Post Session: Quick Review

Giving thumbs up to the global rally, Indian equity markets too put up splendid show after Federal Reserve Chairman Ben Bernanke said on Wednesday that the US central bank will continue to pursue an accommodative monetary policy for now, as inflation remains low and the employment rate may be overstating the health of the labor market, which led to across-the globe buying. The session at D-street turned out to be far more magnificent than expected, whereby bourses after making a gap-up opening went on the gaining spree and concluded with gains of over one and half percent. Benchmark indexes, Sensex and Nifty, registering triple digit gains, ended past the crucial 19,650 and 5,900 psychological levels respectively. However, they faced stiff resistance near 19,700 (Sensex) and 5950 (Nifty) respectively.

The rally at D-street, partly on account of Rupee’s recovery, spoke volume about investors’ confidence ahead of the crucial day, marked by release of IIP data and Infosys Q1FY14 earnings. Rupee, which recovered substantially from the perilous 60 per dollar level on easing worries about selling by foreign investors following dovish comments of Bernanke, provided impetus to equity markets.

Meanwhile, on the global front, although world shares rallied after US Fed chief Ben Bernanke said that its stimulus drive would be kept in place “for the foreseeable future”, but Tokyo’s advance was capped as the yen surged against the dollar. Stock gains were held back as the greenback, which tumbled below the 100 yen level late Wednesday, fell further on Thursday after the Bank of Japan held off any more stimulus measures.

Closer home, amidst across the board buying, stocks from high beta Metal and rate sensitive- Realty and Banking counters gained the most, stocks from Consumer Durables counters were the only olsers. Banking shares gained on expectations of mark-to-market gains following a decline in bond yields. A rise in bond prices, which move inversely to yields, boosted the value of bond holdings of banks. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1358: 973, while 148 scrips remained unchanged. (Provisional)

The BSE Sensex gained 375.35 points or 1.95% to settle at 19669.47.The index touched a high and a low of 19723.51 and 19468.46 respectively.  The BSE Mid cap and Small cap indices ended higher by 0.73% and 0.63% respectively. (Provisional) 

On the BSE Sectoral front, Metal up by 2.96%, Realty up by 2.40%, Bankex up by 2.30%, Oil & Gas up by 1.91% and Capital Goods up by 1.80% were the top gainers, while Consumer Durables down by 0.61% was the only losers in the space. (Provisional)

Out of the 30 stocks on the Sensex, 26 stocks settled higher, while 4 stocks settled lower. The top gainers on the Sensex were Sterlite Industries up by 5.14%, Hindalco Industries up by 4.64%, Bharti Airtel up by 3.27%, Coal India up by 3.21% and TCS up by 3.17%. On the flip side,  Maruti Suzuki down by 2.90%, Wipro down by 0.55%, Tata Motors was down by 0.11% and Cipla was down by 0.05% were the top losers on the Sensex. (Provisional)

Meanwhile, in a move to boost the foreign investment into the country, Finance Minister P Chidambaram has defended Indian policies as growth oriented and urged the leaders of the US corporate sector to make substantial investments in India. Chidambaram, who is on a four-day US visit to attend the annual leadership summit of US-India Business Council, expressed the need for US companies to set up local manufacturing bases in India, saying that it is in the mutual interest of both countries for India to become a large manufacturing economy.

Finance Minister stressed that India is committed to ensure a transparent, fair and non-discriminatory investment environment for foreign investors seeking to do business in India. By adding further, Chidambaram said that steps are being taken to implement the recommendations regarding the transfer pricing and the Comprehensive Immigration Bill, which were recently passed by the US Senate. Finance Minister also emphasized Indian concerns about the provisions in the Comprehensive Immigration Reform Bill relating to skilled non-immigrant visas.

Chidambaram visit to the US came at a time when there is an increasing disappointment with Indian policies. The US lawmakers have written to Secretary of State, John Kerry and US President, Barack Obama, expressing their concerns over the Indian policies. They alleged Indian policies discriminatory, which do not provide a level playing field to the US companies.

Meanwhile, the foreign direct investment (FDI) inflows for the fiscal 2012-13 recorded a decline of 38% to $22.42 billion compared to the $35.12 billion inflow in the previous year. Foreign investment is crucial for economic development of a country and to attract foreign investment into the country, the government has been liberalizing the foreign investment policy. Finance Minister had earlier visited several major financial markets like Germany, Canada, Singapore, Hong Kong, and the UK to sell India’s growth story.India VIX, a gauge for markets short term expectation of volatility lost 5.45% at 18.89 from its previous close of 18.98 on Wednesday. (Provisional)

The CNX Nifty gained 113.50 points or 1.95% to settle at 5,930.20. The index touched high and low of 5,948.85 and 5,887.95 respectively. Out of the 50 stocks on the Nifty, 47 ended in the green, while 3 ended in the red.

The major gainers were Sesa Goa up 6.25%, Hindalco Industries up by 4.43%, Bharti Airtel up by 3.43%, Kotak Bank up by 3.26% and IndusInd Bank up by 3.24%. The key losers were Maruti Suzuki down by 2.84%, Ranbaxy Laboratories down by 1.10% and Tata Motors down by 0.30%.(Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.68%, Germany’s DAX up by 1.03% and the United Kingdom’s FTSE 100 up by 0.72%.

Asian markets concluded the Thursday’s trade on firm note after US Federal Reserve Chairman Ben Bernanke reiterated the need for accommodative policy. China’s Shanghai Composite gained the most in nearly seven month on Fed moves and on expectations that the country's central government may take measures to stimulate the economy. The market rallied amid talks that the central government may introduce mild stimulus measures to revitalize the economy after China posted surprise falls in both exports and imports yesterday. On the economy front, Confidence of China businesses fell to a seven year low in the second quarter of this year against improved sentiment in major developed countries. An index measuring business optimism on China’s mainland dropped to 4% in the second quarter from 25% in the first quarter, according to Grant Thornton, a global auditing firm.

Japan’s Nikkei closed in positive territory as investors waited for the outcome of Bank of Japan’s policy meeting. The Bank of Japan is widely expected to hold monetary policy steady at the conclusion of its regular two-day meeting and could hike its view of the economy. Besides, Japan’s core machinery orders rose 10.5% in May from the previous month, beating median estimate of a 1.3% gain. Jakarta Composite too concluded the trade in positive turf on Fed minutes. Indonesia Central Bank surprised the market by hiking its benchmark policy rate by 50 basis points, twice as much as expected, to 6.50% as it stepped up its battle to stem outflows and combat inflation. The central bank also raised the overnight deposit facility rate, known as FASBI, by 50 basis points to 4.75%.

Meanwhile, the International Monetary Fund predicted that economic growth in Indonesia and across Southeast Asia will slow as central banks tighten monetary policies and the United States scales back its stimulus program. Average 2013 economic growth for five countries in Southeast Asia - Indonesia, Malaysia, the Philippines, Thailand, and Vietnam - is forecast at 5.6% this year, down from an April estimate of 5.9%.