Mkt on a high; Sensex rallies 305 points, Nifty closes at 5726
27 November 2012
Equity benchmarks rallied around 2%, powered by FMCG, banking and metal shares, with market participants describing the surge as sentiment driven more than anything else. The 30-share BSE Sensex gained 305.07 points or 1.65% to close at 18842.08, and the 50-share Nifty rose 91.05 points or 1.62% to close at 5726.95.
The strength of the rally surprised most players as Indian market will be shut for trading on Wednesday for Guru Nanak Jayanti. Considering the uncertainty in global markets, few expected the bulls to take up overnight positions, risking adverse news flow internationally.
Brokers said global rating agency Moody's saying it had a stable outlook on India's rating, set the tone for the upmove.
"Our stable outlook on India's rating is based on our expectation that India's structural strengths - a high household savings rate and relatively competitive private sector - will ultimately raise the GDP growth rate from around 5.4% in FY 2013 to 6% or higher in FY 2014, with that higher growth being accompanied by improved fiscal and balance of payments metrics," Moody's said in its report.
The move provides some relief to the finance ministry, which is struggling to deliver on the fiscal numbers. But as the report itself says, though in not as many words, the threat of a downgrade still looms, with "domestic political turmoil" being one of the key risks.
And this is evident from the government's struggle to push through some of the reform measures it had announced less than two months back. Parliament failed to transact any business for the fourth day today despite government's efforts to break the logjam over FDI through an all-party meeting.
United Spirits, Suzlon, Unitech and Videocon Industries were the star performers of the day, gaining between 7-20%.
In the big movers among sectoral indices, FMCG, banking and metal gained between 1.4-2.1%.
With too many near term negatives on the horizon, most brokers are skeptical if the upmove can sustain. While there could be plenty of stock specific action, the broader market will continue to be stuck in a narrow range till there are some indications of an improvement in the macro-economic environment, they said.
It's been a strong day for the Indian equity market. The Nifty hits 5700 led by select rate sensitives and commodities. Broader markets too participated in the upmove. All BSE sectoral indices were trading in positive terrain.
The Sensex was up 267.24 points or 1.44% at 18804.25, and the Nifty was up 78.55 points or 1.39% at 5714.45. About 1650 shares advanced, 1062 shares declined, and 753 shares remain unchanged.
Top gainers on the Sensex were Sterlite Ind at Rs 102.35 up 3.96%, Bharti Airtel at Rs 321.80 up 3.69%, Hindalco at Rs 112.70 up 2.83%, HDFC Bank at Rs 680.25 up 2.70% and HDFC Rs 795 up 2.48%.
Bharti Airtel was up over 3 percent as Kenya's regulator cut mobile phone interconnection fee by 35%. Bharti is likely to be the beneficiary.
Reliance Power was up more than 3 percent as the company is seeking to revive Krishnapatnam Project.
Suzlon surged 11 percent as the lenders admit Suzlon Energy to CDR Cell seeking to restructure Rs 13,500 crore of company's debt ( Details )
IndusInd Bank was buzzing (up 2.4%) in trade on news that it is planning to raise up to 360 million dollars via a qip, in a price band of Rs 375-384 a share.
On the global front, it's a mixed session across Asia.
Indian benchmark indices continued to trade higher as buying was seen across the sectors. All BSE sectoral indices were trading positive. The BSE realty index outperformed the other sectoral indices; it was up 2.5%. Strong buying was also seen in banks, FMCG, capital goods and IT stocks.
Stocks likes ITC, Reliance, HDFC Bank, HDFC, Infosys and ONGC were positive contributors to the bourses.
The Sensex was up 243.85 points or 1.32% at 18780.86 while the Nifty was up 69.20 points or 1.23% at 5705.10.
About 1511 shares advanced, 767 shares declined, and 1187 shares remain unchanged.
Siddharth Bhamre of Angel Broking says that he is neither negative nor positive on the market . He says, "Not many people have written options, so it would be difficult to say where the expiry would be heading." He adds saying, "The 19 percent rollover in Bank Nifty is something which is not easy to digest. So, you might see activity picking up there as well."
ONGC is on buying radar today as it has gained 1% . ONGC Videsh, the overseas arm of state-owned ONGC will buy 8.4% stake from Concophillips in North Caspian production sharing agreement or Kashagan for USD 5 billion. The transaction subject to approvals is expected to be completed in the first half of next year.
