Indian markets witnessed an extremely volatile
session on Wednesday, but finally managed to snap the trade with
splendid gains after three consecutive sessions of fall. Even the rise
in August inflation numbers were overlooked as it has been priced
already and the markets seemed prepared for another rate hike by the
Reserve Bank on Friday. All the sectoral gauges barring capital goods
made a positive closing, while the IT and technology sector performed
handsomely on the back of strengthening dollar. Though, the gloomy IIP
numbers still seemed haunting the capital goods sector which closed with
a quarter percent of losses. Initially the flat start of the markets
turned worrisome as the other Asian markets lost their traction fearing
that Greece may default ahead of the talks in euro zone to get any signs
of progress on taming debt crisis. Though the European stocks rose,
erasing earlier losses, amid speculation China may still offer support
for the region even after Premier Wen Jiabao said countries must not
rely on bailouts and acted as a catalyst for gains.
Back home the domestic markets made a cautious start and soon slipped into red lacking any supportive cues, as the Asian markets too lost their ground. The rupee slipping to its two year low weighed on the investors sentiments. Worries of European debt problems escalating into a banking crisis roiled global markets and pushed investors to the dollar's perceived safety and turning all the regional currencies weaker. However, the strength in dollar went in favour of IT stocks whose income is mainly dependent on exports and the rise in dollar improves their revenue. The trade remained choppy till noon as the rate of inflation, based on monthly WPI came higher against the street expectation at 9.78% for the month of August 2011 as compared to 9.22% in the previous month and 8.87% during the corresponding month last year. The development hardened the chances of RBI going for another rate hike in its mid quarter policy review on September 16. Finance minister Pranab Mukherjee statement that the government and the Reserve Bank of India together will be able to tackle soaring inflation, supported the reason. But the traders overlooked the numbers and rather concentrated on the developments in Europe and as soon as the European indices started inching higher, recovering their early losses, on reports that China is still willing to buy bonds of nations hit by the debt crisis, the Indian markets followed the trend and continued their surge, ending at the highest point of the day, with both the benchmarks regaining their crucial levels of 16700 (Sensex) and 5000 (Nifty). However the star of the day was IT sector that moved higher by over 4 percent on the heels of continuous fall in Indian rupee against dollar, they were closely followed by technology. Major IT companies like, Wipro, Infosys, HCL Technology all moved up by over 4 percent each. There was spurt seen in metal sector as well, JSW Steel, Tata Steel, SAIL, Jindal Steel all gained over 2 percent as the monitoring committee constituted by the Supreme Court started conducting e-auction for the liquidation of 25 million tonnes (mt) of iron ore stocks in Karnataka. However the broader markets underperformed their larger peers and closed only with modest gains.The volume too remained on the higher side from Tuesday
Finally, the BSE Sensex surged 242.16 points or 1.47% to settle at 16,709.60, while the S&P CNX Nifty rose by 71.60 points or 1.45% to close at 5,012.55.
The BSE Sensex touched a high and a low of 16,754.22 and 16,387.38 respectively. The BSE Mid cap and Small cap indices were up by 0.21% and 0.37% respectively.
The top gainers on the Sensex were Jaiprakash Associate up 6.39%, Infosys up 5.78%, Wipro up 4.34%, Hindustan Unilever up 3.34%, and HDFC Bank up by 2.69%.
On the flip side, Tata Motors down 1.92%, L&T down 1.52%, Cipla down 1.48%, Bharti Airtel down 0.70% and SBI down 0.47% were the top losers on the index.
The top gainers on the BSE sectoral space were IT up 4.27%, TECk up 2.92%, Metal up 1.90%, Bankex up 1.46% and Oil & Gas up 1.42%. While, Capital Goods (CG) down 0.36% was the only loser on the BSE sectoral space.
Meanwhile, India's headline inflation for the month of August stood at 9.78% which is the highest in last 13 months. All the three major segments of WPI contributed to this 13-month high level of inflation. This surge was mainly on the back of soaring prices of food and manufactured products. Inflation in manufactured products has been steadily rising since February this year, when it crossed the 6% mark. The government has also revised June inflation data, which increased to 9.51% from 9.44%, and this upward revision is done on the back of surge in prices of manufactured products.
