Post Session: Quick Review

Expiry session of December series futures and options (F&O) contract ended on a flat note, however, volatility that entered in the last leg of trade, took the markets higher by two tens of percent, below the crucial 21,100 (Sensex) and 6,300 (Nifty) psychological levels. Largely, it remained another session of consolidation as investors preferred to be on the fence, in order to avoid the volatility witnessed on account of final F&O expiry session. Nevertheless, the session clearly belonged to broader indices that outperformed larger peers and went home with gains of close to half a percent.

For the series, while Nifty and Sensex rallied over 4% each, in broader space, CNX Midcap index added over massive 5.5%, with BSE Smallcap index creeping higher by 7.5%. Further, trade of over Rs 2.85 lac crore was done in terms of volume turnover on the last trading session of F&O series.

Short-covering by participants in early deals, mainly led to up-move of equity markets. While, optimistic global-set up too supported the sentiment. In the global market, Asian market  were mostly higher in holiday-thinned trade on Thursday, with shares in Japan climbing to the strongest level since 2007 as the yen weakened against the US dollar, boosting sentiment. While, European shares remained shut for the trade today on account of Christmas Holidays.

Closer home, sectorally, stocks from Power, Consumer Durables and Public Sector Undertaking counters were the top gainers for the session, while stocks from Auto, HealthCare and Realty space were the top laggards of the session. Power stocks charged up after CCEA approved changes in mega power policy along with changes in tapering coal linkage policy. Additionally, CCEA okayed three-year extension of coal supply to thermal power plants. Meanwhile, Public Sector Oil Marketing companies too contributed to the uptrend of equity markets. BPCL, HPCL and IOC rallied after a media report said the petroleum ministry was planning to propose a hike of 5 rupees in diesel prices.  Further, Fertilizer stocks too gained some traction on reports of fertilizer Ministry seriously considering industry's demand to raise the fixed production cost incurred by manufacturers.

From the expiry perspective, sectorally, BSE Realty gained 8.5%, BSE IT up by 8%, BSE Metal & capital logged gains of 6.5% each, BSE Pharma gained 5.5%, BSE Power added 5%, BSE oil & gas moved higher by 3% and BSE Consumer Durables was up 1.5% for the series.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1630: 898, while 132 scrips remained unchanged. (Provisional)

The BSE Sensex gained 39.51 points or 0.19% to settle at 21072.22. The index touched a high and a low of 21135.85 and 21013.14 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.41% and 1.23% respectively. (Provisional)

On the BSE Sectoral front, Power up by 1.12%, Consumer Durables up by 0.85%, PSU up by 0.60%, Bankex up by 0.59% and IT up by 0.45% were the top gainers, while Auto down by 0.69%, Healthcare down by 0.44%, Realty down by 0.07% and Oil & Gas down by 0.02% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Tata Power up by 4.41%, ONGC up by 2.24%, HDFC Bank up by 1.74%, Tata Steel up by 1.73% and Wipro up by 1.69%, while, Bajaj Auto down by 2.52%, Hero MotoCorp down by 2.01%, Dr Reddys Lab down by 1.97%, RIL down by 1.08% and Hindalco Industries down by 1.07% were the top losers in the index. (Provisional)

Meanwhile, in a solution to the mandated ethanol-buy problem, the government has appointed a monitoring committee, comprising officials from finance, agriculture and food ministries, for ensuring smooth transaction of ethanol from sugar mills to oil companies.

Although, under the ethanol blending programme (EBP), oil marketing companies (OMCs) were mandated to sell 5% ethanol-blended petrol from June 2013, however the first ethanol purchase tender, facing hurdles, has yet not been executed because the supplier sugar industry and buyer state oil companies are hurling charges at each other for deferring from purchase agreements.

OMCs have blamed sugar mills for not supplying adequate quantity of ethanol even after they agreed to pay mills about 30% more than the Rs 34 per litre they had offered three years ago. Meanwhile, sugar industry, which denies the allegation, has instead put the onus of their cash-strapped status on the oil industry. Further, as per the sugar industry, frequent delays in finalization of tender and delays in lifting are not only impeding cash flow when cane arrears are high, but also increasing the cost of ethanol for the suppliers. The industry has claimed cash flow of around Rs 1,000 crore being stuck because the oil companies not lifting the ethanol orders that they had placed. This purchase delay has led to sugar millers diverting the surplus and carry forward stock of molasses to export market.

Ironically, in wake of all these problems, the government has recently announced that it would look into raising the cap on blended ethanol in petrol from 5% to 10%.  Until, now the quantity of ethanol secured by oil firms up to last month and expected supply in remaining four months of the current financial year, would hardly be enough achieve 1% ethanol blending in 2013-14.

The CNX Nifty gained 12.30 points or 0.20% to settle at 6,280.70. The index touched high and low of 6,302.75 and 6,259.45 respectively. Out of the 50 stocks on the Nifty, 27 ended in the green, while 23 ended in the red.

The major gainers of the Nifty were Tata Power up 4.52%, BPCL up by 2.24%, ONGC up by 2.20%, Wipro up by 2.01% and Tata Steel up by 1.98%. The key losers were Bajaj-Auto down by 2.37%, Hero MotoCorp down by 1.81%, UltraTech Cement down by 1.46%, Lupin down by 1.45% and Reliance Industries down by 1.29%. (Provisional)

The European markets too remained shut for the trade today on account of Christmas Holidays.

The Asian markets barring Shanghai Composite and Seoul Composite concluded Thursday’s trade in green while Hong Kong and Indonesian markets remained shut for the trade today on account of Christmas Holidays. Markets in Korea were higher for the seventh straight session, after a break for Christmas. Japan’s Nikkei Stock Average extended its six-year high, pushing comfortably above the psychologically important 16,000 mark as a weak yen attracted foreign investors, and as Prime Minister Shinzo Abe tackled some of the remaining doubt over his stimulus measures. In Japan, markets responded well following two upbeat reports on the state of the Japanese economy from the government and Bank of Japan earlier in the week. Yet minutes of the Bank of Japan’s November 20-21 board meeting released showed that not all members were convinced that the country’s growth was on a long-term upward trend. One member stated that the recent deceleration in real gross domestic product growth could signal a downward shift in the economy’s trend.

China will likely stick with this year’s growth target of 7.5% for 2014 as top leaders balance the need to keep the economy on an even keel while pushing through necessary structural reforms. China’s banks are grappling with a surge of bad loans from three key sectors, led by the wholesale and retail sector. Non-performing loans in the wholesale and retail sector reached 2.6% -- far above the banking industry average in 2013 -- with information technology following at 2.0% and manufacturing at 1.8%. Japanese Housing Starts rose to a seasonally adjusted 14.1%, from 7.1% in the preceding quarter. Industrial Production in Singaporean fell to an annual rate of 4.0%, from 8.3% in the preceding month whose figure was revised up from 8.0%.