Post session - Quick review

Snapping eight long session’s losing streak, benchmark equity indices showcased surprising trend in light of negative macro-economic reports, which yet again proved that the economy was not out of the woods. Support, which emerged at lower level in Indian equity markets, mainly pushed benchmarks out of the red terrain in absence of supportive global cues. Mainly weak IIP data which is expected to pile up some more pressure on the Reserve Bank of India (RBI) to cut its policy rate by a further 25 basis points, in its next policy review on March 19, lifting rate sensitive’s restored the lost fatigue of the bourses.

Extending a period of gloom in Asia's-third largest economy, India's annual industrial output growth measured by index of industrial production (IIP), contracted by 0.6% at 179.3 for the month of December 2012 against contraction of 0.1%, later revised to -0.8%, in the previous month. However, the gains at D-street were limited as annual rate of inflation, based on the consumer prices index (CPI) in India, crept higher in the month of January at 10.79%.

Thus, on emergence of buying by funds and investors, 30 share index, Sensex, ended above the mental 19550 level, with gains of over half a percent. Likewise, widely followed index, Nifty, too gaining over quarter of points, ended above 5900 bastion.

On the global front, most of the Asian markets remain closed for trade on account of Lunar New Year, while Japan's Nikkei soared on Tuesday amid fresh yen weakness following recent comments from Japanese officials. The safe-haven currency weakened against both the U.S. dollar and the euro on Monday after prospective Bank of Japan Governor Haruhiko Kuroda reportedly said he is open to further easing this year. European shares were showcasing mixed trend, with downbeat outlooks from firms such as Dutch navigation devices and digital map company TomTom weighing on the sentiment.

Closer home, gains at D-street were led by stocks from Oil & Gas, Health Care (HC) and Public Sector Undertaking (PSU) counters, while Auto and  Bankex counters too gave a helping hand to lift equity markets from the doldrums. Meanwhile, PSU oil marketing companies, viz, BPCL, HPCL and IOC, showed heartwarming trend as the Finance Ministry has stated that Rs 25,000 crore additional cash subsidy for the fiscal will be given for selling diesel, domestic LPG and PDS kerosene at controlled prices. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 823: 758 while 1357 scrips remained unchanged. (Provisional)

The BSE Sensex gained 105.34 points or 0.54% and settled at 19565.91. The index touched a high and a low of 19583.53 and 19438.53 respectively. 17 stocks were seen advancing while 13 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.24% while Small-cap index was down by 0.44%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 1.58%, Health Care up by 1.23%, PSU up by 1.11%, Auto up by 0.85% and Bankex up by 0.81% were the top gainer, while Realty down by 3.93%, IT down by 0.65%, Power down by 0.36%, Metal down by 0.35% and TECk down by 0.34% were the top losers in the space.

The top gainers on the Sensex were ONGC up 3.76%, Sun Pharma up 2.82%, Tata Motors up by 2.29%,  Coal India up by 1.85% and Bharti Airtel up by 1.60%, while, Jindal Steel down by 3.26%, Sterlite Industries down by 1.50%, Infosys down by 1.37%, Tata Power down by 0.87% and Cipla down by 0.68% were the top losers in the index. (Provisional)

Meanwhile, extending a period of gloom in Asia's-third largest economy, India's annual industrial output growth measured by index of industrial production (IIP), contracted by 0.6% at 179.3 for the month of December 2012 against contraction of 0.1%, later revised to -0.8%, in the previous month. The numbers were way lower than street expectation of over 1% growth figure. The cumulative growth for the period April-December 2012-13 over the corresponding period of the previous year stands at 0.7%.

The industrial output has mostly remained sluggish in the previous few months, with months of August and October being an exception, as growth in all three sectors viz. mining, manufacturing and electricity remain subdued.

After staging growth albeit minute in the previous month, the manufacturing sector, which constitutes about 75.53 percent of industrial production, contracted by 0.7% from a year earlier, the worst output growth since September. Mining sector, which constitutes about 14.6 percent of industrial production, also witnessed massive contraction of 4.0% (y-o-y), but less than the previous month figure of -5.5%. However, electricity sector showcasing growth rose to 5.2% from a year earlier and also higher against 2.4% in the previous month. Cumulative growth in the three sectors during April-December 2012-13 over the corresponding period of 2011-12 has been (-) 1.9%, 0.7% and 4.6% respectively.

Further, Capital goods output, a key investment indicator, stood at -0.9% against -7.7% in November. Consumer goods, witnessed massive contraction of 4.2% against growth figure of 1% in November, driven by contraction of Consumer durables and Consumer non-durables at -8.2% and -1.4% respectively.

Factory output has been dented by relatively weak global trade, especially from Europe, India's largest trade partner, with the debt-ravaged euro zone economy expected to contract again this year. This weak data is expected to pile up more pressure on the Reserve Bank of India (RBI) to cut its policy rate by a further 25 basis points, in its next policy review on March 19.

Caving into growing clamour for a rate cut, the RBI, in ‘Third Quarter Review of Monetary Policy 2012-13’, went ahead and slashed repo rate by 25 basis points to 7.75 per cent against 8 per cent earlier and reduced cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25 per cent to 4.0 per cent of their net demand and time liabilities (NDTL).

India VIX, a gauge for markets short term expectation of volatility lost 2.17% at 15.31 from its previous close of 15.65 on Monday. (Provisional)

The S&P CNX Nifty gained 26.35 points or 0.45% to settle at 5,924.20. The index touched high and low of 5,927.65 and 5,886.45 respectively. 31 stocks advanced against 19 declining ones on the index. (Provisional)

The top gainers on the Nifty were ONGC was up by 3.62 %, Sun Pharmaceuticals up by 3.29%, HCL Tech up by 3.16%, Tata Motors up by 2.46% and Coal India was up by 1.94%. On the other hand, Jindal Steel down by 3.39%, ACC down by 1.52%, IDFC down by 1.49%, Infosys down by 1.27% and DLF down by 1.27% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up by 0.06% and the United Kingdom’s FTSE 100 up by 0.11% while, Germany’s DAX down by 0.30%.

Asian markets ended mostly higher in holiday-thinned trade on Tuesday. Japan’s Nikkei went home with green mark, as yen fell against the dollar after US Treasury official Lael Brainard praised Tokyo's efforts to boost growth and counter deflation. However, Seoul closed lower after news that North Korea had successfully tested a nuclear bomb.

Jakarta Composite surged 45.00 points or 1.00% to 4,548.24 and Nikkei 225 soared 215.96 points or 1.94% to 11,369.12.

On the flip side, KOSPI Composite was down by 5.11 points or 0.26% to 1,945.79.

Hong Kong, China, Taiwan, Singapore and Malaysia are all closed. Hong Kong and Singapore will resume trading on February 13 and Taiwan will reopen on February 14.