull down the economic growth in the coming years. Moody's expects Indian economy to grow by 5.4 percent in the current fiscal and 6 percent in FY14 while, in the last fiscal, economy grew by 6.5 percent.

On the global front, Asian shares edged lower on Monday, taking a breather after hitting multi-month highs in last week, ahead of the outcome of the Bank of Japan’s policy meeting this week amid expectations for bold monetary easing measures. The Bank of Japan starts its two-day policy meeting on Monday under growing political pressure to pursue bolder measures to beat deflation, with speculation ranging from an open-ended commitment to buy assets until a 2 percent inflation target is achieved to simply boosting its asset buying schemes. However, European shares inched towards two-year highs, as a political attempt to break a budget impasse in the United States revived appetite for shares and dented appetite for safe-haven assets.

Closer home, corporate earning’s were a mixed bag. On one hand, Reliance Industries concluded with gains of over 2% after posting a better-than-expected 24 percent increase in third-quarter net profit, driven by a higher refining margin. UltraTech Cement gained over half a percent after the cement maker reported a 3 percent fall in October-December net profit at Rs 600 crore on Saturday. On the flip side, Housing Development Finance Corporation (HDFC), India's biggest mortgage lender, dropped close to a percent on missing market estimates by reporting a 16 percent rise in net profit for the Oct-Dec quarter on Monday. Further, India's largest power generation company NTPC’s too plummeted over 1% despite reporting higher than expected third quarter’s net profit, which grew by 21.9 percent year-on-year to Rs 2,596.8 crore. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1364:1519 while 132 scrips remained unchanged. (Provisional)

The BSE Sensex gained 62.05 points or 0.31% and settled at 20101.09. The index touched a high and a low of 20163.38 and 20056.46 respectively. 17 stocks were seen advancing while 12 stocks were declining and one remains unchanged on the index. (Provisional)

The BSE Mid cap index was down by 0.09% and Small cap index was up by 0.07%. (Provisional)

 On the BSE Sectoral front, Capital Goods was up by 1.60%, Oil & Gas up by 1.45%, FMCG up by 0.98%, Power up by 0.91% and TECk up by 0.38% were the top gainer, while Realty down by 1.23%, Health Care down by 0.39%, Bankex down by 0.31%, Auto down by 0.28% and IT down by 0.08% were the top losers in the space. (Provisional)

The top gainers on the Sensex were RIL up by 2.34%, BHEL up by 2.14%, Dr Reddys Lab up by 1.89%, Bharti Airtel up by 1.88% and L&T up by 1.85%, while, Sun Pharma down by 1.81%, HDFC down by 1.56%, TCS down by 1.55%, Cipla down by 1.34% and Tata Motors down by 1.28% were the top losers in the index. (Provisional)

Meanwhile, the global rating agency Moody's has retained India's credit rating at the existing level, but cautioned that a high fiscal deficit could pull down the economic growth in the coming years. Moody's expects Indian economy to grow by 5.4 percent in the current fiscal and 6 percent in FY14 while, in the last fiscal, economy grew by 6.5 percent.

The agency also highlighted factors like large government deficits and debt ratios as well as supply constraints in the form of infrastructure, policy and administrative inefficiencies constraining the sovereign credit profile. While on the positive side the global rating agency reaffirmed sovereign credit rating of India at Baa3, which indicates investment grade with a stable outlook.

As per the agency, the government finances are the weakest aspect of India's macroeconomic profile. Further, high commodity prices have raised the subsidy bill and the government's measures to reduce fuel and fertilizer subsidies are too modest to compensate for high global commodity prices. However, the agency’s report has not taken into account the recent decision of the government to partially deregulate diesel and allow oil market companies to raise price every month. 

Regarding the growth prospects, it said that a downturn was underway which could be made worse by slower global growth. While the robust domestic savings and a dynamic private sector would provide strength in the medium term.

On India’s outlook in the near term, the agency said improvement in fiscal situation would depend in increasing tax revenues and expediting PSU disinvestment. Further, on the rating upgrade, Moody's said that the improvement in investment climate, project completion, reduction in infrastructure bottlenecks and sustained improvement in public finances could lead to the credit rating upgrade. However, it also cautioned that a continued increase in government debt ratio and worsening of the balance of payments situation could lead a ratings downgrade.

India VIX, a gauge for markets short term expectation of volatility lost 1.65% at 13.66 from its previous close of 13.89 on Friday. (Provisional)

The S&P CNX Nifty gained 15.85 points or 0.26% to settle at 6,080.25. The index touched high and low of 6,094.35 and 6,065.10 respectively. 30 stocks advanced against 19 declining and one remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure was up by 3.99%, Bharti Airtel up by 2.36%, BHEL up by 2.23%, Reliance Industries up by 2.19% and Larsen & Toubro was up by 2.00%. On the other hand, DLF down by 2.53%, Sun Pharmaceuticals down by 1.69%, HDFC down by 1.67%, TCS down by 1.50% and Tata Motors down by 1.40% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up by 0.24%, Germany’s DAX up by 0.32% and the United Kingdom’s FTSE 100 up by 0.49%.

Most Asian markets ended lower on Monday, after touching multi month’s highs in last week, amid concerns whether political leaders in Washington will be able to reach a deal on the government's debt limit. Japan's Nikkei closed in negative territory ahead of Bank of Japan’s policy meeting and on profit-taking after the index posted its biggest one-day point and percentage gain since March 2011 on Friday. Moreover, China's Shanghai Composite went home with red mark as investors consolidated early session’s gains which came on the back of slightly better-than-expected fourth-quarter gross domestic product growth figures.