Benchmarks showcase scintillating performance on Tuesday

Stock markets in India showcased high degree of resilience on Tuesday as the benchmark equity indices finished an extremely volatile session on a sanguine note. The benchmark gauges showcased a strong performance by vehemently garnering close to a percentage point and the sharp rally looked even more prominent since it came on a day when equity indices across Asia largely exhibited mostly negative trends while European counterparts traded on a positive note, but failed to match the fervor with which the Indian bourses soared.

The frontline indices, with the sharp upmove in late trade not only surpassed the psychological 5,900 (Nifty) and 19,500 (Sensex) levels but also regained most part of the ground lost in previous three weeks brutal sell-off. After getting off to a flat-to-negative opening, the markets traded in close proximity with the previous closing levels for most part of trade as cues from the Asian space remained sluggish. But, markets regained strength in last leg of trade and ended the session near intraday high supported by firm opening in European counterparts.

Sentiments also got some support from continued buying in sugar stocks on news that Centre is likely to take a decision on giving freedom to the Rs 80,000 crore sugar industry to sell the sweetener in the open market in few days. Sugar stocks including Balrampur Chini, Triveni Engineering and Rana Sugar all edged higher in the trade. Meanwhile, government’s decision to cancel its last bond auction for 2012-13 in view of its improving cash position also boosted the sentiments of the traders.

On the global front, European counters traded firmly in the early trade with shares of Danone SA leading the charge north after a job-cut announcement, while investors also awaited the latest take on economic sentiment in Germany. Meanwhile, Asian markets ended mostly lower with Chinese benchmark losing the most, dragged down by real estate and financials, as investors grew concerned that rising property prices would lead to fresh restrictions on the sector.

Back home, gains of likely candidates for banking licences, IFCI, Mahindra and Mahindra Financial Services and Shriram Transport Finance Company, too bolstered the sentiment. NBFC rose a day after RBI Deputy Governor Anand Sinha said RBI would issue final guidelines on new bank licences before the end of March. Shares related to construction too remained on the buyers’ radar on expectations that the government will provide thrust on infrastructure development in Union Budget 2013-14 to be tabled in the Parliament on February 28, 2013. On the flip side, Bharti Airtel and Idea Cellular edged lower on the bourses on Tuesday after the government cleared a proposal to allow 4G licence holders to also offer voice calling services, leading to more competition in the telecom sector.

The NSE’s 50-share broadly followed index Nifty rose by forty points to end above the psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained by over one hundred and thirty points to finish above the psychological 19,600 mark. Moreover, broader markets too traded with traction and ended the session with a gain of over a percent. The market breadth remained in favor of advances as there were 1,371 shares on the gaining side against 742 shares on the losing side while 847 shares remain unchanged.

Finally, the BSE Sensex gained 134.64 points or 0.69% to settle at 19,635.72, while the S&P CNX Nifty rose by 41.50 points or 0.70% to end at 5,939.70.

The BSE Sensex touched a high and a low of 19,671.17 and 19,457.21, respectively. The BSE Mid cap index up by 1.12% and Small cap index was up by 0.94%.

The top gainers on the Sensex were, ONGC up by 4.03%, Bajaj Auto up by 2.36%, Maruti Suzuki up by 2.19%, BHEL up by 2.00% and Cipla up by 1.96%, while Bharti Airtel down by 1.94%, Hero MotoCorp down by 1.37%, GAIL down by 1.37%, Coal India down by 1.35% and Jindal Steel down by 0.79% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up 1.90%, IT up 1.66%, Health Care up 1.38%, Power up 1.16% and TECk up 1.10%, while there was no loser on the sectoral space.

Meanwhile, the Reserve Bank of India (RBI) is expected to come out with the final guidelines for new bank licences much before the end of the fiscal. RBI deputy governor Anand Sinha said 'we are in the process of issuing the licence guidelines. The consultation process with the finance ministry is over; everything is settled now, and we will be issuing the guidelines. It will be much before the end of this financial year.’

As per Sinha, banks are very important for the financial sector and eligible corporates have to meet all the criteria of licensing draft guidelines to enter the banking space. However, Sinha refused to quantify the possible number of licences, saying that the central bank will be selective in this process. Currently, Indian banking industry consists of 26 public sector banks, 22 private sector banks and over 40 foreign banks.

The S&P CNX Nifty touched a high and a low of 5,947.55 and 5,883.15 respectively. 

The top gainers on the Nifty were ONGC up by 4.33%, DLF up by 3.70%, ACC up by 3.22%, Ranbaxy up by 2.99% and Ultra Tech Cement up by 2.58%.

The top losers of the index were Bharti Airtel down by 1.99%, GAIL down by 1.51%, Hero MotoCorp down by 1.50%, Coal India down by 1.37% and Jindal Steel down by 0.95%.

The European markets were trading in green, France’s CAC 40 up by 0.97%, United Kingdom’s FTSE 100 up by 0.37% and Germany’s DAX up by 0.82%.

Most Asian markets went home with red mark on Tuesday as Japan’s Nikkei closed lower due to an uptick in the yen. Chinese shares ended lower on worries that rising property prices will lead to fresh restrictions on the sector, while weakness in mainland China weighed on Hong Kong. Investors traded cautiously awaiting outcome of Italy’s election and about US budget talks limiting the upside after strong rallies in early February.