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| Weekly: Indices surge 3% led by rate sensitives |
| Tulemino Antao / Mumbai Feb 18, 2012, 10:04 IST |
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 The Indian stock markets gained for the seventh straight week to end at over 6-month closing highs, amid robust foreign fund inflows, led by rate sensitive shares as easing concerns over headline inflation rekindled hopes of a rate cut by the central bank in coming months.
The inflows from foreign funds into Indian equities was on the back of monetary easing policies by the European Central Bank, strengthening of the rupee against the US dollar and easing concerns over India’s headline inflation.
For the week ended February 17, the 30-share Sensex edged higher by 540 points or 3% to end at 18,289 and the 50-share Nifty gained 182 points or 3.4% to end at 5,564.
Six months ago, the Sensex had ended at 18,314 on August 1 and the Nifty had ended at 5,575 on July 26.
India’s headline inflation fell to an over two-year low of 6.55% in January on cheaper food items, which may prompt the Reserve Bank to cut policy rates in the coming months.
Headline inflation, as measured by the Wholesale Price Index (WPI), had stood at 7.47% in December 2011. It was 9.47% in January last year.
The latest numbers are the lowest since December 2009 when headline inflation was at 7.15%.
Prime Minister Manmohan Singh approved suggestions made by the Secretary level Committee for solving the issue of coal deficit faced by power sector.
As per the approved suggestions, Coal India Limited (CIL) will sign FSAs with power plants that have entered into long-term power purchase agreement (PPAs) with power distribution companies and have been commissioned/would get commissioned on or before 31st March 2015.
The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years with trigger level of 80% for levy of disincentive and 90% for levy of incentive.
Meanwhile, the broader markets outperformed the benchmark index for the week with the smallcap and the midcap indices posting gains of over % each.
Power stocks also rallied after the Prime Minister’s announcement on assurance of coal supplies.
The BSE Mid-cap index surged 4.8% and the Small-cap Index ended 3.3% higher.
FII inflows remained steady through the week. In the current calendar year so far they have bought equity shares worth Rs 24,225 crore ($4.85 billion), according to the data from the Securities and Exchange Board of India.
Gains during the week were led by interest-rate sensitive sectors such as Banks, Auto, Realty, Capital Goods and Consumer Durables after headline inflation which eased to a two year low rekindled of a rate cut by the central bank.
The BSE-Realty Index surged 10.2%, Capital Goods Index gained 7.9%, Consumer Durables jumped 7.8% while Bankex and Auto indices gained 6.2% each.
In the realty index top gainers include DLF, Anant Raj, Sunteck Realty, DB Realty, and HDIL which gained between 10-27% each.
Among capital goods shares, L&T, BEML, Thermax and BHEL gained 7-17% each.
Gitanjali Gems gained 16.8% and Titan Industries surged 12.4% among consumer durables shares.
Axis Bank was the top gainer in the Bankex up 14.7% followed by IDBI Bank up 12% and SBI gained 11.2%.
Ashok Leyland led the Auto Index with gains of 10% followed by M&M up 8.4%, Hero Motocorp up 7%, Tata Motors up 6.5% and Maruti Suzuki gained 6%.
Prominent mid-cap gainers during the week include Indiabulls Power up 47%, BGR Energy was up 33.7%, Indiabulls Finance up 32%, Lanco Infra gained 39%, PTC India rose 18%, Jain Irrigation surged 22% and GVK Power rose 13%.
In the mid-cap index top gainers include, Provogue up 25%, SKS Microfinance up 14.8%, Unity Infra up 15% and Vakrangee Soft gained 21%.
In corporate news, Tata Motors reported 41% year-on-year (yoy) jump in consolidated net profit at Rs 3,405 crore for the quarter ended December 2011 on the back of better performance by British division Jaguar Land Rover (JLR). The company's consolidated revenues grew 44% at Rs 45,260 crore on y-o-y basis.
The auto major reported 27% year-on-year (y-o-y) growth in its global sales to 114,920 vehicles in December 2011, driven by strong sales of passenger cars and luxury Jaguar Land Rover (JLR) brand.
India’s largest lender State Bank of India beat street estimates when it clocked a 15% year-on-year (yoy) growth net profit at Rs 3,263 crore for the third quarter ended December 2011, on the back of a robust 27% growth in net interest income (NII). This number was ahead of analyst estimates that put net profit at around Rs 3,150 crore.
“NII climbed to Rs 11,466 crore from Rs 9,050 crore during the recently concluded quarter, while the net interest margin (NIM) improved to 4.05% from 3.6% a year before," the bank said in a filing to the stock exchanges.
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