Boisterous bulls after a day's rest, went all guns blazing on Thursday taking the benchmark equity indices to six week high levels, beyond the important 5,000 (Nifty) and 16,600 (Sensex) bastions which the key gauges could not conquer despite repeated attempts in previous sessions. After a day of consolidation, investors kept piling up positions with conviction as sentiments got buttressed by not only encouraging weekly inflation data from the domestic front but also from the strength in markets across the globe. Market participants remained in enthusiastic mood right from the start of trade, tracking sanguine leads from the Asian markets. A slew of encouraging developments such as overnight jump in US equities, encouraging US homebuilders' confidence report and IMF's plans to expand its lending capacity by as much as $500 billion in order to prevent fallout from the Euro-zone crisis and avert a global recession, bolstered investors risk taking confidence in the session. Investors' morale also got a boost in the session after weekly food inflation continued to languish in the negative terrain for the third straight week in the period ended January 7 as it stood at -0.42%. Stocks from the rate sensitive counters like high beta realty, banking and automobile remained in demand after the upbeat inflation numbers as investors speculated that the RBI would abstain from its monetary tightening measures and shift its focus to spur economic growth. Also the encouraging third quarter earnings announcement from banking major HDFC Bank and two-wheeler heavyweights like Hero Moto and Bajaj Auto kept marketmen busy piling up positions. However, the information technology pocket continued to face the ire of investors after IT bellwethers like Infosys and TCS' earnings disappointed the street and spurred worries that slowdown in major software and technology importing regions like Europe and the US will impact future earnings. Meanwhile, the European markets too traded with a positive bias as investors shifted their focus to French and Spain's debt auction and outcome of two day talks between Greece and its private creditors to thrash out a bond swap deal.
Earlier on Dalal Street, the benchmark got off to a gap-up opening tracking the impressive leads from Asian markets as encouraging overnight leads from the US triggered a strong rally across the region. The frontline indices spurted to the highest levels in the opening moments of trade and kept hovering above the crucial 5,000 (Nifty) and 16,600 (Sensex) levels for most part of the session. There appeared some selling pressure in the early afternoon trades when the indices slipped to intraday lows after the Bajaj Auto quarterly result was announced. However, the bulls were quick in regaining the lost momentum and brought the key gauges above the crucial levels to eventually snap the session around the high point of the day. The NSE's 50-share broadly followed index Nifty, surged by about a percent to settle above the crucial 5,000 support level while Bombay Stock Exchange's Sensitive Index, Sensex rallied close to two hundred points and ended just below the psychological 16,650 mark. Moreover, the broader markets went home with gains of around one and half a percent, moving in tandem with their larger peers. On the BSE sectoral space, Realty counter remained the top gainer in the space with strong gains of over three and half a percent while, the Metal sector too gained a lot of traction and settled with close to three percent gains. On the flipside, the IT and TECk counters remained the top laggard with moderate cuts. The markets surged on stronger volumes of over Rs 1.32 lakh core while the turnover for NSE F&O segment also remained on the higher side as compared to that on Wednesday at over Rs 1.14 lakh crore. The market breadth remained positive as there were 1809 shares on the gaining side against 982 shares on the losing side while 133 shares remained unchanged.
Finally, the BSE Sensex surged 192.27 points or 1.17% to settle at 16,643.74, while the S&P CNX Nifty climbed by 62.60 points or 1.26% to close at 5,018.40.
The BSE Sensex touched a high and a low of 16,662.06 and 16,572.10 respectively. The BSE Mid cap and Small cap indices up by 1.43% and 1.24% respectively.
The major gainers on the Sensex were Sterlite Industries up 6.77%, Tata Power up 6.08%, Hindalco up 5.06%, DLF up 4.62% and NTPC up 4.19%. While, BHEL down 2.71%, M&M down 1.68%, Bharti Airtel down 0.83%, Infosys down 0.71% and ITC down 0.24%, were the major losers on the index.
On the BSE sectoral space, Realty up 3.54%, Metal up 2.81%, Power up 2.43%, Bankex up 1.85% and PSU up 1.51% were the top gainers, while IT down 0.32%, TECk down 0.29% and FMCG down 0.02% were top losers.
Meanwhile, India's weekly food inflation, measured by the Wholesale Price Index (WPI), continued to languish in the negative terrain for the third straight week for the week ended January 7, 2012 but rose to -0.42% from its previous levels of 2.90% for the week ended December 31. The rise in inflation can largely be attributed to rising demand for primary articles including both food and non-food items.
The sharp slump in the rate of price rise of food items in last two months is evident because of the high statistical base of the last year. The Indian central bank is scheduled to meet for its third quarterly monetary policy review on January 24 and it is widely expected that the Reserve Bank may refrain from its aggressive monetary tightening measures as the WPI inflation has primarily been on a declining trend.
According to the data released by the Ministry of Commerce and Industry, the index for 'Food Articles' group rose by 0.1% to 190.9 from 190.8 for the previous week due to higher prices of jowar and maize (3% each), bajra, masur and poultry chicken (2% each) and barely, arhar, moong and fish-marine (1% each). However, the prices of tea (2%) and egg and condiment & spices (1% each) declined.
The index for 'Non-Food Articles' group rose by 0.9% to 182.6 from 181 for the previous week due to higher prices of gaur seed (4%), flowers, rape & mustard seed, soyabean and niger seed (3% each), raw cotton (2%) and raw jute and linseed (1% each). However, the prices of raw rubber (4%), sunflower (3%) and castor seed (1%) declined.
As a result, the index for 'Primary Articles', which accounts for 20.12% of the WPI, rose by 0.3% for the week ended January 7 to 199.1 from 196.6 for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 2.47% for the period under consideration as compared to 0.51% for the previous week.
Meanwhile, the index for Fuel & Power group, which carries a weightage of 14.91% in WPI remained unchanged at its previous closing levels of 172.7 in the week while annual rate of inflation calculated on point to point basis too stood unchanged at 14.45% in the first week of the year 2012.
The S&P CNX Nifty touched a high and low of 5,023.80 and 4,991.40, respectively.
The top gainers on the Nifty were Reliance Infra up 10.46%, Tata Power up 6.54%, Sterlite Industries up 6.30%, JP Associates up 6.06% and NTPC up 4.86%.
On the flip side, BHEL down 2.69%, M&M down 1.47%, Bharti Airtel down 1.33%, Siemens down 0.89% and Infosys down 0.84% were the top losers on the index.
The European markets were trading in green. France's CAC 40 up 0.82%, Britain's FTSE 100 gained 0.16% and Germany's DAX surged by 0.06%.
Asian shares rose to their one-month high on Thursday following Wall Street gains amid positive US economic data and on hopes that the International Monetary Fund would boost its resources to help tackle the euro zone debt crisis. However, Australian dollar took a hit after a mixed jobs report disappointed markets. While Japan's Nikkei average rose as much as 1.4% to a five-week high. Asian credit markets were calm. Chinese market was up with report that China's central bank is allowing a limited increase in first-quarter lending by the five biggest banks and the nation's banking regulator is weighing a plan to relax capital requirements.
Markets in Taiwan remained closed for a public holiday.
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