Indian benchmarks extended their Diwali celebrations on the last
trading session of the week. It looked like the bears just ceased to
exist as there were little evidence of profit booking through the day.
The festivities got bigger after the two session break in observance of
the festival of lights as frontline equity showcased an awe-inspiring
performance by vivaciously rallying by a massive three percentage points
in the session and re-conquering the 5,350 (Nifty) and 17,800 (Sensex)
bastions. Sentiments got bolstered after the European policy makers
approved a three-pronged agreement which will help in easing Greece's
debt burden and strengthen banks and the European bailout fund. As per
the tripartite agreement, private investors would accept a loss of 50%
on Greek bonds, which will cut Greece's debt burden to 120% of GDP by
2020, banks will be forced to raise more capital to protect them against
losses resulting from any future defaults and approved a crucial
mechanism to boost the EFSF to an estimated 1 trillion euro. Friday's
sharp rally for the local benchmarks appeared even more marvelous given
the fact that the gains came on a day when equity indices in Europe
traded on a sluggish note while none of the counterparts in the Asian
region were able to match the colossal gains that domestic indices
settled with. Morale of investors globally also was buttressed because
of an impressive US economic report which showed that the GDP gathered
additional steam and expanded at a better than expected pace of 2.5%
annual rate in the third quarter, easing concerns that the US was on the
verge of a double-dip recession. Back home, marketmen even went on to
overlook the discouraging weekly inflation data which accelerated to the
highest levels in over six months despite the 13 interest-rate hikes by
Indian central bank since March 2010. However, some somberness was
evident in downstream PSU oil marketing companies like BPCL, HPCL and
IOC because of around three percent spurt in international crude oil
prices overnight.
Earlier on Dalal Street, the Sensex got off to a gigantic over six hundred point gap up opening as investors rejoiced after Euro-zone policy makers approved a concrete blueprint to rescue the region from debt trouble. In no time the indices tapered to lower levels but continued to tread in a tight range thereafter. The frontline gauges hit intraday lows in early afternoon trades after the unimpressive European market opening but a sudden spurt in sentiments was witnessed thereafter in mid-noon trades which helped the indices to settle around more than two month high levels by the end. Eventually the NSE's 50-share broadly followed index Nifty, jumped by over three percent and settled above the crucial 5,350 support level while Bombay Stock Exchange's Sensitive Index Sensex garnered over five hundred points and closed above the psychological 17,800 mark. Moreover, the broader markets failed to match the fervor with which their larger peers rallied and settled with around a percent gains. On the BSE sectoral space, the metal counter showed sharp upmove and surged close to six percent amid global rally in commodity prices on hopes of an optimistic global economic outlook. While the rate sensitive banking pocket too appeared in resurgent mood after reports that the ministry of finance has indicated that it is likely to approve capital infusion into public sector banks, including State Bank of India by mid-November. In the current financial year, the capital requirement of PSU banks has been estimated between Rs 10,000-20,000 crore. Though there were no sectroal laggards in the space, but individual stocks like Maruti Suzuki, Bharti Airtel and Bajaj Auto failed to settle in the green terrain. Despite the initial days of a new F&O series, the markets surged on large volumes of over Rs 1.2 lakh crore while the turnover for NSE F&O segment remained on the lower side as compared to Tuesday at over 0.89 lakh core. The market breadth remained optimistic as there were 1728 shares on the gaining side against 1139 shares on the losing side while 92 shares remained unchanged.
Finally, the BSE Sensex surged by 515.97 points or 2.92% to settle at 17,804.80, while the S&P CNX Nifty soared by 158.90 points or 3.05% to close at 5,360.70.
The BSE Sensex touched a high and a low of 17,908.13 and 17,671.86 respectively. The BSE Mid cap surged 1.51% and Small cap index climbed by 0.88%.
The major gainers on the Sensex were Hindalco up 10.88%, Sterlite up 8.80%, DLF up 7.95%, Jaiprakash Associates up 7.90% and Jindal Steel up 7.53%. While, Maruti Suzuki down 7.99%, Bharti Airtel down 0.25% and Bajaj Auto down 0.11% were the major losers on the index.
The major gainers on the BSE sectoral space were Metal up 6.34%, Realty up 5.34%, Bankex up 3.73%, Capital Goods up 3.56% and Auto up 2.87%. While there were no losers on BSE sectoral space.
Meanwhile, food inflation, which entered the double-digits zone again, for the week ended October 15, the Minister of State (independent charge) for Consumer Affairs, Food and Public Distribution KV Thomas, said that the hovering food prices may not come down substantially from current level but the prices may not increase from the current level. Food minister's comment had come after the Reserve Bank of India's (RBI) 13th hike in its key policy rates to control inflation. India's weekly food inflation measured by the Wholesale Price Index (WPI) is at 6-month high, sustaining the pressure on overall inflation and policy makers.
