After drifting to intraday lows in the late morning session, the benchmark equity indices have been steadily gaining ground and heading towards the psychological 5,200 (Nifty) and 17,200 (Sensex) resistances. The frontline indices traded with around half a percent gains as they extended the uptrend for third straight session after sentiments got support from encouraging weekly inflation data which showed that food inflation remained in the negative terrain for fourth straight week. The first day of a new Futures and Options series saw investors pile up hefty positions in the Consumer Durable and heavyweight Oil & Gas counter as the two sectors spurted over two percent each. Meanwhile all sugar stocks including Bajaj Hindustan, Shree Renuka and Balrampur Chini rallying sharply on reports that Prime Minister Manmohan Singh has formed expert committee to examine issues concerning the sugar industry and also the deregulation of the sector. However, the rate sensitive counters which have been in a stupendous uptrend of late witnessed some profit booking as the high beta Realty sector plummeted around two percent, being the top laggard in the BSE sectoral space followed by the Banking index which plunged about a percent. Meanwhile, earnings announcement from Canara Bank disappointed the street and got pounded by over two percent however Bank of India got commended for its third quarter performance as it rocketed over five percent post result announcement. In the global space, stock markets in Asia largely exhibited cautious trends while the European stock futures too are indicating a lower opening for the markets there as investors eye negotiations between private bondholders and the Greece's government over the nation's debt trouble.
Moreover, the broader markets traded on a strong note with over half a percent gains, outperforming their larger peers. The bourses rose on weak volumes of around Rs 0.50 lakh crore as it is the first day of a new F&O series. The market breadth on BSE was in favor of advances in the ratio of 1593:1014 while 100 scrips remained unchanged.
The BSE Sensex is currently trading at 17,160.24 up by 83.06 points or 0.49% after trading as high as 17,258.97 and as low as 17,106.57. There were 16 stocks advancing against 14 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap index rose 0.49% and Small cap soared 0.93%.
On the BSE sectoral space, Consumer Durables up 2.25%, Oil & Gas up 2.12%, Metal up 1.78%, TECk up 1.63% and IT up 1.41% were the major gainers while Realty down 1.74%, Bankex down 0.95%, FMCG down 0.54% and Capital Goods down 0.33% were the only losers in the space.
Tata Motors up 3.84%, Sterlite up 3.60%, Bharti Airtel up 2.92%, RIL up 2.78% and GAIL India up 2.38% were the major gainers on the Sensex, while Bajaj Auto down 3.52%, BHEL down 3.07%, DLF down 2.62%, Hero Moto down 2.31% and SBI down 1.25% were the major losers in the index.
Meanwhile, India's weekly food inflation, measured by the Wholesale Price Index (WPI), continued to remain in the negative terrain for the fourth consecutive week in the week ended January 14, 2012 as it moderated to -1.03 from its previous levels of -0.42% for the week ended January 7. The decline in inflation can largely be attributed to drop in the price of vegetables, especially onions and potatoes and wheat.
Owing to the sharp slump in the rate of price rise in the recent times, the Reserve Bank of India in a surprising move cut the cash reserve ratio for the first time since 2009 and hinted at future interest-rate cuts in its policy review meet earlier in the week. The RBI, even while maintaining its anti-inflationary stance attempted to ease the tight liquidity pressure on the economy by cutting the CRR and infusing Rs 32,000 crore into the Indian banking system. The central bank lowered its economic growth forecast for the current fiscal to 7% from 7.6% earlier, in addition credit growth estimates too were lowered to 16% from 18% while the central bank kept inflation forecast unchanged.
According to the data released by the Ministry of Commerce and Industry, the index for 'Food Articles' group rose by 0.3% to 191.4 from 190.9 for the previous week due to higher prices of bajra (4%), fish-marine and jowar (3% each), ragi and barley (2% each) and wheat, maize and milk (1% each). However, the prices of fruits & vegetables, egg, gram, moong and condiments & spices (1% each) declined.
The index for 'Non-Food Articles' group declined by 1.5 percent to 179.9 from 182.6 for the previous week due to lower prices of flowers (18%), raw cotton (7%), sunflower (3%) and raw rubber, castor seed and copra (1% each). However, the prices of gaur seed (17 %), groundnut seed (3%) and raw jute, coir fibre, linseed, soyabean, rape & mustard seed and mesta (1 % each) moved up.
As a result, the index for 'Primary Articles', which accounts for 20.12% of the WPI, remained unchanged at its previous week's level of 199.1 for the week ended January 14. The annual rate of inflation, calculated on point to point basis, stood at 1.89% for the period under consideration as compared to 2.47% 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 is currently trading at 5,187.15, higher by 28.85 points or 0.56% after trading as high as 5,217.00 and as low as 5,162.40. There were 28 stocks advancing against 22 declines on the index.
The top gainers on the Nifty were Sesa Goa up 6.13%, Power Grid up 4.07%, Sterlite up 4.04%, SAIL up 3.91% and Tata Motors up 3.90%.
Ranbaxy down 5.81%, BHEL down 3.35%, Bajaj Auto down 3.20%, Hero Moto down 2.09% and DLF down 2.03% were the major losers on the index.
In the Asian space, Hang Seng rose 0.17% and Seoul Composite advanced 0.39%.
On the flipside only Jakarta Composite eased 0.06%, Nikkei 225 slipped 0.09% and Strait Times inched down 0.05%.
Stock markets in China and Taiwan remained closed in observance of Lunar New Year holiday.
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