WINNING STREAK CONTINUES

The Indian equity indices extended their winning streak for yet another day, what started on a flat note turned into a rally in the latter part of the day with benchmarks adding over half a percent by end of the trade. The improving condition in international markets prompted investors to go for buying in fundamentally strong stocks mainly the blue chips. The global cues have been supportive for last two days for the Indian markets and have aided to the gains. The whole global market was in jubilant mood ahead of the much anticipated, US President Barak Obama's speech where he is likely to introduce a package of $300 billion to $400 billion for creating jobs and spurring economic growth to new levels. Earlier on stimulus hopes and after a German court backed the country's role in bailing out European nations along with Italy's approval for a controversial austerity package led Wall Street rise sharply on Wednesday, though the Asian markets were not so convinced but they too joined the party and barring the Chinese markets all ended in green. While the European markets that made a cautious start slowly gained momentum ahead of the interest-rate decisions from the European Central Bank and the Bank of England.
Back home, the domestic markets got a cautious but positive start however they slipped into red in the early morning as the investors worried of global economic strength and domestic rate hike fears opted to book profit after the recent rally. At one point of time the benchmarks lost their crucial psychological levels of 17000 (Sensex) and 5100 (Nifty) but based on strong fundamentals the markets started recovering from the lows of the day and soon re-entered the green. However, lacking any major trigger the trade remained choppy till noon and the modest decline in inflation too was unable to cheer the markets as the headline inflation still remains over 9% and that may prompt the RBI to go for another rate hike in its mid quarterly policy review on September 16. India's food inflation measured by Wholesale Price Index (WPI) moderated to 9.55% for the week ended August 27 from 10.05% in the last week. Finance Minister Pranab Mukherjee expressed hope that it would moderate further after the end of the festive season, though high prices of non-food items continue to be an area of concern. The mixed start of the European markets too created a bit of panic in the markets and they once again drifted towards the lows of the day. But afterwards a spurt was seen in the heavyweight Reliance Industries after the CAG report was tabled in parliament, which boosted the morale of the investors. Though, the report did not said that the capital expenditure for KG-D6 being raised from $2.4 billion proposed in 2004 to $8.8 billion in 2006 was unjustified or inflated but it lambasted Petroleum Ministry for allowing Reliance Industries to retain its entire eastern offshore KG-D6 block in contravention of the Production Sharing Contract. Some choppiness emerged at the higher levels in the last hour of trade with selling in metal and PSU stocks that prevented the markets go further high. In the sectoral gauges IT and Consumer durable saw the return of buying fervor while oil and gas mainly led by RIL too gathered gains of around one and half a percent for the day. The markets moved higher despite lower volume of around Rs 1.06 lakh crore while the turnover for NSE F&O segment too remained on lower side as compared to Wednesday at over 0.93 lakh crore. The market breadth remained in favour of advances with 1733 shares on the gaining side against 1099 shares on the losing side while 113 shares remained unchanged.
Finally, the BSE Sensex gained 100.54 points or 0.59% to settle at 17,165.54, while the S&P CNX Nifty rose by 28.60 points or 0.56% to close at 5,153.25.
The BSE Sensex touched a high and a low of 17,209.66 and 16,987.37 respectively. The BSE Mid cap and Small cap indices were up by 0.26% and 0.72% respectively.
The top gainers on the Sensex were Cipla up 2.94%, Reliance up by 2.62%, Tata Motors up by 2.59%, Wipro up by 2.58% and ICICI Bank up by 2.51%.
On the flip side, Jindal Steel down 1.57%, Coal India down 1.35%, Tata Power down 1.34%, Tata Steel down 1.05% and BHEL down 0.97% were the top losers on the index.
The top gainers on the BSE sectoral space were, Consumer Durables (CD) up 1.99%, IT up 1.52%, Oil & Gas up 1.42%, TECk up 1.00% and Capital Goods (CG) up 0.88%. While, Metal down 0.69%, PSU down 0.28%, FMCG down 0.27% and Power down 0.23% were the top losers on the BSE sectoral space.
India's food inflation measured by Wholesale Price Index (WPI) has registered marginal decline. It moderated to 9.55% for the week ended August 27 from 10.05% in the last week. However, despite the moderation from last week, the food inflation still continues to hover above 9% for the fifth consecutive week.
As per the data released by Ministry of Commerce and Industry, the index for 'Food Articles' group rose by 0.1% to 195.1 (Provisional) from 195.0  (Provisional) for the previous week due to higher prices of poultry chicken (3%), moong (2%) and masur, urad, gram, bajra, arhar, fruits & vegetables, fish-inland and condiments & spices (1% each).  However, the prices of fish-marine and tea (4% each), maize, pork and ragi (2% each) and barley (1%) declined.

The index for 'Non-Food Articles'  group rose by 1.1% to 183.3 (Provisional) from 181.3  (Provisional) for the previous week due to higher prices of flowers (9%), sunflower (5%), raw rubber  (3%), fodder and raw silk (2% each) and gaur seed, groundnut seed and raw cotton (1% each).  However, the prices of linseed (1%) declined. As a result, the index for primary articles group which has the highest weightage of 20.12% in WPI rose by 0.2% to 201.4 (Provisional) from 200.9 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 13.34% (Provisional) for the week ended August 27 as compared to 12.93% (Provisional) for the previous week August 20.

Meanwhile, the index for Fuel and Power group which has the weightage of 14.91% in WPI, remained unchanged at their previous week's level of 166.8 (Provisional) and 12.55 percent (Provisional) for the week ended August 27.
The marginal decline in food inflation is in line to Finance Minister's expectation of moderation in food inflation. However, this half percent decline in food inflation is less likely to give any major relief to the government. The Reserve Bank of India which has increased its key policy rates for 11 times, since March 2011, may go for another hike in its mid-quarter monetary policy review, in view of as the headline inflation hovering near two digit mark.
The S&P CNX Nifty touched high and low of 5,169.25 and 5,098.25, respectively.
The top gainers of the Nifty were Cairn up 4.20%, Ranbaxy up 4.03%, ICICI Bank up 3.42%, Cipla up 3.23% and Reliance up 2.88%.
On the flip side, SAIL down 2.84%, Jindal Steel down 1.61%, Tata Steel down 1.50%, BHEL down 1.22% and NTPC down 1.07% were the top losers on the index.
The European markets were trading in green. France's CAC 40 and Britain's FTSE gained 0.70%, and Germany's DAX rose by 0.78%.
All the Asian equity indices barring Shanghai Composite and Hang Seng extended their rally mood and finished the day's trade in the positive terrain on Thursday tracking strong gains in Wall Street, as positive news out of Europe tempered the underlying debt concerns in the euro-zone. Seoul Composite surged by 0.72 percent after the Bank of Korea left its policy rate steady at 3.25% for the third straight month, as expected, due to the heightened global uncertainty while, Japanese index pared its early gains due to worse-than-expected core machinery orders for July dragged heavy machinery shares lower. Japan's core machinery orders fell 8.2% in July from June, compared with expectations for a 4.0% fall.