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Markets surge to multi-year highs


Markets surged to two year highs as the government decided to partially deregulate diesel prices as well as defer the implementation of the General Anti Avoidance Rules (GAAR), which seeks to tax foreign investors, by two years until 1 April 2016. Strong corporate numbers also boosted investor sentiments as the Sensex added 375 points or nearly 2% at 20,039. Nifty surged 113 points at 6,064. FIIs bought shares worth Rs 25087.80 crore in December 2012, according to data available with Sebi. Markets ended near the day's high on Monday as investors cheered the lower than expected inflation figures. Tuesday saw the Sensex crossing the 20,000 mark on the back of better than expected quarterly numbeers from select stocks. Markets slipped on Wednesday as comments from Reserve Bank of India Governor D. Subbarao tempered expectations of cut in key policy rate by the RBI at Third Quarter Review of Monetary Policy 2012-13 on 29 January 2013. Weakness in global stocks also weighed on sentiments. Investors waited for crucial economic data from China, while the yen's extended gains spurred profit taking in Japanese equities after their recent rally. Markets ended higher on Thursday supported by buying in oil marketing companies amid hopes of growth recovery in Asia's third-biggest economy after government partially deregulated diesel prices. Friday finally the Sensex ended at fresh two-year high led by overseas inflows into the riskier assets. The headline inflation slowed down to its lowest level in three years, hardening expectations for an interest rate cut by the RBI later this month to boost an economy that is set to post its slowest growth in a decade. The annual wholesale price inflation (WPI) eased to 7.18% in December, government data showed on Monday. It was below analysts' expectations of 7.40% and down from 7.24% annual rise in November. The broader markets underperformed the benchmark index. BSE mid-cap index ended flat at 7,167 while the small-cap index slipped over 1% to 7,370. BSE oil & gas index surged 9% to 9,571 following news of oil price deregulation. State-owned Indian oil marketing companies can now raise diesel prices in line with increases in global crude oil prices, Oil Minister Veerappa Moily said on Thursday.  Meanwhile, IT pack also notched up significant gains after slew of upbeat quarterly results by sector heavy-weights raised hopes of growth recovery in the beleaguered technology sector. BSE IT index added 2.5% at 6,405. On the other hand, BSE auto index dropped 3% to 11,298 on the back of weak sales numbers posted by most vehicle companies. Metal index dropped 1.4%, mirroring cues from the London Metal Exchange. ONGC was the biggest gainer in the Sensex pack - soaring 15% to Rs 338. NTPC and Bharti Airtel quickly followed suit with over 7% gains each. Reliance Industries rose 7% at Rs 899 on hopes of improved refining margins by the world's biggest refiner in the third quarter after surge in GRMs by the Essar Oil. ITC that rose 5% at Rs 287 after diversified group reported a 20.62% rise in its standalone net profit at Rs 2,051.85 crore for the third quarter ended December 31, 2012 on the back of strong performance in cigarettes, agri and paper businesses. Wipro, on the other hand, fell on concerns the performance of the company's core IT services segment in third quarter was not as strong as expected. Bangalore-based soap to IT services major Wipro reported a net profit of Rs 1,716 crores for the third quarter of FY13 ended on December 31, 2012, registering a y-o-y growth of 18% when compared to the corresponding period last year. Shares of Wipro dropped 5.3% to Rs 397. Tata Motors slipped over 0.6% after the company said that its global sales in December 2012 declined by 13.88% to 98,968 units against 114,920 units sold during the corresponding month in 2011. Bajaj Auto slipped 2.8% after reporting almost 100 basis point (bps) drop in operating margin for the third quarter ended December 2012 as compared to the previous corresponding period.
HDFC Bank, India’s second largest private lender, fell 1% at Rs 663 as lender's bad loans rose in the  last quarter. Private-sector bank reported 30% increase in net profit at Rs 1,859 for the December quarter on the back of 24% growth in loan book. The bank's total income rose 22% Rs 10506 crore while net interest income (NII) was Rs 3799 crore rising 22% over the corresponding quarter last year. Hero MotoCorp ended down over 3.7% after India's largest motorcycle maker missed estimates for the fourth straight quarter on Thursday as net profit fell 20.4% on rising costs and falling sales that battered margins. Hindalco Industries slipped 3.3% in spite of reports that the company has acquired Alumina Refinery and Bauxite Mines from Novelis Do Brasil Ltd, a wholly subsidiary of Novalis Inc.Source: Business Standard

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