Post Session: Quick Review

In an unprecedented pullback rally after previous session’s sharp correction, Indian equity market put up a heartwarming performance on the last trading session of the week as investors adjusted their position ahead of the holiday truncated F&O expiry week. Catching up with the global rally a day after Fed announced gradual and conditional taper, barometer gauges, gaining close to two percent for the week as well as for the session, ended past the crucial 21,000 and 6,250 levels respectively. The secular up-move of markets was mainly due to across the board buying activities, wherein broader indices showing equal amount of participation, ended the session with gains of over a percent and half. Additionally, mostly positive global set-up, also buttressed the sentiment.

On the global front, Asian pacific shares ended mixed as investors reassessed the impact of the Federal Reserve's decision to taper its stimulus program on interest rates and capital flows. While China's Shanghai Composite tumbled as Chinese benchmark money market rates remained elevated near six-month highs despite the People's Bank of China injecting cash into the financial system using short-term liquidity operations, Japanese shares ended a choppy session marginally higher after Bank of Japan left its target for monetary base expansion unchanged at an annual pace of JPY 60-70 trillion and reiterated that the economy is recovering moderately. On the flip side, European shares steadied on Friday, consolidating at the end of their best week in eight months.

Closer home, barometer gauges after getting a gap-up start, went on adding gains and ended the session near day’s high point. Although, the rally was broad-based, but was led by Oil & Gas sector, which logged its biggest gains since August 22, mainly on account of sharp gains of Reliance Industries (RIL) after CCEA allowed the company to sell KG-D6 block gas at a higher price with effect from April 2014. Meanwhile, Information Technology stocks yet again put up a good show on Rupee depreciation for fourth consecutive session. Besides, fertilizer stocks RCF, Coromandel International, National Fertiliser and Zuari Agro, too gained momentum on CCEA’s decision of revising the prices of natural gas, which is an input to manufacturing fertiliser and electricity generation, every quarter based on the average of the past four quarters, but with a gap of one quarter. On the flip side, stocks from Consumer Durable pivotal emerged as the only loser on BSE. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1521: 987, while 163 scrips remained unchanged. (Provisional)

The BSE Sensex gained 394.52 points or 1.91% to settle at 21103.14.The index touched a high and a low of 21117.99 and 20745.94 respectively. Among the 30-share Sensex, 27 stocks gained, while 2 stocks declined and one stock remains unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.68% and 1.28% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 3.89%, Realty up by 2.58%, PSU up by 2.03%, IT up by 1.94% and Auto up by 1.93% were the top gainers, while Consumer Durables down by 1.43% was the only loser in the space. (Provisional)

The top gainers on the Sensex were RIL up by 4.53%, ONGC up by 4.17%, Wipro up by 3.98%, Mahindra & Mahindra up by 3.74% and HDFC up by 3.32%, while, Sun Pharma down by 0.78% and  SSLT down by 0.76% were the only losers in the index. (Provisional)

Meanwhile, in a move to enhance the capital inflows into the country, the Securities and Exchange Board of India (SEBI) has allowed the overseas entities to use complex multi-fund structures such as multi-class share vehicle (MCV) or protected cell companies (PCCs) in order to invest in India. SEBI has noted that overseas entities can use complex multi-fund structures, if they want such models owing to the regulations in their home country and are ready to provide details of actual beneficiary of funds.

The market regulator has taken the initiative to relax the rules after representations made by the investors that necessary safeguards can be put in place against any abuse of such structures. SEBI in its circular highlighted that an FII seeking registration in India with MCV and PCCs structures would not be considered to have an 'opaque' structure if it is required by its regulator. This would be subject to certain conditions, including entities being regulated by their home jurisdiction, each fund/sub-fund of the entity satisfying broad based criteria and the entity should provide information regarding its beneficial owners as and when sought by SEBI.

Amid rising fears over the possible round-tripping or money laundering activities, SEBI, in 2010, had prohibited foreign entities using complex structures like PCCs and MTV. PCCs designed entities might comprise of various cells, having funds of various investors, in such a manner that there is legal segregation and protection of assets and liabilities for each cell.

India VIX, a gauge for markets short term expectation of volatility lost 3.67% at 15.97 from its previous close of 16.58 on Thursday. (Provisional)

The CNX Nifty gained 109.25 points or 1.77% to settle at 6,275.90. The index touched high and low of 6,280.55 and 6,170.35 respectively. Out of the 50 stocks on the Nifty, 45 ended in the green, while 5 ended in the red.

The major gainers of the Nifty were Reliance Industries up 4.82%, ONGC up by 4.13%, Wipro up by 3.63%, Cairn up by 3.53% and HDFC up by 3.52%. The key losers were SSLT down by 1.32%, Grasim down by 0.58%, Sun Pharmaceuticals down by 0.57%, Jindal Steel down by 0.38% and Larsen & Toubro down by 0.03%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.20%, the United Kingdom’s FTSE 100 up by 0.39% and Germany’s DAX up by 0.58%.

The Asian markets concluded Friday’s trade on a mixed note with Chinese stocks closing in red as local money market rates hit six-month high. The Shanghai Composite dropped as the benchmark seven-day repurchase agreement rate hit 7.8%. Money-market rates have climbed sharply in recent days, and continued to rise even after the People’s Bank of China stated that it undertook short-term liquidity operations to offer an appropriate amount of funds to the money market. The Indonesian banking index fell after central bank stated that it plans to increase banking capital reserves. Bank Indonesia stated that Indonesian banks need to boost their core capital to 6 percent of risk-weighted assets from 5 percent so that they are more resilient should there be a financial crisis.

The Bank of Japan kept its asset-purchase levels and overall monetary policy unchanged, a widely expected move that did little to move currencies. The BOJ will keep money market operations so that the monetary base increases at an annual pace of about Y60 to Y70 trillion. The central bank’s statement also retained previous language on the economic outlook, saying the nation’s economy has been recovering moderately, while inflation expectations appear to be rising on the whole. The BOJ expects the year-on-year rate of increase in consumer prices to rise for the time being toward its 2015 goal of a stable 2% inflation rate.