Markets continue their good run

The benchmark indices ended the December derivatives series and the penultimate day of the year on an optimistic note, due to the firm Asian markets and long rollovers on F&O expiry day. Cementing the strong 200+ gains of the previous session, the Sensex rallied another 133 points at 20,389 and the Nifty ended above the 6100 mark at 6101, up 41 points. The midcap index ended at 7714, higher by 56 points and the smallcap index ended at 9552, up 41 points. 

There was green across Asia, with the Hang Seng, Taiwan, Seoul and Straits Times gaining upto half a percent each. The Japanese index, however, ended down around a percent as a stronger yen knocked the shares of major exporters. But the European indices, including the FTSE, CAC and DAX, have reversed their early gains and are trading marginally lower in mid-day trades. The US stocks had advanced in thin trade overnight, lifted by investor optimism about the economy in 2011; the Dow was up 10 points at 11,586 and Nasdaq was up four points at 2,666. And pre-market trading in Dow futures suggests a mildly positive opening on Wall Street.

On the macro-economic front, the food inflation surged to a 10-week high of 14.44% for the week ended December 18 from 12.13% in the previous week due to the escalating prices of onions, fruits, cereals and protein-based products. This is the fifth consecutive weekly rise in food prices. And on the policy front, the government deferred a decision on a possible increase in fuel prices in an attempt to fend off additional inflationary pressures and mass discontent. Meanwhile, the RBI deputy governor KC Chakrabarty said that inflation was always a concern and a pause in rate hikes does not mean a halt.

The day's rally was broad-based, with stocks from the power, auto and metal sectors having a field day. NTPC raced ahead by 2% at Rs 201 to top the gainers list on the BSE and fellow power stock, Tata Power left from where it left in the previous session by surging another 1.8% at Rs 1362. In the auto space, Hero Honda gained 1.8% at Rs 1991 and Tata Motors added 1.8% at Rs 1296. And the metal space saw the likes of Sterlite jumping by 1.7% at Rs 188 and Jindal Steel adding 1.4% at Rs 718. And Infosys spurted by 1.2% to touch a new life-time high of Rs 3440.
 
Fertilizer stocks strengthened on reports that a Group of Ministers will meet on January 5 to discuss a possible decontrol of urea prices. Among individual fertilizer stocks, FACT, Rashtriya Chemicals and Fertilisers (RCF), National Fertilisers, Chambal Fertilisers, Nagarjuna Fertilisers and SPIC gained in the region of 3% on the BSE.

Punjab & Sind Bank (PSB) had a decent debut on the bourses, ending the day at Rs 127 against the issue price of Rs 120 a share on the Bombay Stock Exchange (BSE). The shares had listed at a premium of 22% at Rs 146.10. The bank had fixed the issue price at the higher end of price band of Rs 113-120 a share. 

On the other hand, HDFC Bank skid by 1.1% at Rs 2302, ONGC shed 0.6% at Rs 1294 and Bajaj Auto lost 0.2% at Rs 1476. 

The market breadth was positive. Out of 3022 stocks traded on the BSE, there were 1645 advancing stocks as against 1217 declines.