Indian equities continue firm trade; Metal, Bankex leads the rally

Indian equities continued its firm trade in green but pared off some minor gains as investors continue to relentlessly build positions across the counters, which kept the frontline indices afloat. The sentiments got a push with the encouraging weekly inflation numbers, which too underpinned buying interests in the rate sensitive pockets like Banking, Real Estate and Automobile, at a time when the pace of economic expansion slowed to 6.9% in the second quarter, the lowest in over two years. In the fights between bulls and bears to gain control over the market, bulls have clearly led the rally in the market giving no chances for bears to enter the market. Traders were seen piling up the position in Metal, Bankex and Realty sector while selling was witnessed in HealthCare sectors. Sterlite, Hindalco, SAIL, Jindal Steel, Sesa Goa and Tata Steel were seen trading with gain of around more than four to six percent pulling the markets up. ICICI Bank, Axis Bank, SBI, PNB, Kotak Bank and HDFC Bank from Banking counters were firm pushing the markets trade higher. Index heavyweight RIL was firm in green with gain of around three and half percent giving the much needed support for the markets. However, Bharti Airtel, Dr Reddy, BPCL, Maruti, HUL and BHEL were seen trading weak in red exerting pressure on the markets.

On the global front, all Asian markets were seen trading in green while the European markets were trading on a mixed note. Amid the ongoing global credit crunch and lingering Euro-zone woes, the consortium of world’s top central banks’ moved to pump liquidity into the global financial system. The six leading central banks including US, Canada, UK, Japan, Switzerland and Europe acted in concert by joining forces to lend dollars more cheaply to foreign banks. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,850 and 16,500 levels, respectively. The market breadth on BSE was in favour of advances in the ratio of 1749:930 while 91 scrips remained unchanged.

The BSE Sensex is currently trading at 16,484.75 up by 361.29 points or 2.24% after trading as high as and 16,718.11 as low as 16,482.71. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 1.05% while Small cap soared 0.88%.

On the BSE sectoral space, Metal up 3.87%, Bankex up 3.31%, Realty up 2.74%, Auto up 2.47% and Consumer Durables up 2.14% were the major gainers while HealthCare down by 0.06% was the lone losers in the space.

ICICI Bank up 6.62%, Hindalco up 6.44%, Tata Motors up 6.38%, Sterlite up 6.09% and DLF up 4.66% were the major gainers on the Sensex, while Bharti Airtel down 2.34%, Maruti Suzuki down 0.88%, HUL down 0.43% and BHEL down 0.27% were the only losers in the index.

Meanwhile, India’s weekly food inflation measured by the Wholesale Price Index (WPI) witnessed a sharp moderation to 8% for the week ended November 19 from 9.01% in the last week. The decline in food inflation has come on the back of moderation in prices of vegetables, cereals, potato, onion and wheat. Though, prices of most agricultural items, barring the above, continued to rise on an annual basis.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group  declined by 1.4% to 195.7 (Provisional) from 198.5  (Provisional) for the previous week due to lower prices of fruits and vegetables (5%), ragi (3%), fish-marine(2%) and jowar, gram, masur, poultry chicken and condiments and spices (1% each).  However, the prices of maize, milk, mutton, pork and tea (1% each) moved up.

The index for `Non-Food Articles` group rose by 1.1% to176.7(Provisional) from 174.7 (Provisional) for the previous week due to higher prices of flowers (12%), coir fibre and gingelly seed(4% each),  groundnut seed and raw rubber (3% each), raw silk and copra(2% each) and rape and mustard seed, cotton seed and soyabean (1% each). However, the prices of niger seed (3%), linseed (2%) and raw cotton, and raw jute (1% each) declined.

The index for `Minerals` group rose by 0.2% to 311.1 (Provisional) from 310.5 (Provisional) for the previous week due to higher prices of bauxite (9%), barytes (7%) and chromite (1%).  However, the higher prices of steatite (13%) and magnesite (1%) declined.

As a result the index for ‘Primary Articles’ which accounts for 20.12% of the WPI declined by 0.7% to 200.4 (Provisional) from 201.9 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 7.74% (Provisional) for the week ended November 19 as compared to 9.08% (Provisional) for the previous week. 

Meanwhile, the index for ‘Fuel and Power’ group, which accounts for 14.91% of WPI, rose by 0.2% to 171.8 (Provisional) from 171.5 (Provisional) for the previous week due to higher prices of naphtha and furnace oil (3% each) and aviation turbine fuel (2%).  However, the prices of petrol (3%) and light diesel oil (2%) declined. The annual rate of inflation, calculated on point to point basis, stood at 15.53% (Provisional) for the week ended November 19 as compared to 15.49% (Provisional) for the previous week. 

The fourth successive decline in the India’s weekly food inflation is expected to provide some relief to the government, policy- makers and industry. The RBI has hiked interest rates 13 times since March 2010, to tame demand and curb inflation. However, in its second quarterly review of the monetary policy last month, the RBI had said that it expected inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7% by March 2012.

The S&P CNX Nifty is currently trading at 4,940.85, higher by 108.80 points or 2.25% after trading as high as 5,011.90 and as low as 4,934.55. There were 44 stocks advancing against 6 declines on the index.

The top gainers on the Nifty were ICICI Bank up 6.81%, Tata Motors up 6.48%, Sterlite up 6.29%, Hindalco up 6.26% and SAIL up 6.17%.

Bharti Airtel down 2.50%, Dr Reddy’s down 2.07%, BPCL down 1.91%, Maruti down 1.28% and HUL down 0.88% were the major losers on the index.

Asian markets traded on an encouraging note, Shanghai Composite surged 2.29%, Hang Seng soared 5.63%, Jakarta Composite jumped 1.81%, KLSE Composite ascended 0.93%, Nikkei 225 spurted 1.93%, Straits Times gained 2.31%, Seoul Composite rallied 3.72% and Taiwan Weighted garnered 3.98%.

The European markets were trading on a mixed note with, France’s CAC 40 down 0.84%, Germany’s DAX descended 0.66% and Britain’s FTSE 100 inched up 0.10%.