Post Session: Quick Review

After taking a pause in the previous session, Indian equity markets resumed their northbound journey and ended upbeat with gains of over 3/4 of a percent for the session and 1.5% for the week, with Sensex ending near the crucial 20,700 and Nifty well above the crucial 6,150 level.  In the rock-solid session of trade, benchmarks after making a gap-up start traded strength to strength on sustained buying activities across the board and comfortably in positive territory. In the firm session of trade, where there did not appear iota of profit-booking, bit of volatility emerged in last hour of trade as select traders adjusted their position ahead of the holiday truncated F&O expiry week, which led to benchmarks ending near day’s high point. The rally which was broad-based also saw broader indices participation, which although underperformed larger counterparts, went home with gains of close to half a percent.

Positive global cues mainly underpinned the sentiment at Indian markets right from the start. On the global front, a survey showing brisk US manufacturing activity gave Asian stock markets a lift on Friday and bolstered the dollar, though underlying concerns about China's economic growth could keep investors from rushing to buy some emerging market assets. Additionally, European shares climbed higher on Friday, with France's CAC 40 hitting a 5-1/2-year peak, as investors took their lead from stronger equities on Wall Street and in Asia following robust US factory data.

Closer home, the rally at Dalal Street was led by Capital Goods and Information Technology stocks, which emerged as investors’ darling for the session. Additionally, banking stocks too were on investors’ radar after previous session’s sharp slump. The stocks were in demand despite IMF suggesting RBI to go for more interest rate hikes, given the sticky nature of inflation. Besides, shares of cement manufacturer such as Ambuja Cements, UltraTech Cement, ACC, India Cements, Kesoram Industries and JK Lakshmi Cement firmed up in trade after cabinet on February 20, 2014, decided to convert 7,200 kilometers of states roads into national highways. Moreover, power stocks were in focus ahead of a Central Electricity Regulatory Commission (CERC) compensatory tariff order, wherein CERC is likely to tone down Deepak Parekh panel recommendations.  Deepak Parekh has suggested compensatory tariff between 45-55 paise per unit for Tata Power and around 60 paise per unit for Adani Power. On the flip side, Realty counter was the only loser amongst 13 sectoral indices on BSE. Additionally, telecom stocks also rang-off in trade after DoT issued guidelines for merger and acquisition in telecom industry. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1471: 1191, while 154 scrips remained unchanged. (Provisional)

The BSE Sensex gained 153.59 points or 0.75% to settle at 20690.23. The index touched a high and a low of 20725.04 and 20599.91 respectively. Among the 30-share Sensex, 22 stocks gained, while 8 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.69% and 0.44% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 1.29%, IT up by 1.18%, FMCG up by 1.14%, Bankex up by 0.97% and Metal up by 0.95% were the top gainers, while Realty down by 0.04% was the only loser in the space. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.70%, Tata Steel up by 1.97%, ICICI Bank up by 1.83%, ITC up by 1.70% and L&T up by 1.64%, while, Bharti Airtel down by 2.71%, Cipla down by 0.71%, Maruti Suzuki down by 0.66%, Sun Pharma down by 0.54% and Hero MotoCorp down by 0.47% were the top losers in the index. (Provisional)

Meanwhile, a report tabled in Parliament has stated that India recorded an average annual economic growth rate of 8% during the 11th Five Year Plan (2007-12), however this was lower than the targeted 9% growth. The difference between the two could be attributed to both internal and external factors, viz. global slowdown, fluctuations in international prices, strong inflationary pressures and negative growth in agriculture due to drought like situation.

According to planning Minister Rajeev Shukla’s statement to the Rajya Sabha, the approach to the 12th Five Year Plan (2012-17), which had envisaged 9 per cent annual average economic growth rate, was later revised downward at 8 per cent by the National Development Council (NDC) in December 2012 while approving the five year policy. However, the growth targets would be reassessed in the mid-term appraisal of the five year policy in 2014-15.

Further,he highlighted that several steps had been undertaken to address the slowdown in GDP growth, including the setting of Cabinet Committee on Investment to fast track large infrastructure projects, strengthening of financial and banking sector and steps to increase infrastructure financing.

Nevertheless, in its advance estimates, Central Statistics Office (CSO) has pegged the economic growth in the current fiscal at 4.9 per cent which would be slightly higher than decade low figure of 4.5 per cent achieved in 2011-12. It is in view of this snail-paced growth, viz, 4.5 per cent in first year of 12th Plan (2012-13) and 4.9 per cent in second year (2013-14), the annual average economic growth rate target for the entire five year policy could be revised downwards.

India VIX, a gauge for markets short term expectation of volatility lost 7.45% at 14.03 from its previous close of 15.16 on Thursday. (Provisional)

The CNX Nifty gained 60.70 points or 1.00% to settle at 6,152.15. The index touched high and low of 6,159.65 and 6,108.00 respectively. Out of the 50 stocks on the Nifty, 37 ended in the green, while 12 ended in the red and one stock remain unchanged.

The major gainers of the Nifty were Ambuja Cements up 6.25%, ACC up by 6.04%, UltraTech Cement up by 5.70%, HCL Tech up by 4.56% and BPCL up by 4.44%. The key losers were Bharti Airtel down by 2.86%, Ranbaxy down by 2.00%, DLF down by 0.94%, Cipla down by 0.73% and Maruti Suzuki down by 0.63%. (Provisional)

Most of the European markets were trading in green; UK’s FTSE 100 up by 0.52% and France’s CAC 40 was up 0.11%, while Germany’s DAX down by 0.04%.

The Asian markets barring Shanghai Composite concluded Friday's trade in green, with the regional benchmark index rebounding from their biggest drop in two weeks, after a larger-than-forecast climb in a measure of US manufacturing tempered concern about global growth. Japanese Nikkei 225 traded higher as the yen weakened against the dollar and after the US manufacturing hit its highest in nearly four years. The yen fell against its major rivals as minutes from the Bank of Japan’s Jan. 22 policy meeting showed some board members saying that the central bank should provide a clearer explanation that an expected decline in second-quarter domestic growth was factored into its outlook. Japan is on a smooth path toward achieving the 2% inflation target and the Bank of Japan's decision to expand its loan programs will help buoy economic growth.

China's equity market dropped on concerns that the economy might be slowing after a gauge of Chinese manufacturing fell to a seven-month low. Hong Kong's inflation rose more than expected in January to the highest level since July last year. As per the information given by Census and Statistics Department, the composite consumer price index increased 4.6 percent year-on-year in January. The rate was forecast to rise marginally to 4.4 percent from 4.3 percent.