style="color: #222222">The key Indian equity indices ended with smart gains on Thursday, extending the upswing for a second straight trading session. The sentiment in India was upbeat on expectations of some reform-oriented measures from the Government after the completion of Presidential election this week. A hike in diesel prices and revival of the FDI in multi-brand retail are among the few major reforms that the markets are looking at from the Prime Minister and his team.
Markets opened with a gap amid strong undercurrent across other Asian markets and overnight rally in the US markets. Although the markets managed to stay in the green for most part of the session, the NSE Nifty was stuck in a narrow 20 point trading band.
The Sensex ended at 17,278, up 94 points or 0.5% from the previous close. It had earlier touched a day’s high of 17,318 and a day’s low of 17,244. It opened at 17,288.
The NSE Nifty settled at 5,243, up 26 points or 0.5% from the last close. It touched a day’s low of 5,233 and a day’s high of 5,258.
The INDIA VIX on NSE declined by 6% to close at 16.38. It hit a day’s high of 17.44 and a day's low of 16.33.
The market breadth on the BSE was positive, with 1514 stocks ending higher and 1299 stocks closing in the red.
Shares of Hero MotoCorp, Kotak Mahindra Bank and Dr. Reddy’s weakened after their Q1 FY13 results failed to meet market estimates.
Bharti Airtel was a big loser along with SBI, BOB and PNB.
Cairn India, BPCL, Infosys, IDFC, BHEL, Sterlite Industries, Tata Power, Hindalco, Bajaj Auto, Axis Bank, Reliance Industries and Tata Motors were among the biggest leaders.
The BSE Small-Cap index and the BSE Mid-Cap index rose by 0.4% and 0.1%, respectively.
Most sectoral indices finished with a positive bias, led by IT, Consumer Durables and Oil & Gas indices. Power, Metals, Teck and Capital Goods indices too were up pretty smartly.
The Auto index and the FMCG index ended down. PSU, Banking and Pharma indices were subdued. The PSU Bank index on NSE was down more than 1%.
"The bad news for India is that Brent crude is hovering around US$105 a barrel amid signs of stability in the US economy and more stimulus measures out of China. Lingering concerns about the Middle-East uprising continues to boost crude oil futures," says Amar Ambani, Head of Research, IIFL.
"Pranab Mukherjee is all set to win the race to the Rashtrapati Bhavan, as the UPA has the right numbers on its side. Markets are more interested in what the Government would do on the policy front after the Presidential polls," he added.
"As far as domestic economic data is concerned, the consumer prices remained elevated and sticky in June. What's worse, food prices could spike in the wake of a weak monsoon. Fuel prices, particularly the regulated ones, might rise after the Presidential election. Hence, a rate cut is ruled out till there is any material improvement in the macro-economic fundamentals," Ambani said.
Shares of Maruti plummeted by ~9% to Rs 1,114 following overnight violence at its Manesar plant. Maruti shut the plant on Wednesday evening after workers and management clashed violently, according to reports. A charred body has been found on the factory premises, reports added. Maruti Suzuki will keep its Manesar plant shut on Thursday as well, according to reports.
Yesterday, the Nifty was seen bouncing back from the 100-Day moving average, forming a hammer pattern. Today, the Nifty ended above the hammer patter, forming a spinning top that indicated indecisiveness in the near term. The Nifty has to stay above 5170 to sustain the intermediate uptrend.
Global cues were pretty good. Asian markets were mostly higher.
Japan’s Nikkei 225 Stock Average advanced 0.8%. South Korea’s KOSPI rose 1.6%.
Australia’s S&P/ASX 200 Index climbed 2% to close at its highest in two months. Singapore’s Straits Times Index rose 0.4%, gaining for a fifth day.
Hong Kong’s Hang Seng Index rallied 1.7%, while China’s Shanghai Composite Index advanced 0.7%.
The MSCI Asia Pacific Index gained 1.5% to 117.5 as of 6:44 p.m. in Tokyo, headed for its biggest advance since June 29. Almost three shares rose for every two that fell.
US equity benchmarks closed up, spurred by encouraging technology results and positive data on the housing sector. US housing starts jumped in June to the highest level in four years.
Fed chairman Ben S. Bernanke reiterated the central bank’s resolve to breathe more life into the US economy if things get worse.
Bernanke doesn’t expect a double-dip recession in the US. However, the Fed Beige Book survey says the US economy slowed in June and early July. Overall US growth remains 'modest to moderate’.
Encouraging earnings reports from companies such Akzo Nobel and Sandvik helped lift the European markets on Thursday. Spain retained the spotlight as borrowing costs rose and demand fell at an auction of government debt.
A raft of earnings results from heavyweight companies supported the pan-European index. The Stoxx Europe 600 index was up 0.75%, on track to close at its highest level since April 3.