'My experience over the past one year is that inflation in 15 essential food items, except for a few pulses and edible oils, has remained steady. Other than these, prices of paddy, wheat and sugar and other items have been stable. This is one of the reasons for my optimism that food prices will stabilize over the next few months,' said Thomas.
The inflation has spread from food items to the manufactured products, which accounts for more than 65% of total the WPI. The RBI, which increased its key policy rates by 25 basis points, expects inflation to decline by December and chances of another rate hike is relatively low.
The Minimum Support Prices (MPS) and increase in prices of petroleum products, which increased the cost of transportation, are responsible for the current high food inflation. The Cabinet Committee on Economic Affairs increased the prices of wheat by Rs 164 a quintal to Rs 1,285. The prices of Chana and Masur were also increased by Rs 700 and Rs 550 each per quintal to Rs 2,800 each.
The S&P CNX Nifty touched high and low of 5,399.70 and 5,322.80, respectively.
The top gainers on the Nifty were Hindalco up 10.72%, DLF up 8.23%, Jaiprakash Associates up 8.04%, R Infra up 8.03% and Sterlite Industries up 8.02%. On the flip side, BPCL down 3.15%, Maruti down 1.63%, GAIL down 0.65%, Bharti Airtel down 0.52% and Seas Goa down 0.49% were the top losers on the index.
The European markets were trading in mixed. France's CAC 40 lost 0.34%, Britain's FTSE 100 down by 0.17%, and Germany's DAX advanced by 0.08%.
Asia pacific stocks, extending an advance that started on Thursday, surged to an eight week high on Friday, after European leaders put forward a plan to contain the regions sovereign-debt and banking crisis that included a 50% write down on Greek government debt held by private bondholders and a boost to the region's bailout fund. Asian shares rallied for a second day on Friday with many regional markets hitting highs as investor confidence grew after the talk of world's largest economy, US slipping into recession got a halt after the quarterly data illustrated the largest jump for the US economy in more than a year, which also sparked a overnight gain at Wall Street.
The US economy grew at its fastest pace in a year in the third quarter as consumers and businesses stepped up spending, creating momentum that could carry into the final three months of the year. Hong Kong's Hang Seng Index after surging to its highest close in more than a month settled with gains of over 1.5%. Brokerages including Guotai Junan Securities Company, Mizuho Securities Asia and Barclays Plc said China may cut banks' reserve requirements before the end of this year. In Seoul, gains were underpinned by Samsung Electronics which advanced 2.3%. The firm said that its third-quarter net profit fell 23% due to weakness at its display unit, but the results weren't as weak as analysts had forecast. Samsung's third-quarter loss was offset by strength in the tech major's mobile-phone business, which unseated Apple Inc. last quarter as the world's largest seller of smart phones by unit.
Earlier on Dalal Street, the Sensex got off to a gigantic over six hundred point gap up opening as investors rejoiced after Euro-zone policy makers approved a concrete blueprint to rescue the region from debt trouble. In no time the indices tapered to lower levels but continued to tread in a tight range thereafter. The frontline gauges hit intraday lows in early afternoon trades after the unimpressive European market opening but a sudden spurt in sentiments was witnessed thereafter in mid-noon trades which helped the indices to settle around more than two month high levels by the end. Eventually the NSE's 50-share broadly followed index Nifty, jumped by over three percent and settled above the crucial 5,350 support level while Bombay Stock Exchange's Sensitive Index Sensex garnered over five hundred points and closed above the psychological 17,800 mark. Moreover, the broader markets failed to match the fervor with which their larger peers rallied and settled with around a percent gains. On the BSE sectoral space, the metal counter showed sharp upmove and surged close to six percent amid global rally in commodity prices on hopes of an optimistic global economic outlook. While the rate sensitive banking pocket too appeared in resurgent mood after reports that the ministry of finance has indicated that it is likely to approve capital infusion into public sector banks, including State Bank of India by mid-November. In the current financial year, the capital requirement of PSU banks has been estimated between Rs 10,000-20,000 crore. Though there were no sectroal laggards in the space, but individual stocks like Maruti Suzuki, Bharti Airtel and Bajaj Auto failed to settle in the green terrain. Despite the initial days of a new F&O series, the markets surged on large volumes of over Rs 1.2 lakh crore while the turnover for NSE F&O segment remained on the lower side as compared to Tuesday at over 0.89 lakh core. The market breadth remained optimistic as there were 1728 shares on the gaining side against 1139 shares on the losing side while 92 shares remained unchanged.
