Benchmarks snap eight days losing streak; Nifty reclaims 5,900 level

Shrugging off negative macro-economic reports, Indian equity benchmarks ended the session with a gain of over half a percent, snapping their eight days losing streak. Both the frontline indices ended the session above their crucial 5,900 (Nifty) and 19,550 (Sensex) levels mainly supported by buying in oil and gas and public sector undertaking counters. Though, the markets traded with volatility near their pre-close levels in the first half as industrial output contracted to a three-month low of 0.6 per cent in December due to poor performance of manufacturing and mining sectors and decline in production of capital as well as consumer goods.

Industrial production growth stood at 0.7 per cent during the April-December period of this fiscal, down from 3.7 per cent in the same period of 2011-12. Meanwhile, the decline in industrial output for November 2012 has been revised downwards to 0.84 per cent from a contraction of 0.1 per cent in the month as per the provisional estimates released last month. Extending a period of gloom in Asia’s-third largest economy, provisional annual inflation rate based on all India general consumer prices index (CPI) (Combined) for January 2013 on point to point basis stood at 10.79 per cent as compared to 10.56 per cent for the previous month of December 2012.

Global cues too remained unsupportive as European counters traded mostly in the red in early session on the back of discouraging earnings outlook by select corporates. While, in Asia, the yen recovered from lows against the dollar and Tokyo stocks jumped closer to a 33-month high on Tuesday after markets took comments from a US official as approval for Japan to pursue anti-deflation policies that weaken the yen.

Back home, markets witnessed traction in second half and started moving northward as continued buying in oil and gas sector was seen after Finance Ministry 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. Sentiments also got some support after Nasscom reported that export growth from India’s IT outsourcing sector is set to accelerate in the fiscal year starting in April as hopes rise that an improving global economy will drive demand. The sector’s exports are expected to grow between 12 and 14 percent in 2013/14 to as much as $87 billion.

The NSE’s 50-share broadly followed index Nifty rose by over twenty points to end above the psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by hundred points to finish below the psychological 19,550 mark. However, broader markets struggled to get traction and ended the session in the red with a cut off half a percent.

The overall volumes stood above Rs 1.10 lakh crore, which remained on the lower side as compared to that on Monday. The market breadth remained in favor of advances as there were 864 shares on the gaining side against 1,289 shares on the losing side while 785 shares remain unchanged.

Finally, the BSE Sensex gained 100.47 points or 0.52% to settle at 19,561.04, while the S&P CNX Nifty rose by 24.65 points or 0.42% to end at 5,922.50.

The BSE Sensex touched a high and a low of 19,583.53 and 19,438.53, respectively. The BSE Mid cap index down by 0.31% and Small cap index was down by 0.51%.

The top gainers on the Sensex were, ONGC up by 3.81%, Sun Pharma up by 2.84%, Tata Motors up by 2.65%, Coal India up by 1.85% and Bharti Airtel up by 1.79%, while Jindal Steel down by 3.35%, Sterlite Industries down by 1.31%, Infosys down by 1.29%, Tata Power down 0.77% and Cipla down by 0.48% were the top losers on the index.

The top gainers on the BSE Sectoral space were, Oil & Gas up 1.52%, Health Care up 1.19%, PSU up 1.15%, Auto up 0.94% and Bankex up 0.63%, while Realty down 3.96%, IT own 0.63%, Metal down 0.35%, TECk down 0.33% and Power down 0.28% were top losers on the sectoral space.

Meanwhile, to seek State Finance Ministers approval on design of Goods and Services Tax (GST) Bill, Union Finance Minister P Chidambaram will meet the ministers on February 14, so that a broad outline of the indirect tax regime can be included in the 2013-14 Budget, which is scheduled to be presented on February 28. For FY14 budget, finance minister is expected to recommend certain changes in the GST Bill to the Parliamentary Standing Committee on Finance.

Last month, the Empowered Committee of State Finance Ministers had reached a broad consensus on the design of GST, under which the states will be free to decide on the time of its introduction. Further, the committee also decided to suggest the finance ministry for incorporating the provisions to allow the states to opt out of the GST fold and thereby, making it optional. Moreover, states had also agreed to a lower payment of Rs 34,000 crore for phasing out the Central Sales Tax, a pre-condition for rollout of the GST.

The committee has also agreed for a single rate of GST and there would be a floor rate with a band, giving freedom to states to fix their own rates. The government is also expected to firm up the indirect tax proposals for the coming budget on February 14 meeting.

The S&P CNX Nifty touched a high and a low of 5,927.65 and 5,886.45 respectively.

The top gainers on the Nifty were ONGC up by 3.62%, Sun Pharma up by 3.29%, HCL Tech up by 3.16%, Tata Motors up by 2.46% and Coal India up by 1.94%.

The top losers of the index were Jindal Steel down by 3.39%, ACC down by 1.52%, IDFC down by 1.49%, DLF down by 1.27% and Infosys down by 1.27%.

The European markets were trading mixed, France’s CAC 40 up by 0.41%, United Kingdom’s FTSE 100 up by 0.21% and Germany’s DAX down by 0.08%.

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.