Benchmarks start-off new series in style; Sensex nears 20800

Extending their last session’s rally, stock markets in India displayed an awe-inspiring performance and bulls looked waiting for significant upside triggers to open fresh positions on first day of the new Futures and Options series. The frontline equity indices rallied by over a percentage point and settled near their important psychological 20,800 (Sensex) and 6,200 (Nifty) levels. Sentiments remained sanguine since start of the trade with investors hoping good Q2 Gross Domestic Product (GDP) data. Experts are estimating the Indian GDP to have expanded by about 4.5 percent in the July-September period on the back of rising exports and a good monsoon. Sentiments also remained up-beat after Planning Commission Deputy Chairman Montek Singh Ahluwalia said India can achieve 6% economic growth next fiscal and that the second half of this fiscal could be better than the first. He also added that India will become the third-biggest economy in the world by 2030.

Some support also came in from report of wide roll-overs to the December series. The market wide roll-over was 82.41% versus 80.45% previous month, highest in the last ten months. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks November 28, 2013. Foreign institutional investors (FIIs) bought shares worth net Rs 102.91 crore on Thursday, as per provisional data from the stock exchanges. Meanwhile, Domestic institutional investors (DIIs) bought shares worth a net Rs 330.51 crore on the same day.

Positive opening in European markets too supported the sentiments with CAC, DAX and FTSE all edging higher in early deals. Moreover, most of the Asian equity benchmarks ended the session in the green led by Hong Kong’s benchmarks which surged around half a percent after the country’s total retail sales in October, provisionally estimated at $37.8 billion, rose 6.3% year-on-year.

Back home, PSU banks witnessed some buying interest after the Committee on Economic Affairs cleared a proposal to allow state electricity boards of Jharkhand, Bihar and Andhra Pradesh to convert their outstanding loans till March 2013 into bonds as part of an amendment to the discom debt restructuring package. Shares of select auto companies remained on buyers’ radar ahead of their monthly sales volume data for November 2013, slated to be unveiled on December 1, 2013. Additionally, shares of power generation and power distribution companies rose, led by rally in Reliance Power which rose after commencing pre-commissioning activities for its concentrated solar power project in Rajasthan’s Jaisalmer district.

The NSE’s 50-share broadly followed index Nifty rose by over eighty points to end above its psychological 6,150 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and fifty points to end near the psychological 20,800 mark.

Broader markets too traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,460 shares on the gaining side against 1,033 shares on the losing side, while 179 shares remained unchanged.

Finally, the BSE Sensex surged by 257.02 points or 1.25%, to settle at 20791.93, while the CNX Nifty gained 84.25 points or 1.38% to settle at 6,176.10.

The BSE Sensex touched a high and a low of 20819.77 and 20558.93, respectively. The BSE Mid cap index was up by 0.83%, while the Small cap index gained 0.84%.

The top gainers on the Sensex were SSLT up 4.25%, BHEL up 3.65%, SBI up 3.64%, ICICI Bank up 3.01%, and Cipla up 2.61%, on the flip side Mahindra & Mahindra down 1.17%, Hero MotoCorp down 0.89%, Wipro down 0.50%, NTPC down 0.24%, and Tata Steel down 0.15%, were the only losers on the index.

On the BSE Sectoral front, Bankex up by 2.21%, PSU up by 1.88%, Capital Goods up by 1.79%, Metal up by 1.76%, and Realty down by 1.51%, were the top gainers, while, were no losers on the sectoral front.

Meanwhile, The Cabinet Committee on Economic Affairs (CCEA) has approved amendments in financial restructuring scheme of State power distribution companies in Jharkhand, Bihar and Andhra Pradesh, which are facing financial difficulties. Meanwhile, the scheme is already implemented in various states include Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana and Himachal Pradesh.

Power utilities of Bihar, Jharkhand and Andhra Pradesh were interested to participate in the scheme, but could not do so because of their unavailability in meeting certain requirements of the restructuring scheme. Meanwhile, in order to enable these three states power companies to participate in the scheme for issuance of bonds/reschedulement by lenders, the government has extended the cut-off date for reckoning the eligible amount of short-term liabilities to March 31, 2013 from March 31, 2012. The scheme will be available to these states up to 31 December 2013.

Earlier, in September, the power ministry has also moved a draft note to CCEA with a proposal of about Rs 11,000 crore payout to subsidise costlier power. India's total installed power generation capacity is 225,793 MW, of which 18,714 MW or nearly 8 percent, is gas-based.

Under the new approved pricing formula, the gas prices will increase to $8.40 per million British thermal unit from the current price at $ 4.20 per mbtu, leading to cost of electricity generation of Rs 10.47 per unit. The power ministry has argued that consumers cannot absorb such a high cost of electricity and so the government should subsidise any cost over and above Rs 5.50 per unit to power utilities.

The CNX Nifty touched a high and low of 6,182.50 and 6,103.80 respectively.

The top gainers on the Nifty were Jaiprakash Associates up by 9.20%, NMDC up by 6.67%, Bank of Baroda up by 5.17%, SSLT up by 4.57%, and BHEL up by 3.78%, On the other hand, Mahindra & Mahindra down by 1.34%, Hero MotoCorp down by 0.69%, Wipro down by 0.54%, NTPC down by 0.27%, and Asian Paints down by 0.18%, were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.12%, Germany's DAX was up by 0.05%, and United Kingdom's FTSE 100 was up by 0.30%.

The Asian markets concluded Friday’s trade mostly in green while profit-taking pulled Japanese shares down from a near six-year high hit in the prior session. Japan’s core consumer price index rose 0.9% in October from a year earlier, an acceleration in the pace of price growth from the previous month and a sign that Japan is on its way to shaking off 15 years of deflation. The 0.9% rise was the fastest pace of growth in the index since November 2008. Japanese industrial production rose 0.5% in October from the previous month marking the second straight month of expansion. Japanese Housing Starts fell to a seasonally adjusted 7.1%, from 19.4% in the preceding quarter.

In Hong Kong, the value of total retail sales in October, provisionally estimated at $37.8 billion, rose 6.3% year-on-year. After netting out the effect of price changes over the same period, the total retail sales volume grew 5.8%. The revised estimate of the total retail sales value in September increased 5% over a year earlier, while the total retail sales volume rose 4.9%. For the first 10 months of the year, total retail sales grew 11.9% in value and 11.3% in volume over a year earlier. Thailand’s trade balance fell to a seasonally adjusted 0.34B, from 2.56B in the preceding month.