The Nifty and the Sensex continues its gains for the second trading session of 2013.
The Nifty closed at 5,993 after briefly touching 6,006 intra-day, up 43 points.
The Sensex closed at 19,714, up 133 points.
“‘Nifty has hit 6,000 levels after a gap of two years. We witnessed one of the best years for FII inflows in 2012 with total inflows crossing $24 billion. Markets bounced back sharply with a more than 27% gain. The political leadership ushered new reforms when the country was facing the threat of a sovereign downgrade. We expect this rally to continue in 2013 on the back of rate cuts, revival in growth and fiscal consolidation. We expect 13-15 per cent earnings growth and a P/E rerating from 14 to 16x,” said Varun Goel, head PMS-Karvy.
The volatility index, India Vix, closed flat at 13.71.
Bajaj Auto, J P Associates, Maruti, BPCL and IDFC were the top five Nifty gainers while Asian Paints, Bharti Airtel, ITC, M&M and Wipro were the top losers.
The Nifty and the Sensex gained in excess of 0.75 per cent on New Year’s Day led by bullishness in and banking stocks.
A deal to delay implementation of the fiscal cliff in the US also added to the sentiment.
The Nifty closed at 5951 up 46 points while the Sensex closed at 19581 up 154 points.
“While the fiscal cliff has been likely averted, the deal has only postponed the spending cuts by two months, while implementing higher taxes on incomes of individuals earning above a threshold. Further negotiations will be needed to resolve the spending cut issues and even the existing agreement has to be passed by the House of Representatives, which will likely happen,” said Dipen Shah, Head –PCG Research Kotak Securities.
“The markets overlooked the worse-than-expected domestic data on current account deficit, core sector growth and fiscal deficit. With stability possibly returning in the developed markets, focus will now shift to corporate results and also to the domestic reforms initiatives which, we believe, should be taken up and implemented, for the markets to move up in a sustained manner,” he added.
An Edelweiss Financial Services report expects current account deficit(CAD) for FY13 at $74 billion (4 per cent of GDP). In the coming quarter (Q3), CAD is expected to remain elevated as export slowdown continued and gold imports picked up.
However, we do foresee improvement in Q4 as improving external demand helps exports and as gold imports normalize after seasonal uptick, said the report while revising its earlier CAD estimate of $ 65bn (-3.3% of GDP).
Volatility was down 8.43 per cent and the volatility index India Vix closed at 13.69.
By Abhishek Vishnoi
MUMBAI (Reuters) - The BSE Sensex rose on Tuesday after the U.S. averted the looming 'fiscal cliff' in a last-minute deal with hopes of a rate cut by the Reserve Bank of India beginning to gather steam, leading to gains in bank shares.
Analysts say with the New Year Day holidays, U.S. Congress still has time to draw up legislation and backdate it to avoid the harsh fiscal measures including tax hikes and spending cuts, which many fear could cripple the world economy in 2013.
While Indian stocks are expected to remain firm in January tracking expectations of a rate cut by the Reserve Bank of India, negative local fundamentals, namely twin deficits and sticky inflation, may limit the outperformance in the near term.
"While the macro environment both domestically and globally does not inspire much confidence, at the micro level things are looking good," said Atul Kumar, Senior Fund Manager at Quantum Asset Management Company Pvt. Ltd.
The fiscal deficit is likely to exceed the target set by the government due to higher subsidy burden, which can also turn into a constraint for the RBI to cut rates, added Kumar.
The benchmark Sensex rose 0.79 percent, or 154.10 points, to end at 19,580.81 after earlier hitting its highest level intraday since Apr. 27, 2011.
The broader NSE Nifty rose 0.77 percent, or 45.75 points, to end at 5,950.85.
Option traders see the probability of the 50-stock index Nifty inching closer to 6,200 levels in the January derivative series which ends on January 31.
Banking stocks including ICICI Bank rose on expectations of a cut in interest rates by the Reserve Bank of India in January.
ICICI Bank ended up 1.8 percent, while State Bank of India ended 1.7 percent higher.
