YET ANOTHER IMPRESSIVE RALLY

Indian frontline equity indices managed to extend the exuberant performance on last trading day of the week and completed a hat-trick of strong performances by re-capturing the important psychological 5,050 (Nifty) and 16,800 (Sensex) bastions. The benchmark gauges showcased an astounding performance by vehemently garnering over two percentage points, the sharp rally looked even more prominent since it came on a day when equity indices across Asia largely showed signs of consolidation while European counterparts traded on a strong note, but failed to match the fervor with which the Indian bourses soared. After trading on a subdued note through the morning trades, the local benchmarks got a boost in the afternoon tracking the encouraging European market opening. Markets across the globe rallied as the German chancellor and French President made efforts to finalize a concrete plan to strengthen euro-zone stability rules that will include a proposal to change the European Union treaty to give European institutions intervention rights into national budgets as a way to avert the onerous sovereign debt crisis in the Euro-zone. Moreover, market mood also got buttressed by reports that the manufacturing sector in US strengthened at its strongest rate since June despite manufacturing activity across the world including China and Europe decelerating in the month of November, indicating that world's largest economy is gradually gaining momentum and not falling off the cliff. On the domestic front, investors relentlessly piled up positions in the rate sensitive banking index, for a second straight session thanks to the report released by global rating agency S&P's which affirmed investment grade with stable outlook to ten Indian banks, including SBI, Axis Bank, Bank of India, HDFC Bank, ICICI Bank, IDBI Bank, IOB, Syndicate Bank, UBI and Indian Bank. The beaten down power counter also witnessed hefty buying investors while the information technology shares too went up on hopes that the US' economy is on the road to recovery.
Earlier on Dalal Street, the benchmark got off to a sedate opening and even touched the intraday lows in the initial moments of trade tracking the unimpressive leads from Asian peers. The indices lacked fervor and continued to trade in a tight range in close proximity with the neutral line through the morning trades as marketmen took a breather after the previous session's sharp gains, ahead of the announcement of key US jobs report. However, the frontline gauges got a shot in the arm in early afternoon trades tracking the rally in European markets. Thereafter, the bourses treaded on a northbound journey which only ended with the close of trade. Finally the NSE's 50-share broadly followed index Nifty, went for yet another triple digit rally to settle at the crucial 5,050 support level while Bombay Stock Exchange's Sensitive Index or Sensex accumulated over three hundred fifty points and ended just below the psychological 16,850 mark. Moreover, broader markets too traded on a positive note but failed to match the fervor with which their larger peers rallied. On the BSE sectoral space, the rate sensitive Bankex sector remained the top gainer in the space with over three percent gains followed by the Power counter which too settled with over three percent gains. There were no sectoral laggards in the space and barring the motorcycle maker Hero Moto, there were no other stocks in the Sensex which ended in the red terrain. The markets soared on larger volumes of over Rs 1.27 lakh crore while the turnover for NSE F&O segment too remained on the higher side as compared to Thursday at over 1.13 lakh crore. The market breadth remained optimistic as there were 1757 shares on the gaining side against 1030 shares on the losing side while 123 shares remained unchanged.
Finally, the BSE Sensex jumped 363.38 points or 2.20% to settle at 16,846.83, while the S&P CNX Nifty climbed by 113.30 points or 2.29% to close at 5,050.15.
The BSE Sensex touched a high and a low of 16,888.84 and 16,428.66 respectively. The BSE Mid cap and Small cap index were up by 1.43% and 1.08% respectively.
The top gainers on the Sensex were Tata Power up 6.30%, Tata Motors up 4.57%, Tata Steel up 4.04%, Sterlite Industries up 3.79% and SBI up 3.70%. While, Hero MotoCorp down 0.30% was the only loser on the index.
The top gainers on the BSE sectoral space were, Bankex up 3.26%, Power up 3.04%, Metal up 2.49%, TECk up 2.44% and IT up 2.30%, while there is no loser on the BSE sectoral space. 
Meanwhile, global rating agency Standard & Poor's (S&P) has affirmed investment grade with 'stable' outlook to ten Indian banks, which includes State Bank of India (SBI), Axis Bank, Bank of India, HDFC Bank, ICICI Bank, IDBI Bank , Indian Overseas Bank, Syndicate Bank, Union Bank of India and Indian Bank.
