D-street cheers WPI data; Nifty reclaims 6,300 mark

Indian equity benchmarks exhibited a strong performance on Wednesday with frontline gauges garnering gain of over a percentage point. There was broad based buying witnessed in the markets and apart from the blue chips, the broader indices too participated in the rally. Both the benchmarks scaled past the psychological levels of 21,250 (Sensex) and 6,300 (Nifty). Sentiments remained up-beat since beginning as key bourses opened with a decent gap on upside amid firm global cues. Markets gained more strength, as India’s main inflation gauge, based on monthly WPI, cooled more than expectations at 6.16% for the month of December as against 7.52% (Provisional) for the previous month of November. This figure was way lower than street’s expectations of 7.00%. However, October inflation was revised upwards to 7.24% against 7% earlier.

Supportive cues from US markets provided the much-needed support to local markets in early deals. Sentiments also remained up-beat on the back of better-than-expected US retail sales data for the month of December. European shares too hit fresh 5-1/2 year highs, led by stocks sensitive to the global economic outlook after the World Bank raised its growth forecast for the first time in three years. Moreover, Asian equity benchmarks ended mostly in the green with the Nikkei bouncing by two and a half percent after suffering its sharpest daily drop in five months on Tuesday.

Back home, sentiments also got bolstered after Yes Bank reported better-than-expect third quarter numbers. The bank reported 21.41% rise in its net profit at Rs 415.60 crore for the quarter as compared to Rs 342.31 crore for the same quarter in the previous year. Total income of the bank increased by 18.60% at Rs 2902.00 crore for quarter under review as compared to Rs 2446.83 crore for the quarter ended December 31, 2012. On the currency front, Indian rupee marginally appreciated and traded at 61.50 per dollar at the time of equity markets closing, as compared to its previous close of 61.52 per dollar.

Meanwhile, rate sensitive counters like Banking, Realty and Auto all surged after WPI which eased to a 5-month low, raised hopes that the Reserve Bank of India (RBI) would maintain status quo on key policy rates for the second straight month at its policy review meet end-January. Additionally, stocks related to metal counter edged higher on hopes demand for metal would pick up after the World Bank raised its global growth forecasts. The World Bank raised its global growth forecasts, as the easing of austerity policies in advanced economies supports their recovery, boosting prospects for developing markets’ exports.

The NSE’s 50-share broadly followed index Nifty rose by around eighty points to end above its psychological 6,300 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and fifty points to end near its psychological 21,300 mark.

Moreover, broader markets too traded with traction and ended the session in the green with gain of around quarter a percent. However, the market breadth remained in favour of decliners, as there were 1,375 shares on the gaining side against 1,293 shares on the losing side, while 170 shares remained unchanged.

Finally, the BSE Sensex surged by 256.61 points or 1.22%, to settle at 21289.49, while the CNX Nifty gained 79.05 points or 1.27% to settle at 6,320.90.

The BSE Sensex touched a high and a low of 21302.73 and 21091.46, respectively. The BSE Mid cap index was up by 0.18%, while the Small cap index gained 0.30%.

The top gainers on the Sensex were L&T up 2.71%, HDFC up 2.56%, SSLT up 2.36%, BHEL up 2.15%, and ICICI Bank up 2.00%, on the flip side there were no losers on the index.On the BSE Sectoral front Capital Goods up by 1.98% Bankex up by 1.59%, Realty up by 1.31%, Auto up by 1.22% and PSU up by 1.19%, were the top gainers, while Consumer Durables down by 0.75% and Healthcare down by 0.02%, were the only losers on the sectoral front.

Meanwhile, in order to bring comprehensive policy for inspection, verification and monitoring in the forest clearance procedure, the Environment Ministry has kicked off a fast-track review of the cumbersome procedures involving green clearances that often take years. Now, the ministry has sought for India Inc's views on its revised draft policy to grant of forest clearance. Presently, the forest clearance procedures are considered by industry as the single-biggest drag on India's investment momentum and stalling projects. The ministry has proposed several changes in draft such as third party monitoring by accredited institutions and forest administration, self-monitoring by project developers and a structure for a transparent, effective and unbiased system to deal with violations of clearance conditions.

Meanwhile, the government is hopeful of putting in place a simplified forest clearance system before its term ends in a few months. The new environment and forest minister Veerappa Moily has approved several long-stalled investments during the past three weeks in order to ensure more predictability for prospective investors. Furthermore, the Cabinet panel headed by Prime Minister Manmohan Singh, has recently cleared investment projects of over Rs 6 lakh crore. Now the cabinet panel is shifting its focus to its other key area including a review of ministries' procedures to grant and refuse projects’ approvals and setting a framework for accelerating these decisions to boost the investment and economic growth.

The CNX Nifty touched a high and low of 6,325.20 and 6,265.30 respectively.

The top gainers on the Nifty were UltraTech Cement up by 3.76%, Bank of Baroda up by 3.63%, SSLT up by 2.96%, NMDC up by 2.78%, and PNB up by 2.64%, On the other hand, Ranbaxy Laboratories down by 2.30%, Cairn India down by 1.35%, Lupin down by 0.70%, BPCL down by 0.29%, and Sun Pharmaceuticals Industries down by 0.27%, were the only losers.

The European markets were trading in green, France's CAC 40 was up by 0.44%, Germany's DAX was up by 0.83%, and United Kingdom's FTSE 100 was up by 0.26%.

All the Asian markets barring Shanghai Composite and KLSE Composite, concluded Wednesday’s trade in green following a lead from Wall Street after better-than-expected US retail sales data. Hong Kong’s Hang Seng Index picked up, but came off stronger levels following data showing a decline in the issuance of new yuan loans by Chinese financial institutions in December from November. The World Bank has raised its growth forecasts for the global economy, but warned of potential volatility in capital flows as the United States withdraws its monetary stimulus. China’s growth was seen maintaining a 7.7 percent pace for the third year in a row this year as the government engineers a restructuring of the economy.

At least seven Chinese provinces are setting lower growth targets for this year than in 2013, adding to signs that expansion will slow as the government focuses on policies to sustain the economy in the long term. Singapore’s property market is stabilizing and the country isn’t facing a credit bubble that puts the island or its banking system at risk of a crisis, the central bank stated. Singaporean Retail Sales rose to a seasonally adjusted -8.7%, from -9.4% in the preceding month. South Korean Unemployment Rate rose to a seasonally adjusted annual rate of 3.0%, from 2.9% in the preceding month.