Meanwhile, Asian markets are trading mixed after the euro-zone ministers reached a deal to release the next tranche of bailout funds to Greece. The Euro Group said it was committed to provide support Greece until it regains market access.
The rupee was higher in early trade after nearly nine days of losses, as a wave of risk appetite swept most Asian currencies and equities higher following the agreement reached to bail out Greece. A smart surge in Indian shares is also helping the beleaguered rupee.
Indian government bonds are a tad higher for the second consecutive day as the market remains hopeful the RBI will announce a bond buying program today evening, to alleviate the tight liquidity situation.
From currencies the euro climbed to 1.30 post the Greek deal and is still hovering around the 1.29 to 1.30 mark while the dollar was a touch lower against the Japanese Yen at 81.9
Commodities were relatively quiet with Brent Crude hovering around $111 per barrel and copper ending flat and gold around $1750.
The Sensex rises 1.05 percent and the Nifty gains 1 percent. Asian shares gain for the seventh day in a row on Tuesday while commodities rise after a deal on new debt targets for Greece and a political agreement on disbursing the next installment of aid.
However, a lot depends on the Indian government's ability to pass pending bills given that the opposition lawmakers have paralysed the parliament, demanding rollback of the government's flagship reforms announced in September.
Moody's says that the outlook on its Baa3 rating for India is stable, citing the country's large, diverse economy and strong gross domestic product growth as supportive of the rating.
Leading the gains: HDFC Bank rose 2 percent, Mortgage lender HDFC rises 2.05 percent while ITC is up 1.13 percent.
All BSE Sensex 30 stocks were trading in green, top gainers on the Sensex were HDFC at Rs 796.45 up 2.67%, HDFC Bank at Rs 679.50 up 2.59%, Jindal Steel at Rs 378.90 up 1.72%, Bajaj Auto at Rs 1,853.80 up 1.71% and Sterlite Ind at Rs 100 up 1.57%.
On the Nifty only Power Grid Corp was trading in negative, it was down 0.17% at Rs 120.20, top gainers on the Nifty were Jaiprakash Asso at Rs 92.50 up 3.82%, BPCL at Rs 324.10 up 2.74%, HDFC at Rs 796.50 up 2.69%, HDFC Bank at Rs 679.25 up 2.62% and Bajaj Auto at Rs 1,856 up 1.92%.
Most active shares on BSE were Federal Bank, Jet Airways, SpiceJet, United Spirits and Jindal Saw
Top gainers on the BSE Midcap were Jindal Saw, Apollo Hospital, Ybrant Digital, Unitech and Financial Tech were up 3-10%.
Top losers on the BSE Midcap were Shree Global Tr, Phoenix Mills, Shriram City, BF Utilities and Federal Bank were down 2-5%
The market opened stable mirroring Asia, which in turn was trading strong following the Greece rescue deal. On Monday, international lenders had agreed to bailout the near-bankrupt economy by lending urgently needed tranche of funds.
The package will reduce Greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020, via a package of steps.
Moving to India, the Sensex was up 107.45 points or 0.58% at 18644.46, and the Nifty was up 30.50 points or 0.54% at 5666.40. About 612 shares have advanced, 143 shares declined, and 2710 shares are unchanged.
However, investors look a bit nervous as most experts warn that the market gains may be capped on the back of parliament logjam and weak rupee. The market is also likely to be volatile ahead of F&O expiry on Thursday as trading is closed tomorrow.
Meanwhile, top gainers on the indices are Dr Reddys Labs, Sterlite Ind, ICICI Bank, Hindalco, Tata Steel, Sesa Goa, Jaiprakash Associates, Cairn India and Jindal Steel.
There were no losers on the Sensex, while on Nifty Power Grid Corp, Sun Pharma, Kotak Mahindra and NTPC were among major losers.
The US markets eased off their lows to close mixed, but gains were limited as concerns over the fiscal cliff. CBOE volatility index ended above 15.
Dow Jones Industrial Average was down 0.33% or 42.31 points at 12967.37. Nasdaq Composite rose 0.33% or 9.93 points at 2976.78. Standard & Poor's 500 was down 0.2% or 2.86 points at 1406.29.