Post Session: Quick Review

Celebrating the victory of main opposition party, BJP, in state assembly elections, Indian equity markets putting up a good show, puffed up gains of over one and half percent and hit record high levels in intra-day trades on Monday. After trading from strength to strength in early deals, the benchmarks cooled off from day’s high level in afternoon deals as select investors preferred cashing profits at record high level, which led to Sensex settling shy of the crucial 21,300 level, while Nifty, after scaling past the 6400 level in the intra-day trade, finished above the crucial 6,350 level. Meanwhile, broader indices underperforming the larger peers, eked out gains of over quarter of a percent. Besides, politics, positive regional counterparts, also supported the upward momentum of the bourses.

On the global front, Asian stock markets were mostly higher on Monday as pace of U.S. economic recovery offset concerns that the Federal Reserve may reduce its monetary stimulus this month. The U.S. on Friday reported a fourth straight month of job gains, with 203,000 new jobs created in November. The unemployment rate fell to 7.0 percent from 7.3 percent. The strengthening job market encouraged investors to buy equities on the improving economy instead of worrying about a possible reduction in the Fed's stimulus at its Dec. Meanwhile, continued prospects for aggressive monetary easing by the Bank of Japan, also bolstered the sentiment for Asian counterparts. On the flip side, European shares were trading mixed at this point of time as concerns over the withdrawal of the U.S. Federal Reserve's stimulus prevented investors from making big bets on the market.

Closer home, amidst across the board buying activity, only stocks from Consumer Durable pivotal were the sole losers on the BSE, while those from Realty, Capital Goods and Banking counters were the top gainers of the session. Public sector Oil Marketing Companies stocks, HPCL and IOC, also rallied on Rupee’s appreciation. On the currency front, Rupee, after scaling four months high level of 60.90, was now trading above the 61.05, still way higher than its previous close of 61.44 on Friday. Additionally, Cement stocks rose on renewed buying, Jaiprakash Associates UltraTech Cement, Ambuja Cements, ACC were up in the range of 2-4%. However, select sugar stocks, Bajaj Hindusthan, Dwarikesh Sugar and Dhampur Sugar Mills which were in demand for second consecutive session after PM's panel recommends Rs 7,500 -crore interest-free loans to bailout sugar, too succumbed to profit- booking by the end of the trade . The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1194: 1317, while 178 scrips remained unchanged. (Provisional)

The BSE Sensex gained 297.81 points or 1.42% to settle at 21294.34.The index touched a high and a low of 21483.74 and 21282.64 respectively. Among the 30-share Sensex, 25 stocks gained, while 5 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.41% and 0.32% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 2.72%, Capital Goods up by 2.60%, Bankex up by 2.55%, Oil & Gas up by 1.70% and PSU up by 1.65% were the top gainers, while Consumer Durables down by 0.05% was the only loser in the space. (Provisional)

The top gainers on the Sensex were SSLT up by 4.93%, ICICI Bank up by 4.68%, Maruti Suzuki up by 4.02%, L&T up by 3.69% and ONGC up by 3.45%, while, Jindal Steel down by 5.84%, Cipla down by 0.80%, Tata Steel down by 0.59%, Hindustan Unilever down by 0.20% and BHEL down by 0.06% were the only losers in the index. (Provisional)

Meanwhile, the Ministry for Micro, Small and Medium Enterprises (MSMEs) will organize a meeting with the heads of the public sector banks soon in order to encourage them to lend to MSME sector under the Pradhan Mantri Employment Generation Programme (PMEGP).

Union Minister of State for Small and Medium Enterprises, K.H. Muniappa has said that presently, banks are cautious for lending under the scheme in some areas of MSMEs, therefore, the meeting will organize to learn about their problems and sort them out. The Government would stand guarantor for a significant portion of the loans and provide matching subsidies under scheme, Minister added. On the other hand, banks had reported that many MSMEs loans had turned bad as the subsidies were credited to the loan account holders’ account.

Under the PMEGP scheme, which has formed by merging the existing employment generation programmes - Rural Employment Generation Programme and Pradhan Mantri Rozgar Yojana loans are given without any collateral. Through the scheme, the government has planned to reach out to 1 lakh entrepreneurs in 650 districts across the country during 2013-14 and also aims to train 40 lakh people through the primary technical training centres during the 12th Plan period.

The MSME sector contributes around 8% of the country's GDP, 45% of the manufactured output and provides employment to over 8 crore persons engaged in over 3.6 crore units. Meanwhile, the government has been taking steps to boost the sector’s growth. In the 12th Five-Year Plan, the government has increased Budget allocation for the sector to Rs 24,000 crore from Rs 11,000 crore in the previous five-plan period.

India VIX, a gauge for markets short term expectation of volatility lost 13.73% at 19.16 from its previous close of 22.21 on Wednesday. (Provisional)

The CNX Nifty gained 90.15 points or 1.44% to settle at 6,350.05. The index touched high and low of 6,415.25 and 6,345.00 respectively. Out of the 50 stocks on the Nifty, 40 ended in the green, while 9 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were DLF up 6.07%, SSLT up by 5.02%, ACC up by 4.95%, Ambuja Cements up by 4.57% and ICICI Bank up by 4.45%. The key losers were Jindal Steel down by 6.17%, Cipla down by 0.84%, Lupin down by 0.72%, Tata Steel down by 0.62% and Cairn down by 0.46%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.22% and the United Kingdom’s FTSE 100 down by 0.05%, while Germany’s DAX up by 0.36%.

The Asian markets barring Straits Times concluded Monday’s trade in green after strong economic data from the Asia’s largest economy helped sentiment. China posted its biggest trade surplus in almost five years, as soaring exports ran ahead of modest import growth, potentially resurrecting a source of friction with the US. In November, China’s trade surplus rose to $33.8 billion from $31.1 billion the month before. China’s consumer-price inflation slowed slightly in November on an annual basis, coming in just below expectations, while wholesale-price deflation also eased slightly. The consumer price index rose 3% from a year earlier, while slipping 0.1% compared to October, according to reported data from the National Bureau of Statistics.

Japan unexpectedly swung into a current account deficit in October as its massive goods and services trade deficit eradicated the benefits of solid income from overseas investment. The 127.9 billion yen deficit in the current account, the broadest measure of Japan’s trade with the rest of the world, was much worse than the 420.8 billion yen surplus than the country registered a year earlier.