Post Session: Quick Review

After consolidating in last session, Indian equity markets resumed their gaining streak and ended with modest gains of close to two tenths of a percent on Tuesday. However, markets surrendered substantial portion of their gains in the last hour of trade, as investors locked gains ahead of the crucial CPI data on Wednesday. Nevertheless, underlying tone remained fairly positive ahead of Fed chair Yellen's testimony post market hours. By close of trade, both Sensex and Nifty, settled above the crucial 20,350 and 6050 levels respectively. Meanwhile, broader indices paring substantial gains went home up in the range of 0.10%-0.25%. Narrower than expected January trade deficit data, also added to the upbeat mood of Indian equity markets. On the macro-front, thanks to lower imports, trade deficit narrowed in January at $9.91 billion as compared to $10.14 billion in December and way lower than $18.98 billion in the corresponding month of the previous year.

On the global front, Asian pacific shares went home with gains on cautious optimism that the Federal Reserve's new head will signal the central banks commodity-friendly monetary policy is to remain for now. European shares too moved higher ahead of the US Federal Reserve chair's testimony.

Closer home, much of the bourses gains from Information Technology (IT) stocks which witnessed strong demand after Nasscom’s guidance for the sector.  As per the industry lobby group, the Indian IT outsourcing sector is expected to see exports growing 13-15 percent in the fiscal year starting in April, with improving US and European economies driving growth. Additionally, banking and Auto stocks were in demand ahead of CPI data on Wednesday, which is expected to have eased to 9.40 per cent from a year earlier, compared with 9.87 per cent in December, which in turn could reinforce expectations that the Reserve Bank of India will leave interest rates on hold at its April 1 review after surprising investors with a 25 basis points hike last month.  Besides, sugar stocks like Shree Renuka, Balrampur Chini Mills and Bajaj Hindusthan were on buyers’ radar ahead of the outcome of Cabinet Committee on Economic Affairs (CCEA) meeting on sugar subsidy. The government is likely to decide on subsidy for export of 4 million tonnes of raw sugar. On the flip side, Power, Realty and Oil & Gas counters were the weakest links of trade. Fall of Reliance Industries after Delhi Chief Minister Arvind Kejriwal asked anti-corruption branch for legal cases to be filed against RIL’s Chairman Mukesh Ambani over pricing of gas produced from the D6 block in the east coast, mainly dragged the entire Oil & Gas pivotal. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1274: 1366, while 135 scrips remained unchanged. (Provisional)

The BSE Sensex gained 27.98 points or 0.14% to settle at 20362.25. The index touched a high and a low of 20443.35 and 20349.51 respectively. Among the 30-share Sensex, 15 stocks gained, while 15 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.29% and 0.12% respectively. (Provisional)

On the BSE Sectoral front, IT up by 0.86%, Auto up by 0.79%, Teck up by 0.71%, Consumer Durables up by 0.59% and Metal up by 0.52% were the top gainers, while Power down by 1.21%, Realty down by 0.77%, Oil & Gas down by 0.65%, Healthcare down by 0.19% and Capital Goods down by 0.17% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 2.77%, Tata Motors up by 2.76%, HDFC up by 1.40%, ONGC up by 1.36% and ICICI Bank up by 0.93%, while, NTPC down by 2.95%, RIL down by 2.08%, Hindalco down by 1.78%, Hero MotoCorp down by 1.67% and Maruti Suzuki down by 1.12% were the top losers in the index. (Provisional)

Meanwhile, improving the outlook for the country’s current account balance, trade deficit narrowed in January at $9.91 billion as compared to $10.14 billion in December and way lower than $18.98 billion in the corresponding month of the previous year, mainly on account of sharp drop of 18.07% in imports for January, as compared to year earlier at $36.67 billion. However, merchandise exports grew by just 3.79% at $26.75 billion as against $25.78 billion.

Total imports recorded an 18% contraction on account of sharp drop of 77% in gold and silver imports on the year. Cumulatively, exports during April-January grew by 5.71% at $257.088 billion, while imports slid by 7.81% at $377.044 billion, leaving the cumulative trade deficit at $ 119.956 billion.

Meeting the export target of $325 billion for fiscal 2013-14 could be now tough, but the Commerce Ministry is optimistic of achieving the target with signs of recovery in global economy. Meanwhile, the government expects to keep the current account deficit down under $50 billion in the fiscal year to March 2014. The shortfall was a record $87.8 billion in the previous fiscal which had precipitated a record fall in the value of the rupee against the dollar last summer.

India VIX, a gauge for markets short term expectation of marginally lost 2.20% at 18.63 from its previous close of 19.05 on Monday. (Provisional)

The CNX Nifty gained 9.45 points or 0.16% to settle at 6,062.90. The index touched high and low of 6,081.85 and 6,053.25 respectively. Out of the 50 stocks on the Nifty, 25 ended in the green, while 24 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were HCL Tech up 4.35%, Ranbaxy up by 2.99%, Tata Motors up by 2.76%, Tata Steel up by 2.43% and BPCL up by 1.63%. The key losers were NTPC down by 2.92%, Reliance Industries down by 2.21%, PNB down by 2.16%, Hindalco down by 2.11% and Hero MotoCorp down by 1.91%. (Provisional)

Most of the European markets were trading in green; Germany’s DAX up by 1.22%, UK’s FTSE 100 up by 0.88% and France’s CAC 40 was up 0.89%.

The Asian markets concluded Tuesday’s trade in green, while the Nikkei 225 was closed on account of ‘National Foundation Day’ holiday. Japan’s Economy Watchers Current Index fell to a seasonally adjusted 54.7, from 55.7 in the preceding month while Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.5, from 41.3 in the preceding month. Malaysia is expected to report strong fourth-quarter GDP growth of 4.7%, benefiting from increased industrial production and a boost to exports. The Southeast Asian country is set to report its fourth quarter GDP growth early Wednesday morning. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 2.97B, from 1.41B in the preceding month.The Paris-based Organization for Economic Cooperation and Development (OECD) stated that the outlook for most advanced economies is improving, with recoveries in the United States and Japan leading the way. The monthly leading indicator covering 33 member countries had reached its highest level since February 2011 in December, indicating that growth was firming. Japan saw its indicator move up to 101.4 from 101.3 in November, also hitting its highest level since the financial crisis as the central bank boosts the economy with unprecedented monetary stimulus while China’s reading stable at 99.3.