Benchmarks end near day’s high; Nifty regains 6,300 mark

Shrugging off weak global cues, Indian equity benchmarks exhibited a strong performance on Monday and ended the session near the highest level, with frontline gauges garnering gain of over half a percentage point. The up-move was mainly supported by rally in some blue-chip stocks on the back of strong third quarter earnings. Sentiments also remained upbeat on report that FII’s remained on their buying spree and increased their stake in major companies in the December quarter.

Earlier, markets made a sluggish opening due to somberness in the public sector oil marketing companies edging lower after Oil Minister M Veerappa Moily announced that the quota of subsidised cooking cylinders will be hiked to 12 from 9 per household. Increasing the limit to 12, which would result in an additional fuel subsidy burden of Rs 3,300 crore-5,800 crore for the government. Sentiments also remained dampened after Indian rupee depreciated on global dollar strength. Indian rupee was trading at 61.58 per dollar at the time of equity markets closing versus its Friday’s close of 61.54 per dollar.

Global cues remained choppy with most of the Asian equity indices ending in the red, as slightly better than expected Chinese data failed to impress investors. Chinese gross domestic product (GDP) expanded 7.7% last year, its slowest rate in 14 years, raising concern about the strength of the world’s number two economy. European markets too traded mostly in the red in early deals after Deutsche Bank posted a surprise pre-tax loss and miners slipping in the wake of data showing easing Chinese growth.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Both the benchmarks scaled past to the psychological levels of 21,200 (Sensex) and 6,300 (Nifty). Some support also came in after Reserve Bank of India decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 10000 crore on January 22 2014, in a bid to ease the strain on liquidity in the banking system. Rally in software and technology counters too supported the sentiments. Stocks like, Wipro, TCS, Infosys, HCL Technologies etc. all edged higher after eight IT exporters reported a combined 37% year-on-year growth in net profit and 27% net sales growth.

The NSE’s 50-share broadly followed index Nifty rose by over forty points to end above its psychological 6,300 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and forty points to end above its psychological 21,200 mark. Moreover, broader markets too traded with traction and ended the session in the green with gain of around a percentage point. The market breadth remained in favour of decliners, as there were 1,407 shares on the gaining side against 1,238 shares on the losing side, while 152 shares remained unchanged.

Finally, the BSE Sensex surged by 141.43 points or 0.67%, to settle at 21205.05, while the CNX Nifty gained 42.30 points or 0.68% to settle at 6,303.95.

The BSE Sensex touched a high and a low of 21221.37 and 21001.13, respectively. The BSE Mid cap index was up by 1.02%, while the Small cap index gained 0.79%.

The top gainers on the Sensex were TCS up 5.53%, Wipro up 3.77%, SSLT up 2.49%, ITC up 1.65%, and Tata Motors up by1.34%, on the flip side RIL down 1.70%, Coal India down 1.12%, Tata Power down 1.02%, Sun Pharma down 0.81%, and Bharti Airtel down by 0.79%,were the top losers on the index.

On the BSE Sectoral front IT up by 2.83%, Teck up by 2.50%, FMCG up by 1.08%, Bankex up by 0.75% and Auto up by 0.72%, were the top gainers, while Oil & Gas down by 0.96% and PSU down by 0.01%, were the only losers on the sectoral front.

Meanwhile, India’s iron ore exports fell by 28.16 per cent to 11.17 million tonnes (mt) during the April-December’ 2013 as against the 15.55 mt in the corresponding period last fiscal as the prevailing regulatory concerns are impacting the performance of country’s mining sector. The gloom in the sector's exports is expected to continue as long as government policy does not change.

Over the last few years, India’s iron ore exports have been hurt badly due to mining ban in Goa and Karnataka leading to drastic fall in domestic production. Furthermore, the rise in export duty to 30 per cent on iron ore including lumps and fines has also impacted the sector. Owing to the mining bans on iron ore in top producing states of Karnataka and Goa, India is currently exporting low grade iron ore (or fine) from Odisha, Jharkhand, Rajasthan and Madhya Pradesh. The bans, put in place as the government tried to clamp down on illegal mining, have cut the iron ore exports by around 85 percent, or 100 million tonnes, over the past two years. It has also reduced foreign exchange earnings by more than $17 billion in the same period. Further, India’s position in global iron ore exports has slipped to tenth from 3 earlier.

India’s total iron ore production in the current fiscal is likely to be around 140 mt, almost the same level as last year. Meanwhile, to improve the domestic iron ore production and exports, the government has planned to invite bids for about 15 million metric tonnes of iron ore inventory, which will be offered through online sales starting next month.

The CNX Nifty touched a high and low of 6,307.45 and 6,243.35 respectively.

The top gainers on the Nifty were TCS up by 5.51%, Wipro up by 3.85%, HCL Technologies up by 3.71%, IndusInd Bank up by 2.75%, and SSLT up by 2.44%, On the other hand, Reliance Industries down by 1.89%, Tata Power Company down by 1.15%, Grasim Industries down by 1.11%, Bharti Airtel down by 1.05%, and NMDC down by 0.93%, were the top losers.

The European markets were trading in red, France's CAC 40 was down by 0.06%, Germany's DAX was down by 0.32%, and United Kingdom's FTSE 100 was down by 0.04%.

The Asian markets concluded Monday’s trade mostly in red, with investors eyeing Chinese economic data including GDP, retail sales and industrial production. China’s annual growth eased to 7.7 percent in the fourth quarter as investment and demand flagged late in the year. That leaves growth in the Chinese economy at 7.7 percent for all of 2013, unchanged from revised levels in 2012. On a quarterly basis, gross domestic product (GDP) rose 1.8 percent from July-September, slower than expectations for 2.0 percent and a reading of 2.2 percent in April-June.

Meanwhile, average new home prices in 70 Chinese cities rose to another high year-on-year in December, though sequential gains have moderated, as recent curbs in some major cities hurt some consumers’ appetite for homes. For the 12th consecutive month, prices rose from a year earlier. Chinese Industrial Production fell to 9.7%, from 10.0% in the preceding month while Chinese Retail Sales fell to an annual rate of 13.6%, from 13.7% in the preceding month. Moreover, Chinese Fixed Asset Investment fell to a seasonally adjusted 19.6%, from 19.9% in the preceding month. Indonesia’s government is hoping to raise Rp 10 trillion ($833 million) from the sale of rupiah-denominated bonds with various tenors as part of its efforts to plug the country’s budget deficit.