According to the data released by the ministry of commerce and industry, the Wholesale Price Index for 'All Commodities' for the month August, 2011 rose by 0.6% to 154.9 (Provisional) from 154.0 (Provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 9.78% (Provisional) for the month of August, 2011 (over August, 2010) as compared to 9.22% (Provisional) for the previous month and 8.87% during the corresponding month of the previous year. Build up inflation in the financial year so far was 3.61% compared to a buildup of 3.52% in the corresponding period of the previous year.
On month-on-month basis, the index for Primary Articles rose by 0.9% to 199.6 (Provisional) from 197.9 (Provisional) for the previous month. The index for 'Food Articles' group rose by 0.5% to 193.7 (Provisional) from 192.8 (Provisional) for the previous month due to higher prices of fish-inland (15%), ragi (8%), gram (6%), poultry chicken and rice (2% each) and maize, coffee, bajra, masur and pork (1% each). However, the prices of fish-marine (5%), urad (4%), arhar (3%) and fruits and vegetables, barley and wheat (1% each) declined.
The index for 'Non-Food Articles ' group rose by 3.0% to 181.1 (Provisional) from 175.8 (Provisional) for the previous month due to higher prices of flowers (12%), gaur seed (11%), coir fibre, raw cotton and safflower (7% each), rape and mustard seed, groundnut seed, cotton seed and castor seed (4% each), fodder, niger seed, soyabean and raw silk (3% each) and copra and linseed (1% each). However, the prices of raw rubber (4%), sunflower (2%) and raw jute (1%) declined.
The index for 'Minerals' group declined by 0.4% to 306.6 (Provisional) from 307.7 (Provisional) for the previous month due to lower prices of barytes (16%), magnesite (12%), zinc concentrate (9%), iron ore (4%), sillimanite (3%) and crude petroleum (1%). However, the prices of copper ore (17%), bauxite (8%), limestone and dolomite (4% each) and steatite (1%) moved up.
The index for the fuel and power, which has weight of almost 15% in the WPI, rose by 0.8% to 167.0 (Provisional) from 165.6 (Provisional) for the previous month due to higher prices of furnace oil (6%), naphtha (4%), light diesel oil (3%) and bitumen, aviation turbine fuel and lubricants (2% each).
The index for Manufactured Products, which has weight of almost 65% in the WPI, rose by 0.4% to 138.3 (Provisional) from 137.7 (Provisional) for the previous month. Under this segments, major groups like, 'Food Products', Beverages, Tobacco & Tobacco Products', 'Wood & Wood Products', 'Chemicals & Chemical Products', 'Basic Metals, Alloys & Metal Products' and 'Basic Metals, Alloys & Metal Products' witnessed increase in prices in August. However, 'Textiles', 'Paper & Paper Products', 'Leather & Leather Products' and 'Non-Metallic Mineral Products' were the major group showing decline in prices for August.
With the recent inflation numbers, the trend is less likely to moderate from its current level. This is the ninth consecutive month when headline inflation has been above the 9% mark, raising concerns of the government and policy makers like RBI. The surge in the inflation number is almost close to the double digits, which is likely to put more pressure on the central bank to carry on its tightening stance on inflation.
However, experts from both government and private sector had urged RBI to take a pause on interest rates hike, as increasing rates has hampered India's economic and industrial growth. With the recent economic indicators like industrial production, which plunged to a 21-month low of 3.3% in July. On the other hand, economic growth during the April-June 2011 period stood at 7.7%, the slowest expansion rate in the past six quarters.
On the flip side, Sesa Goa down 2.42%, Tata Power down 2.07%, Cipla down 1.55%, L&T down 1.52% and Bharti Airtel down 1.06% were the top losers on the index.
The European markets were trading in green. France's CAC 40 surged 1.89%, Britain's FTSE soared by 1.12%, and Germany's DAX jumped 2.22%.
Most of the Asian equity indices finished the day's trade in the negative terrain on Wednesday as investors remained cautious ahead of a conference call between the leaders of Greece, Germany and France later in the day. Moreover, Japanese Nikkei closed at the lowest point in more than 29 months on Wednesday with a cut of over a percent, with major exporters down as the euro renewed its descent against the yen. However, Chinese market bounced back in the last trade after declining over a percentage point in the earlier afternoon session on the back of bargain hunting in blue chip stocks.