Shares in Indian steel companies including Tata Steel gained on expectations of better realisations as China plans to scrap a 40 percent export duty on metallurgical coke, a steelmaking raw material, from Tuesday.
Tata Steel gained 2.3 percent while Jindal Steel and Power ended 3 percent higher.
Shares in Glenmark Pharmaceuticals gained 1.9 percent after U.S. health regulators approved Salix Pharmaceuticals Ltd's drug to treat diarrhoea in HIV/AIDS patients on qantiretroviral therapy, a combination of medicines used to treat HIV infection.
Aurobindo Pharma Ltd rose 2.14 percent after it said in a statement that it has got final approvals from U.S. FDA for Rizatriptan Benzoate tablets and the product is ready for launch.
However, among stocks that fell, oil marketing companies fell on fading hopes of a hike in diesel price any time soon, dealers said.
Indian Oil Corp. fell 1.2 percent while Hindustan Petroleum Corporation ended 0.4 percent lower.
(Editing by Sunil Nair)
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The Sensex has ended (provisional) at 19,581 - up 154 points. Nifty ended up 45 points at 5,950.
(Updated at 1425 hrs)
The market sentiment was boosted by US policy makers reaching an agreement late on Monday, 31 December 2012, to avert the imminent fiscal cliff of wide-reaching tax hikes and deep spending cuts in the world's biggest economy. The Sensex, after opening at 19,513 touched a high of 19,623. The 30-share Sensex is now up 159 points at 19,585 and the 50-share Nifty up 46 points at 5,951.
The Reserve Bank of India (RBI) after trading hours on Monday said that India's current account deficit (CAD) worsened to $22.3 billion in Q2 September 2012 from of $16.4 billion in Q1 June 2012. CAD in Q2 September 2012 stood at 5.4% of GDP, higher than 4.2% of GDP in Q2 September 2011.
Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for December 2012 tomorrow, 2 January 2013. Investor focus is on the guidance provided by the management for the year ending March 2013 to gauge the earnings outlook. Infosys will be announcing results on January 11, 2013.
Markets in Asia remained closed as will the US markets today. Wall Street on Monday rallied to yearly gains on expectations that US leaders will reach budget deal. The agreement would raise taxes on wealthy Americans, extend unemployment benefits, and delay across-the-board spending cuts but would let a 2% payroll-tax cut lapse and do nothing to address the US borrowing limit.
" The pychological mark of 6000 has been a stern resistance for markets. On closing basis 5949 if held onto for next couple of sessions, it would pave way for a rally towards 6181," said Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services.
All the sectoral indices traded in the positive zone. BSE realty index gained 2.3% to 2160. Metal, bankex and capital goods added 1-2% each.
Jindal Steel added 2.5% to Rs 459. Hindalco, Tata Steel and Sterpite surged 2-2.5% each.BHEL was up 2%, followed by banking names such as SBI and ICICI Bank. HUL, Coal India, Bharti Airtel were some of the other key gainers.
However, NTPC slipped 0.7% to Rs 155. ONGC and Bajaj Auto showed some weakness and were trading flat.
The BSE India Sensitive Index, or Sensex, advanced 0.8 percent to 19,580.81, the highest close since April 25, 2011. Aluminum producer Hindalco Industries Ltd. (HNDL) jumped 2.8 percent, leading metal stocks higher after prices climbed in London. Bharat Heavy Electricals Ltd. (BHEL) increased for a third day, adding 1.9 percent.
The legislation, passed this morning, would make permanent the tax cuts for most U.S. households that expired at midnight, continue expanded unemployment benefits and delay automatic spending cuts for two months. The Sensex climbed 26 percent in 2012, the most since an 81 percent surge in 2009, as the Indian government took steps to open the economy to foreign investment and domestic stocks attracted Asia’s biggest overseas inflows.
