Post Session: Quick Review

Local equity markets showed a spirited performance on Monday, wherein bulls remained in-charge for the entire session, underpinned by the prospect of extended stimulus in the United States after US Federal Reserve chairman nominee Janet Yellen on Friday said that she would continue the current stimulus. Although the rally at Dalal Street was broad-based in nature, it was led by banking shares which garnered maximum buying interest, leading the Bank Nifty log its biggest gains in percentage terms since October 29.  Additionally, spectacular gains of index-heavyweights, viz, ITC, Reliance Industries, HDFC Bank, ICICI Bank and L&T, also contributed to the secular up-move of the bourses. Thus in day’s trading session, while Sensex recouping 60% of losses made last week in two consecutive trading sessions and logging its best percentage gains since October 18, ended above 20,850 level, Nifty too soaring to a week’s high level, ended just shy of psychological 6,200 mark. Meanwhile, broader indices also gaining traction added gains of close to a percent.

On the global front, real economic reform in China boosted Asian shares on Monday. Late on Friday, China unveiled bold reform plans from its Third Plenum, including easing the one-child policy, implementing residence registration reforms, allowing market pricing of key resources and further financial liberalization. Meanwhile, European shares were treading water with investors pausing for a breather after six straight weeks of gains and waiting for fresh catalysts to push the market back towards recent five-year highs. Investors’ focus now will be on German sentiment data on Tuesday and the minutes from the Federal Reserve's October policy meeting on Wednesday for hints about the US central bank's likely timing to move to start trimming stimulus.

Closer home, local equity markers resumed trade after a long weekend with vigor, on the back of optimistic regional counterparts and strong domestic cues. Besides positive global set-up, Rupee appreciated to week’s high level to trade below the crucial ‘62.50/$’ level on the back of bounced up inflows and continued dollar sales. Sectorally, while there were no losses, stocks from Capital Goods and Fast Moving Consumer Goods pivotals, besides banking also hogged limelight. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1408: 1055, while 123 scrips remained unchanged. (Provisional)

The BSE Sensex gained 454.99 points or 2.23% to settle at 20854.41.The index touched a high and a low of 20863.01 and 20570.59 respectively. Among the 30-share Sensex, 26 stocks gained, while 4 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.19% and 0.97% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 3.33%, Bankex up by 3.11%, FMCG up by 2.42%, Realty up by 2.35% and Oil & Gas up by 2.33% were the top gainers, while there were no losers. (Provisional)

The top gainers on the Sensex were L&T up by 4.16%, HDFC Bank up by 3.78%, ITC up by 3.72%, Hindalco Industries up by 3.56% and ONGC up by 3.44%, while, SSLT down by 1.67%, Coal India down by 1.04%, Cipla down by 0.52% and Bajaj Auto down by 0.37% were the only losers in the index. (Provisional)

Meanwhile, concerned over the rising bad assets of Indian public sector banks (PSBs), Reserve Bank of India (RBI) deputy governor KC Chakrabarty blames poor credit appraisal of the public sector banks. Underscoring the need for making senior management more accountable, who clear large loan proposals, Chakrabarty said complacency in credit management process during the good times since 2006-07 has started putting stress on the books of PSBs. He further added, bank managements wrongly blame the global financial meltdown for high NPAs. Net NPAs of the 26 public sector banks grew by 2.02 percent during the FY13 as compared to 1.53 in the previous fiscal.

In the last three years, state-run banks alone, reported frauds of over Rs 16,690 crore. Chakrabarty added that undeserving companies, having record of NPAs, have also received loans from banks. During the last 13 years since 2001, these banks have added over Rs 6 lakh crore in NPAs and have shown over Rs 4 lakh crore in reduction of which majority of reduction is driven by the write-offs (Rs 1 lakh crore) than the actual recoveries. Asking the banks to rely more on available credit information, the RBI deputy governor has said that wrong project appraisal is leading to diversions, over- leverage, fraud and NPAs, therefore, bankers should be diligent in the loan appraisal processes.

Chakrabarty also lashed out against the practice of restructuring, which is being used as a tool of NPA management by the banks and said that the moment when the loan is restructured, it should be declared as NPA. Banking industry is the most dominant segment of the financial sector and plays an important role in the economic development of the country. Banks encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.India VIX, a gauge for markets short term expectation of volatility lost 2.28% at 18.82 from its previous close of 19.26 on Thursday. (Provisional)

The CNX Nifty gained 140.00 points or 2.31% to settle at 6,196.15. The index touched high and low of 6,196.80 and 6,110.40 respectively. Out of the 50 stocks on the Nifty, 44 ended in the green, while 6 ended in the red.

The major gainers of the Nifty were JP Associate up 6.83%, L&T up by 4.31%, HDFC Bank up by 4.24%, ITC up by 3.83% and Axis Bank up by 3.73%, while the key losers were SSLT down by 1.55%, Coal India down by 1.37%, NMDC down by 0.49%, Bajaj-Auto down by 0.38% and Lupin down by 0.35%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.10% and Germany’s DAX up by 0.01%, while the United Kingdom’s FTSE 100 down by 0.04%.

India VIX, a gauge for markets short term expectation of volatility lost 2.28% at 18.82  from its previous close of 19.26 on Thursday. (Provisional)

The CNX Nifty gained 140.00 points or 2.31% to settle at 6,196.15. The index touched high and low of 6,196.80 and 6,110.40 respectively. Out of the 50 stocks on the Nifty, 44 ended in the green, while 6 ended in the red.

The major gainers of the Nifty were JP Associate up 6.83%, L&T up by 4.31%, HDFC Bank up by 4.24%, ITC up by 3.83% and Axis Bank up by 3.73%, while the key losers were SSLT down by 1.55%, Coal India down by 1.37%, NMDC down by 0.49%, Bajaj-Auto down by 0.38% and Lupin down by 0.35%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.10% and Germany’s DAX up by 0.01%, while the United Kingdom’s FTSE 100 down by 0.04%.

The Asian markets barring Nikkei 225 concluded Monday’s trade in green after China published a broad outline for economic reform. Chinese markets had their first opportunity to react to a reform plan that was released by Beijing late Friday. Beijing’s announcement outlined a broad restructuring of the economy, saying that the government would open the financial sector and relax restrictions on investment. In addition, the government pledged to improve the country’s initial-public-offering system, adopting a more market-oriented approach to where companies can list according on their merits. Average prices of new homes in 70 Chinese cities in October rose to another fresh high, as demand for homes remains strong. For the ninth consecutive month, growth in median home prices rose in October from year-ago levels, data released by the National Bureau of Statistics showed, after a turnaround that began in January. Prices were up in 69 of the 70 cities in October, unchanged from the 69 in September.

Thailand’s gross domestic product fell unexpectedly last month to a seasonally adjusted 2.7%, from 2.8% in the preceding month. The unemployment rate in Hong Kong remained unchanged last month. The Census and statistics department stated that Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3%, from 3.3% in the preceding month. Debt ratings agency Fitch affirmed Indonesia’s debt rating as investment grade, expecting the country’s economy expansion to slow next year as it struggles to narrow the current-account deficit. Fitch maintained Indonesia’s BBB- rating, or the lowest investment grade level. The rating has a stable outlook, which means a sudden downgrade or upgrade is unlikely in the next two years