Post Session-Sensex ends up 0.73% amid robust global cues Analysis for Jan 13, 2012

Today, the domestic benchmarks closed on a robust note amid supportive global cues. The Metal and Capital Goods space led the rally.

BSE SENSEX closed at 16154.62 up by 117.11 points or by 0.73 % and then NSE Nifty ended at 4866 up by 34.75 points or by 0.72 %.The BSE MIDCAP closed at 5582.34 up by 62.75 points or by 1.14 %, while the BSE SMLCAP ended at 6171.75 up by 87.48 points or by 1.44 %.The BSE Sensex touched intraday high of 16257.34 and intraday low of 16049.78 The NSE Nifty touched intraday high of 4898.85 and intraday low of 4834.2.

The positive closing of the US markets on Thursday lifted domestic sentiment during morning trade. On Thursday, the Dow Jones Industrial gained 21.57 points and closed at 12471.02. The S&P 500 gained 3.02 points and closed at 1295.5 and the Nasdaq closed at 2724.7, gaining 13.94 points over the previous day's closing. Soon after witnessing a gap up opening, the domestic benchmarks extended their gains amid robust cues from the Asian markets. Asian markets were trading higher on Friday amid easing concerns over the Eurozone debt crises. Sentiment was boosted after the Spanish government raised twice the amount targeted from the sale of bonds, while Italy's borrowing costs also fell on Thursday, a sign of a rebound in investor confidence in the Eurozone economies .Moreover, the European Central Bank said that business activity in the Eurozone was stabilizing, as the central bank kept its key benchmark rate unchanged at 1 per cent. The benchmarks pared off their gains and touched the day's low amid selling pressure in Oil& Gas stocks. However, the benchmarks rebounded from the day's low and surged higher during afternoon trade amid robust global cues. The benchmarks surged to the day's high amid positive cues from European markets. Moreover, falling food inflationary pressures also raised hopes that the RBI may cut interest rates in the near-term to support economic growth. The benchmarks pared off some of their gains in the last couple of hours of trading as concerns increased over the anemic pace of US economic recovery. Retail sales in the US expanded at the weakest pace in seven months in December 2011, a sign that demand remains subdued, a report said on Thursday. Finally, the benchmarks ended on a positive note, with the BSE Sensex and NSE Nifty notching up gains over 0.70% each. Among the BSE Sectoral indices, BSE Metal and BSE Capital Goods ended up 3.21% and 2.86% respectively.

Among the 30 Sensex stocks, Tata Steel, Coal India, L&T, NTPC and Jindal Steel & Power ended higher by 7.11%, 5.56%, 3.84%, 3.11% and 3.07% respectively. Among the Sensex stocks, there were 16 advances and 14 declines. On BSE out of total shares traded 2944, shares advanced were 1913 while 942 shares declined and 89 were unchanged.

On the economic front, food inflation continued to remain in negative territory as fresh arrivals of seasonal vegetables increased supplies and put downward pressure on prices. Food inflation stood at -2.90% in the week ended December 31, 2011.

On the global front, the Bank of Korea on Friday kept its benchmark rate unchanged for the seventh straight month amid rise in downside risks stemming from the Eurozone debt crises and financial market strains. The central bank decided to keep its benchmark interest rate or the 7-day repurchase rate steady at 3.25 per cent to boost credit growth.

On the Asian front, Shanghai Composite ended down 1.34%, Hang Seng closed up 0.57% and Nikkei 225 ended higher by 1.36% on Friday.

On the European front, CAC40 was up 1.27%, DAX was up 0.33% and FTSE 100 was trading higher by 0.21% on Friday.

On the Corporate front, wind turbine maker Suzlon Energy said that its German arm RE Power has bagged a contract to supply 10 wind turbines to a UK based firm. The stock ended up 8.72% at Rs 22.45 on the BSE on Friday.

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