Post Session: Quick Review

Friday’s session turned out to be fourth straight session of gains for Indian equity markets, which puffing up gains of over three tenths of a percent, ended past the crucial 20,350 (Sensex) and 6,050 (Nifty) levels respectively. Un-like the previous three sessions of trade, where recovery in the second half of the session took the markets higher, sentiments in today’s trading session remained upbeat right from the start of the trade. Although, markets did briefly slip in red in the afternoon deals, it quickly bounced back in green and ended well above quarter of a percent. Broader indices also settled with good gains in the range of 0.35%-0.60%. For the week, broader indices outperformed larger peers and ended with gains of over a percent, while both Sensex and Nifty were down with loss of close to half a percent.

On the global front, Asian shares regained a measure of stability on Friday, stepping further away from five-month lows after a strong rally on Wall Street and hopeful signs the upcoming US payroll report put some global growth concerns at rest. Additionally, European shares on receiving positive hand-over from Asian pacific shares, were trading in green, well supported by gains of Heavyweight steelmaker ArcelorMittal, which rose by 4 percent after forecasting higher profits in the year ahead.

Closer home, session’s gains were encouraging, especially as they come ahead of advance estimates of GDP for FY14, due to be released after market hours on Friday and also well ahead of IIP and WPI data in the coming week.  In a related development, the National Council of Applied Economic Research (NCAER) lowered India’s GDP forecast for the current fiscal to 4.7- 4.9 percent from 4.8 - 5.3 percent projected earlier. Presenting a somber picture of Indian economic outlook, NCAER noted that despite good farm production, high baseline oil price and rupee depreciation are the factors making significant dent to growth of Indian economy.

Sectorally, while most of the indices ended in green, prominent gainers were stocks belonging to Metal, Healthcare and Realty. On the flip side, Information Technology, Fast Moving Consumer Goods and Consumer Durables counters were the top losers of the session. Additionally, telecom stocks, barring Bharti Airtel, rang off for the session. On the fourth day of the ongoing spectrum auction for 900 MHz band in three metro circles and 1800 MHz band in 22 circles, the government after completion of 28 rounds has received bids totaling Rs 53,000 crore. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1377: 1192, while 157 scrips remained unchanged. (Provisional)

The BSE Sensex gained 76.78 points or 0.38% to settle at 20387.52. The index touched a high and a low of 20450.51 and 20282.30 respectively. Among the 30-share Sensex, 22 stocks gained, while 7 stocks declined and one stock remains unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.62% and 0.36% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 2.79%, Healthcare up by 1.68%, Realty up by 1.00%, PSU up by 0.90% and Power up by 0.85% were the top gainers, while IT down by 0.63%, Teck down by 0.58%, FMCG down by 0.53% and Consumer Durables down by 0.26% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 6.82%, SSLT up by 3.68%, Sun Pharma up by 2.77%, Axis Bank up by 2.08% and Bajaj Auto up by 2.02%, while, Hindustan Unilever down by 1.67%, TCS down by 1.52%, Wipro down by 1.24%, BHEL down by 0.83% and RIL down by 0.47% were the top losers in the index. (Provisional)

Meanwhile, concerned over the falling trade volume after imposition of Commodity Transaction Tax (CTT), commodity markets regulator Forward Markets Commission (FMC) are considering several reforms to encourage investor participation on bourses adding that there is no plan on reversing tax.  During July’13, CTT at 0.01 per cent was imposed on futures trading of non-agricultural items. After that, combined turnover in Indian 5 national and 12 regional level bourses fell by over 37 percent to Rs 85.28 lakh crore till January 15th of this fiscal.

Highlighting various reasons for low trading volume, FMC Chairman stated that participation could be improved without decreasing taxes as the regulator is taking several steps to enthuse more confidence in the market, bring more participation and better governance at the commodity exchanges. FMC planned to implement recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) by March’14 to strengthen consumer protection. Regulator is also working on rationalising position limits and initial margins for clients members, the corpus size of settlement guarantee fund, besides strengthening the warehousing facilities. In order to encourage retail investors, FMC emphasized that the exchanges are encouraged to launch small contracts and delivery-centre wise contracts among others. Furthermore, FMC is also planning to relax norms and permit brokerage firms, who hold equity up to 2 per cent in the exchange, to trade on the exchange platform. As per the present norms, brokerage firm who hold equity cannot trade on the exchange platform.

In other development, commodity markets regulator FMC stated that it will soon take a call on allowing investors to realise their funds in e-series contracts, under which retail investors bought and sold commodities in de-materialised form. E-series contracts, that were earlier offered on the crisis-hit NSEL, function like the cash segment in equities, but offered commodities in the demat form in smaller denominations. India VIX, a gauge for markets short term expectation of marginally lost 2.05% at 18.55 from its previous close of 18.94 on Thursday. (Provisional)

The CNX Nifty gained 28.10 points or 0.47% to settle at 6,064.40. The index touched high and low of 6,079.95 and 6,030.90 respectively. Out of the 50 stocks on the Nifty, 34 ended in the green, while 16 ended in the red.

The major gainers of the Nifty were Tata Steel up 6.98%, JP Associate up by 6.21%, Ambuja Cements up by 5.04%, IDFC up by 4.14% and Bank of Baroda up by 3.84%. The key losers were Hindustan Unilever down by 1.63%, TCS down by 1.49%, Wipro down by 1.24%, BHEL down by 1.18% and HCL Tech down by 1.04%. (Provisional)

Most of the European markets were trading in green; Germany’s DAX up by 0.22%, UK’s FTSE 100 up by 0.16% and France’s CAC 40 was up 0.05%.

The Asian markets concluded Friday’s trade in green on taking cues from Wall Street. Japan’s Nikkei gained after the yen weakened against the US dollar overnight. The greenback had climbed to trade at Yen 102.11 in New York, after gaining a total of 0.7% in the previous session. Indonesia’s rupiah forwards were set for their best week in four on optimism the current-account deficit will narrow after the country recorded the largest trade surplus in two years and international reserves climbed. The current-account shortfall was probably below 2 percent of gross domestic product last quarter, from 3.8 percent in the previous period. Indonesia is considering tax breaks for investors in the nation’s corporate bonds. Malaysian Trade Balance fell to 9.50B, from 9.70B in the preceding month.

The services sector in China expanded in January at its weakest pace since August 2011 after companies achieved a smaller volume of new business. The HSBC/Markit Services Purchasing Managers' Index (PMI) dropped to 50.7 in January, a low last seen two and half years ago. China’s current account surplus in the fourth quarter of 2013 reached 305.4 billion yuan, the fifth straight quarter of surplus. The goods trade surplus reached 708.8 billion yuan while deficits were recorded in service trade and current transfers of 148.1 billion yuan and 21.8 billion yuan, respectively. Japan’s index of leading economic indicators rose to a seasonally adjusted 112.1, from 111.1 in the preceding month whose figure was revised up from 110.8.