POSITIVE START

Buoyed by firm global cues, Indian equity benchmarks, snapping their four days losing streak have made a positive start with Sensex re-conquering its crucial 19,700 mark. Overnight, the US markets made a smart bounce back after a sharp plunge in the last session. There was value buying supported by service sector growth data from domestic front as well as from across the globe. The ISM report showed that activity in the US service sector continued to expand in the month of January. Optimism in Asian counters too boosted the sentiments with Japanese market surging near its four year high after Bank of Japan Governor Masaaki Shirakawa said that he will step down on March 19, three weeks before his term was due to expire, that may help Japanese Prime Minister Shinzo Abe's campaign for aggressive easing.

Back home, some amount of support also came in from PSU sector after an empowered group of ministers (EGoM) led by finance minister P Chidambaram met to finalise the timeline and pricing of the NTPC issue. The NTPC disinvestment is expected to raise Rs 12,000 crore. However, the stock of NTPC declined by over a percent ahead of the proposed share sale on February 7. Power stocks too remained on the investors' radar as the Cabinet Committee of Economic Affairs (CCEA) gave an 'in-principle' nod for the coal pool pricing mechanism. While, in other development, Centre and the states agreed that states would invite open competitive bids for procuring electricity in the next six months to bridge supply shortfall.

All the sectoral indices opened higher with the Realty, Metal and Consumer Durables leading with about a percent gains. Public Sector Undertaking, Power, Technology and Healthcare indices were the other notable movers in the opening trades, while there were no losers on the BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,212 shares on the gaining side against 624 shares on the losing side while 86 shares remain unchanged.

The BSE Sensex opened at 19,737.77; about 77 points higher compared to its previous closing of 19,659.82, and has touched a high and a low of 19767.25 and 19695.23respectively.

The index is currently trading at 19711.25, up by 51.43 points or 0.26%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 65.19% stocks advancing against 30.39% declines. The broader indices were outperforming with benchmarks; the BSE Mid cap and Small cap indices rose 0.65% and 0.67% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.54%, Metal up by 1.05%, Consumer Durables up by 0.90%, PSU up by 0.59% and Power up by 0.56% while, there were no losers in the space.

The top gainers on the Sensex were Tata Steel up by 1.65%, Maruti Suzuki up by 1.48%, Tata Power up by 1.37%, Coal India up by 1.09% and Jindal Steel up by 1.00%.

On the flip side, Hindustan Unilever was down by 1.36%, NTPC was down by 1.03%, Hero MotoCorp  was down by 0.88%, Cipla was down by 0.45% and HDFC Bank was down by 0.37% were the top losers on the Sensex.

Meanwhile, driven by rising foreign orders, India's services sector logged a growth at its strongest pace in year during January. Marking a 45-month expansionary sequence, the seasonally adjusted HSBC Services Business Activity Index came at 57.5 in January, up from 55.6 in the previous month. The 50 mark separates growth from contraction and the index has held above that level for over a year now, even though Country appears set to finish the 2012-13 Fiscal Year with its slowest economic growth rate in a decade.

As has been the case since May 2009, the volume of incoming new work in the Indian private sector rose during January. With manufacturing and services companies both registering sharp growth, the overall rate of expansion was steep and the fastest in Eleven months. Whereas, growth in the manufacturing sector eased, services new orders rose at the fastest pace in 18 months.
The HSBC India Composite Output Index posted 56.3 in January, unchanged from December's reading. Meanwhile, the activity in the Indian private sector improved during December for the forty-fifth successive month. The survey also showed input and output prices rising at a similar pace to the prior month, though much weaker than a year ago.
Meanwhile, the new business sub-index jumped to 58.3, the highest since August 2011, prompting firms to step up the pace of hiring. Payroll numbers in the Indian private sector rose for the eleventh month running in January, amid evidence of increased volumes of incoming new work. That said, the rate of job creation was only slight and broadly in line with that seen in December.

Further, January data signaled broadly steady inflation reading even as input prices continuing the trend that started in April 2009, rose during January. Furthermore, optimism was signaled by service providers in India during January, with approximately 42% of services companies predicting overall activity at their units to increase, with just 3% forecasting a decrease.

The report further highlighted broadly steady Inflation readings amidst simmering fuel, raw material and labour cost pressures that underscore the need for RBI to approach policy easing with caution.

The S&P CNX Nifty opened at 5,988.05; about 31 points higher as compared to its previous closing of 5,956.90, and has touched a high and a low of 5,990.90 and 5,967.70 respectively.

The index is currently trading at 5,977.40, up by 20.50 points or 0.34%. There were 40 stocks advancing against 10 declines and one remains unchanged on the index.

The top gainers of the Nifty were Bank of Baroda up by 2.31%, IDFC up by 2.12%, Maruti Suzuki up by 1.64%, UltraTech Cement up by 1.59% and Tata Steel up by 1.58%.

On the flip side, Hindustan Unilever down by 1.35%, NTPC down by 1.06%, Siemens down by 0.96%, Hero MotoCorp down by 0.84% and Ranbaxy Laboratories down by 0.57%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng surged 129.26 points or 0.56% to 23,277.79, Jakarta Composite rose 23.00 points or 0.51% to 4,502.44, Nikkei 225 soared 342.62 points or 3.10% to 11,389.54, Taiwan Weighted added 37.06 points or 0.47% to 7,924.00 and KOSPI Composite was up by 1.11 points or 0.06% to 1,939.29.

On the flip side, Straits Times slipped 0.36 points or 0.01% to 3,272.30, Shanghai Composite dipped 1.27 points or 0.05% to 2,431.86 and KLSE Composite was down by 13.70 points or 0.84% to 1,619.65.