Late recovery helps benchmarks to eke out slender gains

Indian frontline equity indices staged a smart bounce in last leg of trade on Thursday, back after hitting lowest point of trade and recovered around a percentage point to finish in the positive territory with moderate gains. Earlier, the benchmark got off to a positive opening tracking supportive leads from Asian markets. The key gauges touched the highest point in session with the 30-share Sensex even breaching crucial 20,350 levels but sudden bouts of profit booking dragged the indices into the negative territory in late morning trade. Sentiments also remained dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 576.20 crore on February 5, 2014. Nevertheless, domestic bourses once again staged strong recovery in last leg of trade and regained their green trajectory supported by buying in beaten down but fundamentally strong stocks.

Firm opening in European markets too supported the sentiments with CAC, DAX and FTSE all trading higher in early deals, with corporate earnings updates supporting investor sentiment ahead of the release of monetary policy decisions from the Bank of England and the European Central Bank. Asian markets too ended in the green with investors indulging in some bargain hunting after recent steep losses.

Back home, some support came from Finance Minister P Chidambaram’s statement that the country can grow at a sustained rate of 8-9 percent annually over the next 10-30 years. Some optimism also came on the buzz that the government will allow 26% foreign investment in activities related to insurance like broking, third party administrators and surveyors and permitted FIIs and NRIs to also invest in insurers within stipulated cap. Meanwhile, Activity in India’s services sector improved marginally in January but still remained in the ‘contraction zone’ for the seventh month running. The HSBC Services Purchasing Managers’ Index (PMI) climbed to 48.3 in January from 46.7 in December.

Gains in fast moving consumer goods stocks like ITC and HUL too supported the markets up-move. Telecom stocks viz, Idea Cellular, Reliance Communication, Bharti Airtel  remained on buyers’ radar, as the third round of the telecom spectrum auction continued on a warm note on third day on February 5, 2014. Telecom companies bid aggressively for the efficient 900-MHz band available in Delhi, Mumbai and Kolkata circles. Select shipping stocks like, Global Offshore, Seamec and Dredging Corp edged higher, as the Cabinet Committee on Economic Affairs (CCEA) has approved five port related projects involving at least Rs 17,600 crore investments to increase the capacity of the major ports by 150.74 million tonnes per annum.

The NSE’s 50-share broadly followed index Nifty rose by over ten points and ended above the psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around fifty points to finish above the psychological 20,300 mark. Broader markets, however, struggled to get any traction and ended the session mixed. The market breadth was evenly divided, as there were 1,259 shares on the gaining side against 1,292 shares on the losing side while 169 shares remain unchanged.

Finally, the BSE Sensex surged by 49.71 points or 0.25%, to settle at 20310.74, while the CNX Nifty added 13.90 points or 0.23% to settle at 6,036.30.

The BSE Sensex touched a high and a low of 20358.19 and 20079.82, respectively. The BSE Mid cap index was down by 0.18%, while the Small cap index gained 0.06%.

The top gainers on the Sensex were Coal India up 4.59%, Tata Power up 3.22%, Hindustan Unilever up 2.90%, Mahindra & Mahindra up 2.14% and Maruti Suzuki up by 2.05%, on the flip side BHEL down 2.43%, Axis Bank down 1.64%, Cipla down 1.23%, TCS down 1.18%, and SBI down by 1.11% were the top losers on the index.

On the BSE Sectoral front FMCG up by 1.36%, Consumer Durables up by 1.00 %, Metal up by 0.92%, Auto up by 0.85% and PSU up by 0.63% were the top gainers. While, Realty down by 1.57%, Capital Goods down by 0.92%,  Bankex down by 0.23%, IT down by 0.17% and Healthcare  down by 0.07% were the top losers on the sectoral front.

Meanwhile, the Central Board of Trustees (CBT), the apex decision making body of the Employees’ Provident Fund Organisation (EPFO), approved the proposed amendments in the EPS-1995 scheme in order to provide a minimum monthly pension of Rs 1,000. The move will benefit about EPFO’s 28 lakh pensioners. As per the EPFO, Labour Ministry will soon move proposal to Union Cabinet for approval.

The CBT meeting, chaired by the Labour Minister Oscar Fernandes, also decided to raise the monthly wage ceiling to Rs 15,000 from Rs 6,500 through amending EPF scheme, 1952. At present, workers in India are getting basic wages, including basic pay and DA, of up to Rs 6,500 covering under the ambit of EPFO. Furthermore, the board also decided to reduce administrative charges paid by the employers from 1.10 percent of the basic wage, including basic pay and dearness allowance to 0.85 percent. The burden would increase with the increase in wage ceiling. Besides this, the CBT also approved the proposed change in the methodology of computing the pensionable salary on the basis of average salary of the last 60 months instead of 12 months as provided in the EPS-95.

The EPFO is presently running social security programmes include Employees' Provident Fund (EPF) Scheme 1952, Employees’ Pension Scheme (EPS) 1995 and Employees' Deposit Linked Insurance Scheme 1976.

The CNX Nifty touched a high and low of 6,048.35 and 5,965.40 respectively.

The top gainers on the Nifty were Coal India up by 5.02%, Hindustan Unilever up by 2.98%, Tata Power Company up by 2.88%, NMDC up by 2.71%, and Cairn India up by 2.35%. On the other hand, Jaiprakash Associates down by 2.96%, BHEL down by 2.58%, DLF down by 2.17%, PNB down by 1.94%, and Ranbaxy Laboratories down by 1.81% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 1.07%, Germany's DAX was up by 1.03% and United Kingdom's FTSE 100 was up by 0.64%.

The Asian markets, barring Nikkei 225 concluded Thursday’s trade in green with investors indulging in some bargain hunting after recent steep losses. However, gains remained capped as there was some cautiousness ahead of the US non-farm payroll data scheduled on Friday. Chinese Shanghai Composite remained closed on account of Lunar New Year. The data released showed that foreign investment in Japanese stocks fell ¥751.9 billion ($7.41 billion) last week. Taiwanese CPI rose to a seasonally adjusted annual rate of 0.76%, from 0.33% in the preceding quarter. Hong Kong’s total retail sales in 2013 grew 11% in value and 10.6% in volume over a year earlier to reach $494.5 billion. The total retail sales value in December, provisionally estimated at $49.7 billion, increased 5.7% year-on-year. After netting out the effect of price changes, total retail sales volume rose 6.1%. The HSBC Hong Kong purchasing Managers’ Index rose to 52.7 in January from 51.2 in December, indicating that business conditions improved for Hong Kong’s private sector.