Post session - Quick review

Indian benchmark indices joining their global party showcased a marvelous performance on Thursday by amassing colossal gains of over two percent as investors placed bets on improved overseas fund inflows, after major central banks took coordinated actions to lower dollar funding costs to European bank, to prevent a full-blown financial crisis. Prolonging the previous session euphoric mood, Indian equity markets showcased mesmerizing moves right from the dawn of the trade as positive global leads spurted bout of optimism at Dalal Street. Overnight rally of US stock markets was the first big trigger to pump strength into equity markets along with the regional counterparts.

Meanwhile, rallying on hopes that policy makers were moving fast to forestall a double-dip recession for the global economy, Asian pacific stocks shot up to a two week high level. A surprise move by the People's Bank of China to cut its reserve requirement ratio for the first time in over three years also added to the upbeat mood.

However, European shares reacting to the hawkish comments on the economy from European Central Bank President Mario Draghi, slipped in early trade on Thursday, took some steam off from the Indian equity markets. ECB President Mario Draghi told the European Parliament on Thursday that the downside risks to Europe's economic outlook had increased and the European Central Bank would ensure inflation does not undershoot its target as well as exceed it. Back on the home turf, market participants giving thumbs to sanguine global developments managed to overlook sluggish domestic economic data, which otherwise could have sapped the demand of risky assets. India's manufacturing sector expansion slowed in November as factory output grew at its slowest pace in nearly three years. Seasonally adjusted HSBC Purchasing Managers’ Index TM (PMI TM) - a headline index designed to measure the overall health of the manufacturing sector, fell to 51.0 in November, down from October’s 52.0, the second-weakest in the current sequence of growth. Meanwhile, growth of eight core infrastructure industries for the month of October 2011 declined to six year low-level of 0.1% compared to 7.2% in October 2010.

However, investors were encouraged with the release of weekly inflation data, which 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. On  the BSE sectoral front, although buying was witnessed across 13 index pivotal, however, stocks from Metal coupled with stocks of rate sensitive’s i.e. Bankex, Realty and Auto fuelled the rally. On the flip side, the stocks from Healthcare counter remained the only shot in the arm, dragging the index pivotal lower with loss of over 0.25%.

The 30 share barometer index -Sensex- surpassed 16700 psychological levels in early trade, however selling pressure witnessed at the dying hours of the trade sent the benchmark indices sub 16500 psychological mark. In the similar trend widely followed index on NSE-Nifty-after touching a high of over 5000 mark, settled off that level, with gains of over a hundred points. The broader indices although did not accumulate gains in magnitude of frontline indices, but they too ended higher by over 0.50%. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1573:1212 while 135 scrips remained unchanged.

The BSE Sensex gained 334.66 points or 2.08% and settled at 16,458.12. The index touched a high and a low of 16,718.11 and 16,430.61 respectively. 24 stocks advanced against 6 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.87% while Small-cap index was up by 0.36%. (Provisional)

On the BSE Sectoral front, Metal up 3.98%, Bankex up 3.53%, Realty up 3.43%, Consumer Durables up 2.59% and Auto up 2.13% were the top gainers while HealthCare down 0.54% was the only losers.

The top gainers on the Sensex were Hindalco up 7.05%, ICICI Bank up 6.56%, Sterlite Industries up 6.24%, Tata Motors up 5.83% and DLF up 4.68%.

On the flip side, BHEL down 3.17%, Bharti Airtel down 2.06%, HUL down 1.02%, Maruti down 0.99% and Sun Pharma down 0.38% were the top losers on the index. (Provisional)

Meanwhile, India’s gross domestic production (GDP) growth for the second quarter of 2011-12 has declined to its 8 quarter lowest level of 6.9%, Finance Minister Pranab Mukherjee has expressed concerns and said that the figure has fallen short of government expectations. 'Second quarter GDP figure has come. Of course, there was speculation in the market that it would be somewhere between 6.5 % and to 7 % and it is 6.9 %. No doubt, it is well below my projections during the time of the Budget,' Mukherjee said. By adding further he said 'I cannot ignore certain facts which have taken place after the presentation of the Budget, the international financial crisis is having its adverse impact and resulting in slow growth of the Euro and also in America.'

To curb the ascending inflation, the Reserve Bank of India (RBI) has increased its key policy rates by 13 times in last 21 months. However, the headline inflation measured by Wholesale Price Index (WPI) has been hovering above 9% mark from December 2010.  For the current financial year, Finance Minster expects Indian economy to grow by 7.3% which is significantly low as compared to original estimates of 9% made at the start of the year. 'Taking into account the two quarters together, now it appears, it will be around 7.3 % GDP growth. Of course, had it been ten years ago, this would have elated me. But today, I cannot have that satisfaction because we reached the higher trajectory growth and from there we are slipping. Nonetheless, we shall have to try to face the situation and to see what best we can do at this given situation,' Finance Minster added.

Confirming the economic slowdown country’s GDP in the second quarter of 2011-12 fell to 6.9% compared to 8.4% in same period of last financial year. This decline in GDP growth is because of the poor performance of the manufacturing, agriculture and mining sectors. In the second quarter, growth in the manufacturing sector dipped to a meager 2.7% from 7.8% in the corresponding period of 2010-11. The GDP growth in the first half of 2011-12 also moderated to 7.3% from 8.6% in the April-September 2010. 

India VIX, a gauge for market’s short term expectation of volatility lost 5.76% at 25.02 from its previous close of 26.55 on Wednesday. (Provisional)

The S&P CNX Nifty gained 98.65 points or 2.04% to settle at 4,930.70. The index touched high and low of 5,011.90 and 4,916.70 respectively. 41 stocks advanced against 8 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Hindalco up 6.99%, ICICI Bank up 6.95%, SAIL up 6.73%, Sterlite up 6.34% and Tata Motors up 5.70%.

On the other hand, BHEL down 3.08%, BPCL down 2.69%, Dr. Reddy down 2.31%, Bharti Airtel down 2.24% and Maruti down 1.25% were the top losers. (Provisional)

The European markets are trading mixed, with France's CAC 40 down 0.07%, Germany's DAX down 0.29% and FTSE 100 up 0.30%.

Stocks of Asian region rallied to two-week highs on Thursday, building on strong global gains after an agreement among global central banks to make cheaper dollar loans available to struggling European banks while, news of 50-basis-point cut in Chinese bank’s reserve requirement ratio too strengthen the sentiments. The US Federal Reserve, and the central banks of the UK, the euro zone, Canada, Japan and Switzerland announced that they had agreed to reduce the cost of offering dollar financing through swap arrangements.

China’s benchmark stock index closed 2.3 percent higher on Thursday, the biggest percentage rise in 5 weeks and with banking stocks up sharply, after the central bank announced a cut in banks’ reserve requirement ratios (RRR) in a reversal of its recent tight monetary policy stance. The People's Bank of China announced a 50-basis-point RRR cut after the market closed on Wednesday, which will take effect on December 5, a policy shift to ease credit strains and shore up an economy running at its weakest pace since 2009.