Back home the domestic markets made a cautious start and soon slipped into red lacking any supportive cues, as the Asian markets too lost their ground. The rupee slipping to its two year low weighed on the investors sentiments. Worries of European debt problems escalating into a banking crisis roiled global markets and pushed investors to the dollar's perceived safety and turning all the regional currencies weaker. However, the strength in dollar went in favour of IT stocks whose income is mainly dependent on exports and the rise in dollar improves their revenue. The trade remained choppy till noon as the rate of inflation, based on monthly WPI came higher against the street expectation at 9.78% for the month of August 2011 as compared to 9.22% in the previous month and 8.87% during the corresponding month last year. The development hardened the chances of RBI going for another rate hike in its mid quarter policy review on September 16. Finance minister Pranab Mukherjee statement that the government and the Reserve Bank of India together will be able to tackle soaring inflation, supported the reason. But the traders overlooked the numbers and rather concentrated on the developments in Europe and as soon as the European indices started inching higher, recovering their early losses, on reports that China is still willing to buy bonds of nations hit by the debt crisis, the Indian markets followed the trend and continued their surge, ending at the highest point of the day, with both the benchmarks regaining their crucial levels of 16700 (Sensex) and 5000 (Nifty). However the star of the day was IT sector that moved higher by over 4 percent on the heels of continuous fall in Indian rupee against dollar, they were closely followed by technology. Major IT companies like, Wipro, Infosys, HCL Technology all moved up by over 4 percent each. There was spurt seen in metal sector as well, JSW Steel, Tata Steel, SAIL, Jindal Steel all gained over 2 percent as the monitoring committee constituted by the Supreme Court started conducting e-auction for the liquidation of 25 million tonnes (mt) of iron ore stocks in Karnataka. However the broader markets underperformed their larger peers and closed only with modest gains.The volume too remained on the higher side from Tuesday
Finally, the BSE Sensex surged 242.16 points or 1.47% to settle at 16,709.60, while the S&P CNX Nifty rose by 71.60 points or 1.45% to close at 5,012.55.
The BSE Sensex touched a high and a low of 16,754.22 and 16,387.38 respectively. The BSE Mid cap and Small cap indices were up by 0.21% and 0.37% respectively.
The top gainers on the Sensex were Jaiprakash Associate up 6.39%, Infosys up 5.78%, Wipro up 4.34%, Hindustan Unilever up 3.34%, and HDFC Bank up by 2.69%.
On the flip side, Tata Motors down 1.92%, L&T down 1.52%, Cipla down 1.48%, Bharti Airtel down 0.70% and SBI down 0.47% were the top losers on the index.
The top gainers on the BSE sectoral space were IT up 4.27%, TECk up 2.92%, Metal up 1.90%, Bankex up 1.46% and Oil & Gas up 1.42%. While, Capital Goods (CG) down 0.36% was the only loser on the BSE sectoral space.
Meanwhile, India's headline inflation for the month of August stood at 9.78% which is the highest in last 13 months. All the three major segments of WPI contributed to this 13-month high level of inflation. This surge was mainly on the back of soaring prices of food and manufactured products. Inflation in manufactured products has been steadily rising since February this year, when it crossed the 6% mark. The government has also revised June inflation data, which increased to 9.51% from 9.44%, and this upward revision is done on the back of surge in prices of manufactured products.
According to the data released by the ministry of commerce and industry, the Wholesale Price Index for 'All Commodities' for the month August, 2011 rose by 0.6% to 154.9 (Provisional) from 154.0 (Provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 9.78% (Provisional) for the month of August, 2011 (over August, 2010) as compared to 9.22% (Provisional) for the previous month and 8.87% during the corresponding month of the previous year. Build up inflation in the financial year so far was 3.61% compared to a buildup of 3.52% in the corresponding period of the previous year.
