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Markets gain on easing inflation, China GDP growth

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Indian benchmark share indices gained for the fourth straight session to end nearly 2% higher on Tuesday after India’s headline inflation for December fell to a year low and China's better-than-expected fourth quarter GDP growth boosted market sentiment.

India’s headline inflation for December 2011 fell below 9% for the first time since December 2010 to a two-year low of 7.47%. China’s Oct-Dec GDP growth at 8.9% was better than analyst’s expectations.

The 30-share ended at 16,466 up 277 points or 1.7% and the 50-share ended at 4,967 up 93 points or 1.9%. The Sensex and the Nifty touched an intra-day high of 16,501 and 4,976, respectively. 

On the global front, Asian markets ended firm post Chinese fourth quarter GDP data. China's gross domestic product for the Oct-Dec quarter, although at a 2.5-year low, was better-than-expected at 8.9%. Shanghai, Nikkei and Straits Times, Hang Seng, Kospi and Taiwan surged between 1-4%. European markets opened firm during late noon trades.  The CAC-40, DAX and FTSE-100 were up between 1-2%.

Back home, all the sectoral indices ended in positive terrain. Among Sensex shares, index heavyweight RIL and L&T were the rising between 3-5%.

On the sectoral front, BSE Capital Goods and Metal indices spurted by almost 4% each. Counters like Realty, Oil & Gas, Auto, Power and PSU gained between 2-3%.

Rate sensitive counters were up as December headline inflation which fell to a two-year low of 7.47% may prompt the Reserve Bank to cut policy rates at its policy review meet on January 24.

Metal shares zoomed on better-than-expected Chinese economic growth data. Hindalco Industries, Sterlite, Tata Steel, Coal India and Jindal Steel & Power spurted between 2-6%.

Interest rate sensitive Realty segment extended their gains for straight sixth trading session on expectations that the RBI will start cutting interest rates in the coming months to support the slowing economy. DLF zoomed by nearly 2%.

Among Auto shares, Maruti Suzuki was the top Sensex gainer, accelerating by 10.48% on reports that the company has raised prices of all its vehicles by 0.3% to 3.4% due to unfavorable foreign exchange movements and hike in commodity prices. M&M, Tata Motors and Bajaj Auto gained by nearly 2% each.

In the banking space, SBI gained nearly 1% on proposed capital infusion by the government and and HDFC Bank recouped some of yesterday’s losses to gain nearly 1%. However, ICICI Bank plunged by nearly 1%. HDFC ended marginally lower.

Among software segment, Infosys gained by nearly 1% on short covering after the stock was beaten down last week as the company had lowered its dollar revenue growth guidance for the fourth quarter. TCS ended marginally lower ahead of Q3 earnings today. HCL Technologies advanced over 5% after the company announced robust Q2 earnings. Wipro spurted by nearly 2%.

The broader markets too performed well in line with benchmark indices, gaining by nearly 1% each.

Suzlon Energy surged 2% after the company's subsidiary, SEFORGE secured a contract worth Rs 600 crore for the supply of forged and machined rings over a period of 5 years.

Everonn Education rallied 3% - saw first bounce in last five sessions.

Aviation stocks like Spice Jet, Kingfisher Airlines and Jet Airways zoomed between 5-11% ahead of meeting for FDI in aviation today.

VST Industries soared 14% after the company reported 46% year-on-year (y-o-y) growth in net profit at Rs 37.97 crore for the quarter ended December 2011, compared with Rs 26.08 crore in the corresponding quarter of previous fiscal.

The market breadth in BSE remained healthy with 1,905 shares advancing and 978 shares declining.

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