Post session - Quick review

The Indian equity markets extended the rally mood in the new week with the benchmarks surging by another 2 percent for the day. The cautious start of the markets after initial hiccups slowly strengthened and took a rally shape by the end. There was broad based buying with heavyweights taking the lead, the development in Europe put a soothing impact on the markets and helped them to move higher for the second consecutive day. During the weekend, Germany’s Angela Merkel along with French President Nicolas Sarkozy tried to calm the global community. At a joint press conference in Berlin, Sarkozy set a deadline of the Nov. 3 Group of 20 summit to deliver a response that addresses the immediate debt crisis in Greece, and what he called the structural defects in the 17-nation euro area. In the Asian markets the mood remained mixed, as the Chinese markets lost over half a percent after a week of holiday reports of slump in housing sale that led the apprehension that government won’t go for monetary easing.

Back home after making a flat start and after momentarily slipping into red the markets gathered strength to move higher. Initially the oil and gas counter took the lead with smart move in heavyweight Reliance Industries, other oil refiners like Cairn India and Essar Oil too moved higher, expecting a demand recovery with the positive development in Europe. With the anvil of festive season the consumer durable sectors too remained in lime light while the IT pack was in jubilant mood expecting a good performance in second quarter. However the markets gain got a spurt after the positive start of the major European markets as the leaders of Germany and France gave themselves three weeks to create a plan to recapitalize banks. The domestic markets took the news as a catalyst of growth and added gains, even the rate sensitive’s moved higher despite credit rating agency Crisil trimming their FY12 GDP growth forecast to 7.6% from 7.78% due to the weak global economic situation and it raised its inflation target to 9.1% from 8-8.5%. The broader indices though underperformed but they too showed good upmove, gaining over a percent. All the sectoral indices barring healthcare closed in green, while the telecom stocks kept buzzing ahead of the telecom policy, though it was announced almost at the market closing. All the major telecom stocks ended with gain of 2-3% As per the Draft Telecom Policy MTNL and BSNL will continue to enter into rural areas the ministry aims 100 percent teledensity by 2020, while the Spectrum availability is to increase under the New Telecom Policy, market-based pricing announced which will lead to more transparency as compared to the auction. Also Dual licensing has been announced one for service and one for network. However, one under the new policy, one clause can hit the telecom companies, of free roaming under new policy and one nation one service policy.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1703:1067 while 125 scrips remained unchanged.

The BSE Sensex gained 356.75 points or 2.20% and settled at 16,589.29. The index touched a high and a low of 16,589.29 and 16,230.77 respectively. 25 stocks advanced against 5 declining ones on the index (Provisional)

The BSE Mid-cap index gained 1.43% while Small-cap index was up by 1.00%. (Provisional)

On the BSE Sectoral front, Realty up 3.27%, Consumer Durables up 2.93%, IT up 2.92%, Oil & Gas up 2.84% and TECk up 2.74% were the top gainers while, Health Care down 0.06% was the only losers.

The top gainers on the Sensex were Tata Motors up 6.68%, Tata Power up 5.13%, Wipro up 4.82%, DLF up 4.67% and Bajaj Auto up 4.14%.

On the flip side, Maruti Suzuki down 4.05%, Sun Pharma down 1.31%, Jindal Steel down 1.15%, Cipla down 0.91% and L&T down 0.10% were the only loser on the index. (Provisional)

Meanwhile, according to the study conducted by the Ministry of Statistics and Programme Implementation, the infrastructure sectors, together with coal, fertilizer, natural gas, highways and railways, were not able to meet the set performance targets for April-July period this fiscal. In April-July period, the production of coal, fertilizers, natural gas, upgradation of highways, goods carried by railways, cargo handled by ports and airports lagged behind their targets.

However, power generation, crude oil and refinery production and passengers handled at international and domestic terminals surpassed their respective targets set for the April-July period this year. Adding further, production of natural gas, upgradation of highways, net addition switching capacity of telephone exchanges and net new wireless (cell) phone connections witnessed negative growth in April-July this fiscal over the actual achievement in the corresponding period in 2010.

In the four months, the overall coal production at 157.69 million tonnes was 4.3% lower than target for period but it was slightly higher at 0.6% than the output during April-July 2010. The overall production of fertilizers in April-July this year at 5.31 million tonnes was 5.4% lower than the target for the period, but reflected a growth of 0.6% over the actual output in the four months in 2010. Similarly, the gas production during April-July at 16,356 million cubic meters (MCM) was 2.6% lower than the target of 16,787 MCM and it was also 9.7% lower than the production during the corresponding period last year.

In April-July period this fiscal, 3,59,476 new telephone lines were added in the switching capacity of telephone exchanges across the country which was 91.7% lower than the actual attainment in the corresponding period. The overall new telephone connection (wireless and fixed) provided by the public and private sector in April-July this year at 462.32 lakh was 31.1% lower than new subscribers added in the corresponding period last year.

The overall goods carried by railways at 313.32 million tonnes in April-July period was 2.6% lower than the target of 321.81 million tonnes. However, it witnessed a growth of 7.1% over the attainment during the corresponding period last year. The major ports handled 193.01 million tonnes of cargo in April-July this year, which was 3.6% lower than the target for the period, but it witnessed a growth of 4.8% over the attainment in the corresponding four month in 2010.

The overall crude oil production in April-July this year at 12.86 million tonnes was 1.7% higher than the target of 12.64 million tonnes and it was also 7.3% higher than the actual producing in the corresponding period last year. Power generation also showed positive growth. During April-July electricity generation at 291.46 billion units was higher than the target for the four month period as well as actual output in the corresponding period last year by 3.6% and 9.4% respectively. Further, the refining output at 57.01 million tonnes in April-July period this year was 5.8% higher than the target of 53.88 million tonnes and confirmed a growth of 4.9% over the actual production in said period in 2010.

India VIX, a gauge for market’s short term expectation of volatility lost 9.05% at 30.03 from its previous close of 33.02 on Friday. (Provisional)

The S&P CNX Nifty gained 100.50 points or 2.06% to settle at 4,988.55. The index touched high and low of 4,991.15 and 4,882.05 respectively. 42 stocks advanced against 8 declining ones on the index. (Provisional)

The top gainer on the Nifty were, Tata Motors up 6.47%, Sesa Goa up 5.51%, Tata Power up 5.29%, DLF 4.84% and IDFC up 4.81%.

 On the other hand, Maruti Suzuki down 3.79%, Jindal Steel down 1.70%, Sun Pharma down 1.30%, Cipla down 0.98% and Siemens down 0.70% were the top losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 0.84%, Germany's DAX up 0.30% and FTSE 100 up 0.76%.