On month-on-month basis, the index for Primary Articles rose by 0.9% to 199.6 (Provisional) from 197.9 (Provisional) for the previous month. The index for 'Food Articles' group rose by 0.5% to 193.7 (Provisional) from 192.8 (Provisional) for the previous month due to higher prices of fish-inland (15%), ragi (8%), gram (6%), poultry chicken and rice (2% each) and maize, coffee, bajra, masur and pork (1% each). However, the prices of fish-marine (5%), urad (4%), arhar (3%) and fruits and vegetables, barley and wheat (1% each) declined.
The index for 'Non-Food Articles ' group rose by 3.0% to 181.1 (Provisional) from 175.8 (Provisional) for the previous month due to higher prices of flowers (12%), gaur seed (11%), coir fibre, raw cotton and safflower (7% each), rape and mustard seed, groundnut seed, cotton seed and castor seed (4% each), fodder, niger seed, soyabean and raw silk (3% each) and copra and linseed (1% each). However, the prices of raw rubber (4%), sunflower (2%) and raw jute (1%) declined.
The index for 'Minerals' group declined by 0.4% to 306.6 (Provisional) from 307.7 (Provisional) for the previous month due to lower prices of barytes (16%), magnesite (12%), zinc concentrate (9%), iron ore (4%), sillimanite (3%) and crude petroleum (1%). However, the prices of copper ore (17%), bauxite (8%), limestone and dolomite (4% each) and steatite (1%) moved up.
The index for the fuel and power, which has weight of almost 15% in the WPI, rose by 0.8% to 167.0 (Provisional) from 165.6 (Provisional) for the previous month due to higher prices of furnace oil (6%), naphtha (4%), light diesel oil (3%) and bitumen, aviation turbine fuel and lubricants (2% each).
The index for Manufactured Products, which has weight of almost 65% in the WPI, rose by 0.4% to 138.3 (Provisional) from 137.7 (Provisional) for the previous month. Under this segments, major groups like, 'Food Products', Beverages, Tobacco & Tobacco Products', 'Wood & Wood Products', 'Chemicals & Chemical Products', 'Basic Metals, Alloys & Metal Products' and 'Basic Metals, Alloys & Metal Products' witnessed increase in prices in August. However, 'Textiles', 'Paper & Paper Products', 'Leather & Leather Products' and 'Non-Metallic Mineral Products' were the major group showing decline in prices for August.
With the recent inflation numbers, the trend is less likely to moderate from its current level. This is the ninth consecutive month when headline inflation has been above the 9% mark, raising concerns of the government and policy makers like RBI. The surge in the inflation number is almost close to the double digits, which is likely to put more pressure on the central bank to carry on its tightening stance on inflation.
However, experts from both government and private sector had urged RBI to take a pause on interest rates hike, as increasing rates has hampered India's economic and industrial growth. With the recent economic indicators like industrial production, which plunged to a 21-month low of 3.3% in July. On the other hand, economic growth during the April-June 2011 period stood at 7.7%, the slowest expansion rate in the past six quarters.
The
anti-inflationary stance adopted by RBI had failed to control
inflation. On the effectiveness of monetary policy, R Gopalan, Economic
Affairs Secretary at the Finance Ministry said that the RBI's monetary
tightening has had only a limited success in curbing inflation. The
S&P CNX Nifty touched high and low of 5,026.15 and 4,917.40,
respectively.
The top gainers of the Nifty were JP Associate up 6.85%, Infosys up 6.07%, Wipro up 4.36%, HCL Tech up 4.08% and BHEL up 3.82%. On the flip side, Sesa Goa down 2.42%, Tata Power down 2.07%, Cipla down 1.55%, L&T down 1.52% and Bharti Airtel down 1.06% were the top losers on the index.
The European markets were trading in green. France's CAC 40 surged 1.89%, Britain's FTSE soared by 1.12%, and Germany's DAX jumped 2.22%.
Most of the Asian equity indices finished the day's trade in the negative terrain on Wednesday as investors remained cautious ahead of a conference call between the leaders of Greece, Germany and France later in the day. Moreover, Japanese Nikkei closed at the lowest point in more than 29 months on Wednesday with a cut of over a percent, with major exporters down as the euro renewed its descent against the yen. However, Chinese market bounced back in the last trade after declining over a percentage point in the earlier afternoon session on the back of bargain hunting in blue chip stocks.
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