The rating affirmation has come after applying new rating criteria for banks, which was announced last month. The rating has been retained at BBB- with the outlook at stable. The move is contrast with the another global rating firm Moody's, which has downgraded its rating on State Bank of India's financial strength by one notch to D+ on account of the lender's low Tier-I capital ratio and worsening asset quality. This downgrading by Moody's had evoked sharp decline in the shares of SBI. And it has got sharp reaction from the government and SBI who described the Moody's move as unwarranted as the Indian banks are better than their global counterparts.
In October a couple of days after Moody's lowered the outlook on SBI, S&P said that it has upgraded India's risk profile as measured by S&P's BICRA ( Banking Industry Country Risk Assessments) ranking. Within a month after the BICRA review, S&P has said that four banks, which include SBI, would have had a better credit rating if it was not constrained by the country rating. S&P does not assign a foreign currency rating higher than that of the sovereign since local bank assets are predominantly in India.
Geeta Chugh, Director, Standard & Poor's said 'the rating review factors in some tolerance towards deterioration in asset quality and compression in earnings. The stable outlook takes into account expected developments in the next 18 to 24 months'. By adding further Chugh said the standalone credit profiles of these four banks are higher than the sovereign. But since in India we do not assign bank ratings above the sovereign, the overall rating is in line with that of India.
Indian Bank's high standalone credit profile reflects its superior funding and liquidity position and it is the only public sector bank with an adequate capital position. A decade ago Indian Bank was described as a weak bank, has turned around dramatically and it is now an outlier because of its superior position as compared to rivals.
As per the S&P, on the whole Indian banks benefit from good economic growth prospects in the country. The growth in business is expected to enable the banks maintain sound financial health. 'Indian banks benefit from high levels of stable, core customer deposits.
The liquidity position for many Indian banks is strong and is underpinned by the growing retail deposit base, low reliance on short-term wholesale borrowings and a sizable amount of government bonds and central bank balances. Given the strong balance sheet growth ... capital is therefore a rating weakness for these banks,' the rating agency said. The government has infused Rs 3,100 crore into public sector banks in FY11. 'The government's planned capital injection in banks in 2012 and subsequently to ensure that the government owned banks have at least 8% tier I capital will be beneficial for these banks,' S&P added.
The S&P's rating affirmation for the Indian banks comes a day after S&P downgraded its rating for as many as 15 large banks globally, which includes large American banks like Bank of America, Citigroup and Goldman Sachs, which can be seen as another blow to the already-struggling banking sector in the weak global economic scenario. The rating agency has also downgraded rating of United States based banking giants such as JP Morgan, Morgan Stanley, Wells Fargo, whereas some European banking titans like Barclays, HSBC, Lloyds Banking Group, RBS (Royal Bank of Scotland) and Rabobank have also been downgraded.
The S&P CNX Nifty touched a high and low of 5,062.55 and 4,918.40 respectively.
The top gainers on the Nifty were Ambuja Cement up 8.99%, Tata Power up 6.51%, BPCL up 5.48%, IDFC up 5.08% and Tata Motors up 4.81%. On the flip side, Hero MotoCorp down 0.52% and Ranbaxy down 0.26% were the top losers on the index.
The European markets were trading in green. France's CAC 40 surged 1.57%, Britain's FTSE 100 up by 1.51% and Germany's DAX soared by 1.36%.

After rallying on a move by the world's central banks to ease funding strains among banks, most of the Asian equity indices witnessed consolidation on Friday ahead of the US nonfarm payrolls report later in the global day. However, most of the Asian equity indices opened on subdued note as market participants opted to book their profits after Thursday's sharp upsurge.

The Nikkei average edged higher over half a percent, with investors focused on whether the benchmark can hold above its 25-day moving average. However, Chinese benchmark declined over a percentage point as heavyweight banks fell in Shanghai on concerns about a decline in new yuan loans. Moreover, investors also remained worried over the sharp declines in real estate prices and the deceleration in manufacturing activity in November too underscored the fact that world's second largest economy is experiencing soft landing while, Taiwan stocks down over half a percent on Friday, dragged down by defensive plays such as glass and ceramics and cement counters.