Post Session: Quick Review

Indian frontline equity indices took a quantum leap on Thursday by fervently rallying close to three and half a percent to re-conquer the psychological 6100 (Nifty) and 20,500 (Sensex) levels, thanks to Fed’s status quo stance in its Quantitative Easing programme. The stellar performance staged by the markets not only propped up the Nifty close to three percentage points but also underpinned the index to log the biggest single intra-day gains since May 2009 in absolute terms, while Sensex scaled a level last seen in November,2010. There appeared not even an iota of profit booking in the session as enthusiastic investors went on hectic buying spree. Across the board buying was evident in the session with the banking counter being one of the prominent gainers, ahead of RBI’s mid-quarterly policy review to be announced by new governor Raghuram Rajan on September 20. Financials rallied after the Fed decision to stick to its bond purchase programme fuelled hopes of RBI reversing some of its cash tightening steps. The pivotal added to the gains on expectations that India’s Apex Bank would reduce the Marginal Standing Facility (MSF) rate, currently at 10.25% by 100 bps, with few market-participants also not ruling out the chances of India’s Apex Bank lowering the daily average CRR requirements and easing repo rate. Further hopes of increased capital inflows after the US Federal Reserve's decision to keep its stimulus programme intact, shored currency to sub 62/$ levels, bolstering sentiment.

On the global front, Asian and European shares flew higher after the Federal Reserve stunned markets by choosing not to taper its asset-buying programme for now. Investors across the global celebrated the prospect of prolonged stimulus in the world's largest economy. The chance that US interest rates could stay low for longer, which was further enhanced by news from the White House that noted- Janet Yellen was the front-runner to take over the Fed, when Ben Bernanke steps down in January, fortified sentiment.

Earlier on Dalal Street, the benchmark got off to a gap-up start in tandem with the optimistic sentiments prevailing in Asian markets on Fed’s stance. The frontline indices gathered momentum and extended the last session’s northbound journey with great conviction. There appeared absolutely no resistance throughout the session, as the indices kept conquering one psychological level after another. The indices surged from strength to strength and the journey halted only with the end of session around the highest point of the day. Eventually, the NSE’s 50-share broadly followed index - Nifty went for a triple digit rally to close above the crucial 6100 levels, while Bombay Stock Exchange’s sensitive Index - Sensex garnered massive gains of over six hundred points and closed above the psychological 20,500 mark. Moreover, the broader markets too fervently rallied to settle with huge gains of around 1.5-2%, though they underperformed their larger peers. On the BSE sectoral space, banking sector shored and remained the top gainer in the space with close to seven percent gains followed by the Realty and Capital Goods index, which ended with over four percent gains. However, stocks from IT counter turned out the only dark spot in the shinning trade. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1425: 999, while 159 scrips remained unchanged. (Provisional)

The BSE Sensex gained 663.39 points or 3.32% to settle at 20625.55.The index touched a high and a low of 20739.69 and 20347.30 respectively. Among the 30-share Sensex, 27 stocks gained, while 2 stocks declined and one remained unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 2.22% and 1.15% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 6.81%, Realty up by 5.32%, Capital Goods up by 4.71%, Metal up by 3.62% and PSU up by 3.60% were the top gainers, while IT down by 0.42%was the only loser in the space. (Provisional)

The top gainers on the Sensex were SBI up by 8.32%, Tata Steel up by 7.17%, Tata Power up by 6.48%, ICICI Bank up by 6.36% and L&T up by 6.25%, while, Wipro down by 2.14%, Gail India down by 0.43% and Infosys down by 0.15% were the only losers in the index. (Provisional)

Meanwhile, the government is likely to allow foreign direct investment (FDI) in the railways sector, which is facing a cash crunch, in order to develop rail lines between project sites and existing network. The move will help in attracting more FDI besides helping in the development of infrastructure for industrial purposes.

The Department of Industrial Policy and Promotion (DIPP) has proposed to permit 100 percent FDI under automatic route that will construct and maintain rail lines connecting ports, mines and industrial hubs with the existing rail network. It will be first-to-last mile connectivity between ports, coal mines to the existing railway freight stations and will smooth the movement of raw materials from mines to ports, it added. The DIPP has completed consultations with the concerned ministries on the proposal and will soon seek Cabinet nod for the proposal.

Presently, Indian industrial development and exports have been suffering due to poor infrastructure, which hampers output and raises the cost of production. Indian railways can play an important role in providing a reliable transport facility necessary for promoting industrial growth in the country. The move will provide adequate funds to the railway ministry, whose effort towards attracting funds through public-private partnership for infrastructure projects have failed. Further, railway ministry expects Rs 25,000 loss in the passenger segment for this year.

India VIX, a gauge for markets short term expectation of volatility lost 3.19% at 24.50 from its previous close of 27.69 on Wednesday. (Provisional)

The CNX Nifty gained 208.40 points or 3.53% to settle at 6,107.85. The index touched high and low of 6,142.50 and 6,040.15 respectively. Out of the 50 stocks on the Nifty, 47 ended in the green, while 3 ended in the red.

The major gainers of the Nifty were PNB up 9.20%, Bank of Baroda up by 9.12%, JP Associate up by 8.86%, Kotak Bank up by 8.08% and SBI up by 8.05%. The key losers were HCL Tech down by 0.66%, Infosys down by 0.24% and Coal India down by 0.13%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 1.11%, Germany’s DAX up by 1.15% and the United Kingdom’s FTSE 100 up by 1.45%.

All the Asian markets concluded Thursday’s trade in green after the Federal Reserve’s surprise move to leave its stimulus measures intact. Indonesian equities surged in early trade, though the advance was later pared, while the Philippines added 2.9% and Hong Kong’s Hang Seng too ended the trade in green. South Korean markets are closed from September 18 for the rest of the week for the Chuseok holidays. Trade will resume on September 23. Shanghai Composite and Taiwan Weighted remained closed on account of Mid-autumn Festival. Annual profit growth of China’s state firms gathered speed in the first eight months of 2013 reinforcing views that the world’s second-largest economy is regaining some traction. The state-owned non-financial companies made combined profits of 1.5 trillion yuan ($245.04 billion) for January-August, up 9.7 percent from the same period a year ago, the Ministry of Finance stated.

Japanese exports put in their best performance in three years but were not enough to prevent a record August trade deficit hit by soaring energy costs. The monthly deficit of 960.3 billion yen was well up from 768.4 billion yen a year earlier, marking the worst-ever August deficit and extending a string of shortfalls to 14 months -- tying the previous record set more than three decades ago. But the cheaper yen also pushed up Japan’s exports, with the value of shipments rising 14.7 percent, helped by strong demand for vehicles. The trade data released showed that the value of shipments to the key US market jumped 20.6 percent from a year earlier, while exports to the troubled euro zone were up 18 percent. The exports to China rose 15.8 percent despite a rumbling territorial dispute between Tokyo and Beijing that flared anew last year, denting trade ties. Separately, Japan’s All industries activity index rose more-than-expected last month. The Japanese Ministry of Economy, Trade and Industry stated that Japan’s All Industries Activity Index rose to a seasonally adjusted 0.5%, from -0.6% in the preceding month.