“This agreement clears the air to a large extent and gives more confidence to emerging-market equity investors,” Aneesh Srivastava, who oversees $475 million as the chief investment officer at IDBI Federal Life Insurance Co. in Mumbai, said by phone. “Indian stocks need support not just from local policymakers but also from global markets for the rally to continue.”
The U.S. budget accord emerged from an agreement yesterday between Vice President Joe Biden and Senate Minority Leader Mitch McConnell to stave off more than $600 billion in tax increases and federal spending cuts, or the so-called fiscal cliff, set to begin this month. The 157-page bill now moves to the House for consideration.
The U.S. took in 11 percent of India’s exports in the six months ended September 2011, commerce ministry data show.
The rupee gained on optimism any success in preventing tax increases in the U.S. will spur fund flows into emerging-market assets. The currency rose 0.6 percent to 54.6850 per dollar in Mumbai at the close, data compiled by Bloomberg show. It slid 3.5 percent last year, the worst performance after Indonesia’s rupiah among Asia’s 10 most-used currencies excluding the yen.
India’s 10-year bonds increased the most in five months, sending the yield to a two-year low, after the government deferred a debt auction previously scheduled for this week. Bonds also gained after the central bank said in a separate statement that it plans to purchase 80 billion rupees of debt at an open-market auction on Jan. 4.
The MSCI India Materials Index (MXIN0MT) increased the most among the 10 industry groups of the MSCI India Index, adding 1.7 percent. Hindalco jumped 2.8 percent to 134.15 rupees, its highest close since March 21. Sterlite Industries (India) Ltd. (STLT), the largest copper producer, added 1.9 percent to 118.90 rupees. Three-month delivery copper rose 0.6 percent on the London Metal Exchange yesterday. Zinc, tin and aluminum also climbed. Jindal Steel & Power Ltd. (JSP) rallied 3 percent to 461.05 rupees, making it the best performer on the Sensex today.
A gauge of industrial stocks was the second-biggest gainer among the sectoral indexes. Bharat Heavy, the largest Indian power-equipment maker, rose 1.9 percent to 232.60 rupees. Larsen & Toubro Ltd. (LT) added 1.1 percent to 1,624.90 rupees.
The S&P CNX Nifty Index (NIFTY) on the National Stock Exchange of India added 0.8 percent to 5,950.85, the highest close since January 2011. The BSE Mid-Cap Index climbed 1.2 percent to 7,197.58, the highest level in more than 20 months. India VIX, which measures the cost of protection against declines in the Nifty, sank 8.4 percent to 13.69, the most since Oct. 22.
Prime Minister Manmohan Singh overhauled policies starting mid-September, raising diesel prices and opening the economy to more foreign investment to lift growth from September quarter’s 5.3 percent, which matched a three-year low. The policies led to foreigners plowing a net $24.5 billion into local stocks in 2012, the highest among 10 Asian markets tracked by Bloomberg.
Last year’s rally has driven Sensex’s valuation to 15.5 times estimated earnings, the highest levels since March, data compiled by Bloomberg show. The MSCI Emerging Markets Index trades at a multiple of 12.1.
Other markets in the region are closed today.
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The Nifty and the Sensex closed marginally in the red on Monday amid volatile trading.
The Nifty closed at 5,905, down three points while the Sensex closed at 19,427, down 18 points.
Volatility was high and the volatility index, India Vix, closed at 14.95, up 10 per cent.
“On the macro façade, numerals of monthly surveys of manufacturing and service sectors will be in focus,” said Rajesh Agarwal, Head-Research, Eastern Financiers.
“Auto and cement stocks will be in the limelight as companies from these two sectors will start unveiling monthly sales data for December 2012,” he added.
All the other broader indices closed in the green on the NSE and the BSE.
Among sectoral indices, IT/Teck, FMCG and Capital Goods closed marginally in the red on the BSE.
On the NSE, the CNX Finance, Pharma, FMCG, IT, Infra and Service indices closed marginally in the red.
PNB, DLF, ACC, GAIL and Tata Power were the top five Nifty gainers while HCL Tech, ITC, TCS, IDFC and L&T were the top losers.