Post Session: Quick Review

First trading session of fresh F&O series turned out to be pleasant one for Indian equity markets, which after getting a gap-up start went on adding gains and concluded near day’s highest point, with gains of over half a percent. Relentless buying in blue chip stocks, viz, Infosys, Larsen & Toubro, ICICI Bank and HDFC etc. by Foreign Institutional Investors, who turned net buyers in Indian shares on Thursday, bringing their monthly total so far to around $2.5 billion, led to up-move of local equity markets amidst mostly positive global set-up. Broader indices too participated in the rally and eked out gains of two tens of a percent. Thus, the secular-up-move of bourses that was on account of across the board buying activity, took Sensex and Nifty, past the psychological 21,150 and 6,300 levels respectively by the close of trade. For the week, both Sensex and Nifty ended with gains of over half a percent. However, the week clearly belonged to broader indices, which led to BSE Smallcap index rallying over 3% and CNX Midcap index puffing gains of over two and half percent.

On the global front, European and Asian stocks climbed higher as an improving US jobs market and falling money market rates in China prompted investors to favor riskier assets. Sentiment were bolstered after Wall Street reached record highs for a fourth straight session after US initial jobless claims declined more than forecast last week to 338,000, reinforcing confidence in the global economy even as the Federal Reserve begins slowing stimulus known as quantitative easing. Meanwhile, Asian pacific shares made massive gains, with Nikkei 225 index logging its highest close in six years after Japanese manufacturing activity expanding at the fastest clip in more than seven years while firms added workers at the quickest pace in more than six years.

Closer home, investors also drew some solace from dovish comments of ex deputy governor, Subir Gokarn, who expects January inflation data to show a downtick aided by softening vegetable prices thereby easing in food inflation. The broad based rally was led by shares from IT pivotal, which gained after recent data from US pointed at to a sturdier US economy, further brightening the outlook for India's export-dependent IT sector. Among the space, while Tata Motors shares ended higher by 0.10%, Infosys ended little below its record high level of 3573, scaled on December 20, 2013.  Following suite, were stocks from Healthcare and Banking counters. Stocks from Oil & Gas and Auto counters were the only pockets of weakness. Power stocks, which remained in fine fettle for second consecutive session after Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, relaxed the coal tapering linkage policy for nine power projects with investments worth Rs 60,000 crore, edged lower by the end of trade on profit-booking. On the flip side, banking stocks crept higher, with Axis bank extending Thursday’s gains triggered by the government's decision to clear a proposal of the bank for increase in foreign investment ceiling in the bank to 62% from 49%. While, PSU banks, like Allahabad bank and Dena Bank, too were up on capital infusion from GoI. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1386: 1173, while 145 scrips remained unchanged. (Provisional)

The BSE Sensex gained 115.63 points or 0.55% to settle at 21190.22.The index touched a high and a low of 21235.14 and 21113.25 respectively. Among the 30-share Sensex, 18 stocks gained, while 12 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.29% and 0.02% respectively. (Provisional)

On the BSE Sectoral front, IT up by 1.83%, Teck up by 1.48%, Healthcare up by 0.81%, FMCG up by 0.57% and Metal up by 0.52% were the top gainers, while Oil & Gas down by 0.48%, Auto down by 0.25% and Power down by 0.01% were the only losers in the space. (Provisional)

The top gainers on the Sensex were TCS up by 3.07%, Wipro up by 1.62%, Cipla up by 1.38%, Infosys up by 1.38% and HDFC up by 1.15%, while, RIL down by 1.00%, Maruti Suzuki down by 0.87%, Bajaj Auto down by 0.78%, BHEL down by 0.63% and Axis Bank down by 0.46% were the top losers in the index. (Provisional)

Meanwhile, in order to attract pension money to the capital markets, the Securities and Exchange Board of India (SEBI) has sought for clarity on taxation policy to be applied to retirement- focused funds.

The present size of Indian pension fund, including individual retirement money, provident fund and other small savings  is estimated at over Rs 1.5 lakh crore in 2010. Furthermore, the size of pension market in India is expected to rise to over Rs 2 lakh crore by 2015 and further to close to Rs 3 lakh crore in 2020 and more than Rs 4 lakh crore by 2025. Meanwhile, the share of India pension fund is almost negligible in the Indian equity markets. On the other hand, foreign pension funds including from the US and Canada regularly invest in Indian markets.

The government has allowed 15 percent investment in equities, however, Employee Provident Fund Organisation (EPFO) refused to invest in capital market. Terming tax benefits necessary to attract pension money, SEBI Chairman U K Sinha has emphasized that in order to tap huge pension fund, there is a need to work on two issues. Firstly, SEBI has to continue a dialogue with EPFO and its trustees so that they start investing in domestic equity markets, and the second is the government should provide assurance of tax benefit to other pension fund houses. If a mutual fund launches a pension product, an assurance of tax benefit is required for it, he added. Earlier, market regulator has asked asset management companies or mutual fund houses to launch pension products, so that retirement money can be brought into the capital market. Meanwhile in order to develop India’s pension sector, the government, in September has allowed 26 percent foreign direct investment (FDI) in the country's pension sector.   

The CNX Nifty gained 37.20 points or 0.59% to settle at 6,316.10. The index touched high and low of 6,324.90 and 6,289.40 respectively. Out of the 50 stocks on the Nifty, 31 ended in the green, while 19 ended in the red.

The major gainers of the Nifty were TCS up 3.09%, NMDC up by 2.78%, Kotak Bank up by 1.80%, Cipla up by 1.75% and Wipro up by 1.60%. The key losers were JP Associate down by 1.74%, Maruti Suzuki down by 1.12%, Reliance Industries down by 1.07%, Asian Paints down by 0.94% and UltraTech Cement down by 0.82%. (Provisional)

Most of the European markets were trading in green with, Germany’s DAX up by 0.76%, the United Kingdom’s FTSE 100 up by 0.57% and France’s CAC 40 up by 0.97% 

The Asian markets concluded Friday’s trade in green with Chinese shares outperformed the region, as a week-long spike in interbank lending rates settled, easing concerns about the health of China’s financial system. China’s economy could approach $21 trillion over the next eight or nine years, nearing the size of that of the US, even as growth is expected to slow to around 6% from about 7.5% currently, according to a major Chinese research institute. Thailand Industrial Production fell to a seasonally adjusted -10.6%, from -4.0% in the preceding month.

Japan’s retail activity accelerated in November, while industrial production inched up just slightly. Retail sales rose 4% from a year earlier, picking up their pace from October’s revised 2.4% rise, while large retailers saw their same-store sales grow by an annual 0.6%, swinging from a 0.1% decline the previous month. Industrial output, meanwhile, ticked up by a seasonally adjusted 0.1% during November, slowing sharply from October’s 1% rise. Still, a survey of manufacturers included in the monthly data set showed expectations for December’s result to climb 2.8%, while January’s result was tipped to surge 4.6%.

Japan moved a bit closer to its inflation goal in November, with data showing a 1.2% rise for the core consumer price index from a year earlier. It was also higher than the 0.9% increase in October. That marked the sixth straight month of price rises and brought the country closer to the 2% inflation target pledged by the government and the Bank of Japan.