Post session - Quick review

Benchmark equity indices, registering three positive closes out of five, concluded the week with modest gains. The last session of trade, turned out to be an optimistic one, with Sensex posting its biggest daily percentage gain in almost two weeks, thereby hinting that investor’s were confident enough ahead of the upcoming crucial week, marked RBI’s third quarterly monetary policy review and F&O expiry. Gaining steam gradually the barometer gauges halted at the highest point of the day, which led 30 share barometer index, Sensex and 50 share index, Nifty, piercing above the psychological 20,100 and 6050 respective levels, by the closing of the trade.  Additionally, broader indices luring substantial traction, outperformed frontline indices, by ending with gains of over a percent.

Sustained buying in rate sensitive counter’s Auto, Realty along with Bankex counters, on rate cut hopes amidst mostly positive European counterparts, mainly fuelled the rally at D-Street. The Reserve Bank of India (RBI) in its upcoming third quarterly monetary policy review on January 29, 2013, is widely expected to reward the government next week for its efforts to reform the economy and bring its finances under control, by announcing its first cut in interest rates in nine months. Additionally, Maruti Suzuki’s better than expected Q3 earnings, which besides spurring gains in Auto Pivotal, buttressed the overall sentiment in Indian equity markets.

Maruti Suzuki moved higher by 4% at Rs 1,596 after the company reported a better-than-expected 144% year-on-year (Y-o-Y) growth in net profit of Rs 501 crore for the third quarter ended December 31, 2012 (Q3) due to higher sales and good response to new models like Ertiga and Swift DZire.

On the global front, Asian pacific shares ended mixed close on Friday, despite expectations Japan will pursue bold policies to beat deflation and stimulate growth. Solid global economic data too kept a lid on the losses on the bourses. Manufacturing in China and the United States grew this month at the quickest pace in about two years while data suggesting German growth picked up boosted hopes for a swifter euro zone recovery. Additionally, European stock markets were mostly higher in early trade on Friday, with banks on the rise, while investors awaited news from the European Central Bank about long-term loan repayments from banks.

Closer home, all the 13 index pivotals ended in green terrain, however, even telecom stocks lured sufficient traction for the session. Telecom stocks, namely, Reliance Communication, MTNL gained, however, Bharti Airtel and Idea Cellular lost momentum by the end of the trade. Telecom stocks ended the trade on mixed note after Empowered Group of Ministers (EGoM) on telecom in its meeting on January 24, failed to take a decision on how many blocks an operator should be allowed to bid for in the auction that starts on March 11. Meanwhile, buying in select blue chip stocks also aided the upside chances of the bourses. Heavyweights, such as ITC, Infosys, ICICI Bank and HDFC bank, all scooped modest gains. Shares in ITC gained as investors saw previous fears of a potential duty on cigarettes as having dragged down the stock excessively. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1655:1220 while 115 scrips remained unchanged. (Provisional)

The BSE Sensex gained 196.71 points or 0.99% and settled at 20120.49. The index touched a high and a low of 20129.01 and 19928.11 respectively. 24 stocks were seen advancing while 6 stocks were declining on the index (Provisional)

The BSE Mid-cap index and Small-cap index were up by 1.91% and 1.08% respectively. (Provisional)

On the BSE Sectoral front, Realty was up by 4.56%, Auto up by 2.23%, Metal up by 1.75%, Health Care up by 1.59% and PSU up by 1.44% were the top gainers, while there were no losers in the space.

The top gainers on the Sensex were Maruti Suzuki up by 4.25%, Jindal Steel up by 3.91%, Bajaj Auto up by 3.60%, Sun Pharma up by 2.73% and Mahindra & Mahindra up by 2.62%, while, Tata Power down by 1.12%, Coal India down by 0.79%, NTPC down by 0.56%, Bharti Airtel down by 0.55% and RIL down by 0.51% were the top losers in the index. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) tightening the rules of offering differential interest rates on large size term deposits, has also allowed  banks to now stop large depositors from premature withdrawal of their money.

As per RBI’s circular on ‘Interest Rates on and Premature Withdrawal of Rupee Term Deposits’, the bank can now charge different rates of interest only on bulk deposits of above Rs 100 million (i.e., Rs 10 crore), higher than previous limit of Rs 1.5 million. Meanwhile, for deposits below Rs 1 crore (10 million rupees), the same rate will be applicable for deposits of the same maturity.

Additionally, RBI has allowed banks to disallow premature withdrawal of deposits of over Rs 1 crore, of all depositors, including deposits of individuals and HUFs. However, bank should notify such depositors of its policy of disallowing premature withdrawal in advance, i.e., at the time of accepting such deposits. Further, banks will have the freedom to determine its own penal interest rates for premature withdrawal of term deposits.

India VIX, a gauge for markets short term expectation of volatility gained 2.14% at 14.77 from its previous close of 14.46 on Thursday. (Provisional)

The S&P CNX Nifty gained 58.45 points or 0.97% to settle at 6,077.80. The index touched high and low of 6,080.55 and 6,014.45 respectively. 38 stocks advanced against 11 declining and one remained unchanged on the index. (Provisional)

The top gainers on the Nifty were JP Associate was up by 5.01%, Bank of Baroda up by 4.75%, Reliance Infrastructure up by 4.25%, Bajaj Auto up by 4.17% and Maruti Suzuki was up by 4.16%. On the other hand, Tata Power down by 1.76%, UltraTech Cement down by 1.65%, ACC down by 1.17%, NTPC down by 0.78% and Coal India down by 0.70% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up by 0.59%, Germany’s DAX up by 0.94% and the United Kingdom’s FTSE 100 up by 0.12%.

Asian stock markets ended mixed on Friday, with Nikkei rallying due to continued weakness in the yen, followed by comments from Japanese Vice Finance Minister that the country is closely monitoring developments in the currency market. However, South Korea's Kospi extended its losing streak and closed lower weighted down by automakers. The mainland Chinese shares went home with red mark as investors booked profit in the banking sector. Moreover, Seoul, which fell on weak economic growth figures in the earlier session, took another hit on Friday after index giant Samsung Electronics posted below-forecast results for the October-December fourth quarter.