Rally in rate sensitives stocks fortify benchmarks; Sensex re-conquers 20,100 mark

Indian equity benchmarks showcased enthusiastic performance on last trading day of the week with frontline indices re-capturing their psychological 6,050 (Nifty) and 20,100 (Sensex) levels in the session. The gains appeared even more prominent as they came on a day when Asian markets, despite Japanese Nikkei exhibited uninspiring trends. Earlier, the local bourses, in the first half, traded range bound with slender gains. Afterwards, there appeared not even an iota of profit booking in the second half of trade as the benchmarks managed to fervently gain from strength to strength after rally in banks and real-estate ahead of key central bank monetary policy review next week. The Reserve Bank of India will unveil its third-quarter policy review on January 29 amid hopes the central bank may cut interest rates to boost growth of Asia’s third-biggest economy.

European counters too traded jubilantly 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. However, Asian equity indices ended mixed on concern over corporate profitability while Japanese shares rose on optimism about the earnings prospects for exporters with the yen weakening. Meanwhile, Japan’s core consumer prices slipped for a second straight month in the year to December, signaling the economy was still in deflation and piling more pressure on the central bank to adopt further stimulus steps to achieve its new inflation target.

Back home, sentiments remained jubilant after Urban Development Minister Kamal Nath emphasized that India has seen a large number of reforms in recent years and the country expects to see about $1 trillion investments in infrastructure in the next five years to boost economic growth. Some strength also came in from over two percent rally in Auto sector supported by stronger-than-expected third quarter result from Maruti Suzuki. The company reported 144-percent surge in its net profit at Rs 501.29 crore for the quarter ended December 31, 2012 as compared to Rs 205.62 crore for the same quarter in the previous year on the back of higher sales and good response to new models like Ertiga and Swift DZire.

Up-move in metal counters too aided the sentiments as stocks like Tata Steel, Jindal Steel, Sesa Goa, Sterlite Industries and Hindalco all edged higher as manufacturing surveys out from China, Europe and the US on January 24, 2013 pointed to an improvement in the global economy. 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 a 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.

The NSE’s 50-share broadly followed index Nifty gained by fifty five points to end above its psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by about one hundred and eighty points to finish over its psychological 20,100 mark. Moreover, the broader markets too traded jubilantly and garnered gigantic gains of 1-2 percent.

The overall volumes stood at over Rs 2.15 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth remained in favor of advances as there were 1,663 shares on the gaining side against 1,214 shares on the losing side while 114 shares remain unchanged.

Finally, the BSE Sensex rose 179.75 points or 0.90% to settle at 20,103.53, while the S&P CNX Nifty gained by 55.30 points or 0.92% to end at 6,074.65.

The BSE Sensex touched a high and a low of 20,129.01and 19,928.11, respectively. The BSE Mid cap index up by 1.83% and Small cap index was up by 1.03%.

The top gainers on the Sensex were, Maruti Suzuki up by 4.15%, Bajaj Auto up by 3.36%, Jindal Steel up by 3.27%, Mahindra & Mahindra up by 2.58% and Tata Motors up by 2.55%, while Tata Power down by 1.03%, Coal India down by 073%, NTPC down by 0.50%, Hero MotoCorp down 0.39% and Bharti Airtel down by 0.39% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up by 4.42%, Auto up 2.19%, Consumer Durables (CD) up 1.71%, Metal up 1.56% and Health Care (HC) up 1.50%, while there was no loser on the sectoral space.

Meanwhile, the 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. In the previous auction, as per the government condition, telecom operators had to bid for minimum 4 blocks of 1.25 MHz each for the 1800 MHz band and for CDMA band, operators had to bid for at least two blocks.

For the upcoming spectrum auction, the Department of Telecommunications (DoT) has decided to auction 34 blocks of 1.25 MHz each in the 900 MHz band, 40 blocks of 1.25 MHz each in the 1,800 MHz band, and 64 blocks of 1.25 MHz each in the 800 MHz CDMA band.

Earlier, to ensure aggressive bidding, the DoT had also proposed that there should not be any restriction on the number of slots that a company should be allowed to bid in the upcoming auction for both CDMA and GSM spectrum. However, in the previous auction, the DoT’s proposal received tepid response with no bidder for the 800 MHz band of CDMA spectrum. 

The S&P CNX Nifty touched a high and a low of 6,080.55 and 6,014.45 respectively.

The top gainers on the Nifty were JP Associates up by 5.01%, Bank of Baroda up by 4.75%, Reliance Infra up by 4.25%, Bajaj Auto up by 4.17% and Maruti Suzuki up by 4.17%.

The top losers of the index were Tata Power down by 1.76%, Ultra Cement down by 1.65%, ACC down by 1.17%, NTPC down by 0.78% and Coal India down by 0.70%.

The European markets were trading in green, France’s CAC 40 up by 0.64%, United Kingdom’s FTSE 100 up by 0.16% and Germany’s DAX up by 1.01%.

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.