Post Session-Sensex ends 1.71% higher amid firm global cues Analysis for Jan 17, 2012

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

BSE SENSEX closed at 16466.05 up by 276.69 points or by 1.71 % and then NSE Nifty ended at 4967.3 up by 93.4 points or by 1.92 %.The BSE MIDCAP closed at 5655.32 up by 74.67 points or by 1.34 %, while the BSE SMLCAP ended at 6258.45 up by 66.42 points or by 1.07 %.The BSE Sensex touched intraday high of 16501.38 and intraday low of 16270.87 The NSE Nifty touched intraday high of 4975.55 and intraday low of 4904.

Soon after a gap up opening, the domestic benchmarks extended their gains amid positive cues from the Asian markets. Asian markets were trading higher on Tuesday as better than expected Chinese economic growth in the fourth quarter lifted sentiment. The Chinese economy expanded by 8.9 per cent in Q4,2011, year on year , higher than the 8.7 per cent estimated by analysts. However, the fourth quarter GDP growth was the slowest in ten quarters as export demand weakened amid the lingering Eurozone debt crises, and raised speculation that Chinese policymakers may resort to monetary easing in the near-term to boost lending and growth. A decline in French borrowing costs at a debt auction on Monday also lifted sentiment as investors looked beyond the downgrade of the nation's AAA rating last week. France sold 1.895 billion euro ($2.4 billion) of one-year notes at a yield of 0.406 percent on Monday, down from 0.454 percent on Jan. 9. Moreover, Moody's on Monday affirmed its AAA rating of France. The chief executive of the euro zone ' 's rescue fund said on Tuesday that the downgrade of the fund's ratings by S&P will not affect its lending capacity, which improved sentiment even further. On the domestic front, investors are betting that the RBI may cut interest rates this month after inflationary pressures eased to a two -year low. Moreover, better that expected quarterly results of IT giant HCL was also cheered by markets. The domestic benchmarks continued to surge higher during afternoon trade amid a pickup in investor sentiment. The benchmarks surged to the day's high in the final couple of hours of the session amid a firm opening in European markets. Finally, the benchmarks ended on a positive note, with the BSE Sensex and NSE Nifty notching up gains over 1.7% each. Among the BSE Sectoral indices, BSE Capital Goods and BSE Metal ended up 3.73% and 3.66% respectively.

Among the BSE Sensex stocks, Maruti Suzuki, Hindalco Industries, L&T, Tata Steel and RIL gained 10.48%, 6.04%, 5.23%, 5% and 3.78% respectively. Among the 30 Sensex stocks, there were 24 advances and 6 declines. On BSE out of total shares traded 3037, shares advanced were 1941 while 993 shares declined and 103 were unchanged.

On the economic front, India's inflation fell to its lowest level in two years in December 2011, raising hopes of a near-term rate cut by the RBI. The benchmark Wholesale-price index rose by 7.47 per cent, year on year in December 2011, down from the 9.11 per cent annual rise in November 2011.

On the global front, Singapore's exports expanded at a faster pace in December 2011, compared to the previous month as a surge in pharmaceutical exports offset a decline in overseas demand for electronic shipments, said a report by the Trade Promotion agency on Tuesday. Non-oil domestic exports rose by 9 per cent in December 2011, compared to the same month in the previous year.

On the Asian front, Shanghai Composite ended up 4.18%, Hang Seng gained 3.24% and Nikkei 225 ended up 1.05% on Tuesday.

On the European front, CAC 40 was up 1.35%, DAX was up 1.76% and FTSE 100 was trading higher by 0.85% on Tuesday.

On the Corporate front, HCL Technologies reported on Tuesday that its net profit for the October -December 2011 quarter rose by 43.3 per cent, year on year to Rs 572.7 crore. The stock ended up 4.61% at Rs 424.75 on the BSE.

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