Finally, the BSE Sensex surged by 515.97 points or 2.92% to settle at 17,804.80, while the S&P CNX Nifty soared by 158.90 points or 3.05% to close at 5,360.70.
The BSE Sensex touched a high and a low of 17,908.13 and 17,671.86 respectively. The BSE Mid cap surged 1.51% and Small cap index climbed by 0.88%.
The major gainers on the Sensex were Hindalco up 10.88%, Sterlite up 8.80%, DLF up 7.95%, Jaiprakash Associates up 7.90% and Jindal Steel up 7.53%. While, Maruti Suzuki down 7.99%, Bharti Airtel down 0.25% and Bajaj Auto down 0.11% were the major losers on the index.
The major gainers on the BSE sectoral space were Metal up 6.34%, Realty up 5.34%, Bankex up 3.73%, Capital Goods up 3.56% and Auto up 2.87%. While there were no losers on BSE sectoral space.
Meanwhile, food inflation, which entered the double-digits zone again, for the week ended October 15, the Minister of State (independent charge) for Consumer Affairs, Food and Public Distribution KV Thomas, said that the hovering food prices may not come down substantially from current level but the prices may not increase from the current level. Food minister's comment had come after the Reserve Bank of India's (RBI) 13th hike in its key policy rates to control inflation. India's weekly food inflation measured by the Wholesale Price Index (WPI) is at 6-month high, sustaining the pressure on overall inflation and policy makers.
'My experience over the past one year is that inflation in 15 essential food items, except for a few pulses and edible oils, has remained steady. Other than these, prices of paddy, wheat and sugar and other items have been stable. This is one of the reasons for my optimism that food prices will stabilize over the next few months,' said Thomas.
The inflation has spread from food items to the manufactured products, which accounts for more than 65% of total the WPI. The RBI, which increased its key policy rates by 25 basis points, expects inflation to decline by December and chances of another rate hike is relatively low.
The Minimum Support Prices (MPS) and increase in prices of petroleum products, which increased the cost of transportation, are responsible for the current high food inflation. The Cabinet Committee on Economic Affairs increased the prices of wheat by Rs 164 a quintal to Rs 1,285. The prices of Chana and Masur were also increased by Rs 700 and Rs 550 each per quintal to Rs 2,800 each.
K V Thomas said, 'on the one hand,
we say farmers must benefit and so give them cheap water supply, cheap
electricity, higher MSP.....In Kerala, for example, we say farmers must
be given higher prices for coconut, copra and natural rubber-....then we
grumble about high coconut oil and tyre prices. How can these be
controlled..
Experts are of the view that the large scale purchases of food grains
by the government for subsidized supply to low income families reduces
their availability in the local market and it becomes costlier for the
middle class. On the other hand, in spite non-procurement of pulses a
constant rising of benchmark prices makes them dearer. The government
purchases around 30% of total food grain production every year for the
distribution via ration shops. The S&P CNX Nifty touched high and low of 5,399.70 and 5,322.80, respectively.
The top gainers on the Nifty were Hindalco up 10.72%, DLF up 8.23%, Jaiprakash Associates up 8.04%, R Infra up 8.03% and Sterlite Industries up 8.02%. On the flip side, BPCL down 3.15%, Maruti down 1.63%, GAIL down 0.65%, Bharti Airtel down 0.52% and Seas Goa down 0.49% were the top losers on the index.
The European markets were trading in mixed. France's CAC 40 lost 0.34%, Britain's FTSE 100 down by 0.17%, and Germany's DAX advanced by 0.08%.
Asia pacific stocks, extending an advance that started on Thursday, surged to an eight week high on Friday, after European leaders put forward a plan to contain the regions sovereign-debt and banking crisis that included a 50% write down on Greek government debt held by private bondholders and a boost to the region's bailout fund. Asian shares rallied for a second day on Friday with many regional markets hitting highs as investor confidence grew after the talk of world's largest economy, US slipping into recession got a halt after the quarterly data illustrated the largest jump for the US economy in more than a year, which also sparked a overnight gain at Wall Street.
The US economy grew at its fastest pace in a year in the third quarter as consumers and businesses stepped up spending, creating momentum that could carry into the final three months of the year. Hong Kong's Hang Seng Index after surging to its highest close in more than a month settled with gains of over 1.5%. Brokerages including Guotai Junan Securities Company, Mizuho Securities Asia and Barclays Plc said China may cut banks' reserve requirements before the end of this year. In Seoul, gains were underpinned by Samsung Electronics which advanced 2.3%. The firm said that its third-quarter net profit fell 23% due to weakness at its display unit, but the results weren't as weak as analysts had forecast. Samsung's third-quarter loss was offset by strength in the tech major's mobile-phone business, which unseated Apple Inc. last quarter as the world's largest seller of smart phones by unit.
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