Post Session: Quick Review

Indian equity markets, after consolidating in the previous trading session, staged an impressive show on Monday, by rallying close to two percent and logging its biggest single day gain since November 25, 2013 ahead of the crucial Consumer Price Inflation (CPI) data, which would be released later in the evening and is likely to ease to a three-month low of around 10% in December, from 11.24% the previous month, the highest reading on record. Trading strength to strength, benchmarks, Sensex and Nifty, concluded near day’s high point, which was past 21,150 and 6,250 levels. Massive buying that got triggered during the dying hours of the trade, lifted markets to day’s high. Meanwhile, broader indices, showing bit of underperformance, went home with modest gains aof about a quarter percent.

The sentiment at Dalal Street was upbeat right from the start of the trade after data on Friday showed industrial output in November contracted unexpectedly, which bolstered hopes that the Reserve Bank of India (RBI) will keep interest rates on hold for a second consecutive month at its policy review on January 28. Additionally, local shares drawing support from Asian counterparts, edged higher after a surprisingly weak US jobs report on Friday revived speculation that the Federal Reserve could keep policy loose for longer.

On the global front, receiving a positive hand-over from Asian counterparts, European shares too edged higher, led by a rally in banking stocks after regulators agreed to ease the way that a leverage ratio is compiled to avoid squeezing financing for the global economy.

Closer home, the sharp up-move of the bourses was backed by across the board buying at Dalal Street, with stocks from HealthCare counters proving to be the only exceptions to this uptrend. The sharp plunge of over 5% for Ranbaxy shares mainly drifted the entire pivotal lower.  Shares of pharmaceutical major Ranbaxy Laboratories collapsed following media reports that the USFDA has begun inspection of its active pharmaceutical ingredient or API manufacturing factory at Toansa in Punjab. On the flip side, Information Technology, Technology and Banking counters emerged as notable gainers. While, IT stocks were in demand after Infosys’ better-than-expected quarterly results, with stocks like TCS and HCL Technologies hitting record high level, banking shares remained upbeat for the session on prospects of another status-quo stance of RBI in its upcoming third monetary policy review. Additionally, shares of oil and gas companies, ONGC and Reliance Industries (RIL), too gained after the government officially notified a decision taken last year to change the pricing formula for domestic natural gas from April 1, thereby removing the uncertainty on what effectively constitutes a price hike. Besides, retail stocks such as Shoppers Stop, Future Retail and Trent also witnessed much of buying interest after Centre on Sunday refused to accept the US retail giant's demand of reducing the 30% local sourcing to 15% in the immediate future. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1346: 1382, while 148 scrips remained unchanged. (Provisional)

The BSE Sensex gained 409.07 points or 1.97% to settle at 21167.56.The index touched a high and a low of 21169.08 and 20850.54 respectively. Among the 30-share Sensex, 23 stocks gained, while 7 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.21% and 0.35% respectively. (Provisional)

On the BSE Sectoral front, IT up by 3.12%, Teck up by 2.55%, Bankex up by 2.48%, Oil & Gas up by 2.25% and Capital Goods up by 1.92% were the top gainers, while Healthcare down by 0.65% was the only loser in the space. (Provisional)

The top gainers on the Sensex were TCS up by 4.26%, ICICI Bank up by 3.66%, Infosys up by 3.33%, L&T up by 2.97% and RIL up by 2.72%, while, Tata Power down by 1.55%, Sun Pharma down by 1.18%, Hindustan Unilever down by 0.60%, SSLT down by 0.38% and Maruti Suzuki down by 0.32% were the losers on the index. (Provisional)

Meanwhile, against all hopes of slight recovery after shrinking for the first time in four months for the month of October, India’s annual industrial output growth, measured by index of industrial production (IIP), in a much of a shocker, contracted further by 2.1% in November as compared to the same month last year. IIP, which shrank by 1.8% in October, was way lower than street’s expectation of modest growth figure of 1% in November and further added to the concerns as policy makers’ grapple with slowing growth, while battling with rampant inflation. Meanwhile, the cumulative growth for the period April-November 2013-14 over the corresponding period of the previous year stood at -0.2%.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2013 stood at 122.9, 170.3 and 158.5 respectively, with the corresponding growth rates of 1.0%, -3.5% and 6.3% as compared to November 2012. The cumulative growth in the three sectors during April-November 2013-14 over the corresponding period of 2012-13 has been -2.2%, -0.6% and 5.4% respectively.

On use based classification, capital goods production, a barometer for investments in the economy, grew by of 0.3% at 236.1 for November as compared to 235.4 in the same month previous year. Further, Consumer durables and Consumer non-durables recorded growth of (-) 21.5% and 2.5% respectively, with the overall growth in Consumer goods being (-) 8.7%.

The latest data paints grim outlook for the economy ahead of the crucial wholesale and consumer price data, which will help determine whether the Reserve Bank of India will resume raising interest rates after tightening monetary policy by a total of 50 basis points over September and October.

India VIX, a gauge for markets short term expectation of volatility gained 2.37% at 15.95 from its previous close of 15.58 on Friday. (Provisional)

The CNX Nifty gained 112.25 points or 1.82% to settle at 6,283.70. The index touched high and low of 6,286.50 and 6,189.55 respectively. Out of the 50 stocks on the Nifty, 36 ended in the green, while 14 ended in the red.

The major gainers of the Nifty were TCS up 4.26%, HCL Tech up by 3.87%, Kotak Bank up by 3.22%, Infosys up by 3.21% and DLF up by 3.13%. The key losers were Ranbaxy down by 5.28%, Lupin down by 1.62%, Tata Power down by 1.56%, Sun Pharmaceuticals down by 1.05% and Hindustan Unilever down by 0.83%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.27%, the United Kingdom’s FTSE 100 up by 0.20% and Germany’s DAX up by 0.44%.

The Asian markets, barring Shanghai Composite and Straits Times concluded Monday’s trade in green on hopes that worse-than-expected jobs report from United States could lead the Federal Reserve to hold off any fresh cuts to its stimulus program. Thailand stocks were struggling, though were off session-lows, as thousands of people participated in an anti-government protest in the capital city of Bangkok. The Japanese market remained closed today on account of ‘Coming of Age Day’ holiday.  Indonesia’s rupiah gained the most in six weeks and the stock index had its biggest rally since September after an ore export ban was diluted. Indonesia will be shut on Tuesday for a public holiday and will reopen on Wednesday.

Shanghai’s tax revenue rose 8.7 percent from a year earlier to 801 billion yuan ($131.3 billion) in 2013, excluding taxes levied by the customs and stamp tax on securities transactions. The service industry paid nearly two-thirds of Shanghai’s tax revenue last year and financial firms took the lead as they made up 40 percent of the 100 top service taxpayers, underlining the city’s goal to be a global financial center.