Post session - Quick review

Volatility once again remained order of the day for the Indian markets, though unlike the previous session the benchmark indices made some bounce back in second half of the trade after plunging to their lowest points during the noon. Earlier the markets made a flat start on getting weak global cues and it seemed that the consolidation phase will extend for yet another day lacking any supportive cues. Though, some of the Asian markets showed recovery towards the end but the European markets made a mixed start snapping three days gaining streak before Italy sells as much as 20 billion euros ($26.2 billion) of debt later in the day.

Back home, after the initial resistance the trade at the local bourses turned weaker lacking any supportive cue from the domestic or global front and owing to the December series F&O expiry. In initial trade some resistance was seen in the IT stocks as the rupee depreciated further but later they too lost traction, power sector stocks too were seen holding gains for a good bit of time, there were various individual stock specific developments that helped the sector to some extent. Reliance Power commissioned another 300-MW unit under its Rosa project in Uttar Pradesh. While, Tata Power Company said that it is taking complete control of the South-based Tata BP Solar by buying out BP Alternative Energy Holdings’ 51% stake. Some recovery was seen in the telecom stocks as Telecom Commission has decided to allow mergers between operators who make up less than 35 per cent of market revenue and share up to 25 per cent of airwaves in a service area. However, RCom the star of last session suffered profit booking losing over a percent for the day. There was some recovery in the second part of the trade as Finance Minister, Pranab Mukherjee amid concerns of a slowdown, expressed confidence that the Indian economy will soon revert back to the path of higher growth trajectory, but being the penultimate day of the F&O series expiry, the trade turned volatile in the last hour, once again dragging the markets near their lows of the day.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1096:1603 while 144 scrips remained unchanged.

The BSE Sensex lost 173.02 points or 1.09% and settled at 15,700.93. The index touched a high and a low of 15,887.80 and 15,666.46 respectively. 9 stocks advanced against 21 declining ones on the index (Provisional)

The BSE Mid-cap index lost 1.07% while Small-cap index was down by 1.15%. (Provisional)

On the BSE Sectoral front, Power up 0.78%, Capital Goods up 0.63% and HealthCare up 0.02% were the only gainers while Bankex down 2.23%, Metal down 2.12%, Oil & Gas down 1.91%, Auto down 1.39% and FMCG down 1.25% were the top losers.

The top gainers on the Sensex were NTPC up 2.80%, BHEL up 2.60%, Tata Power up 1.39%, Cipla up 1.20% and DLF up 0.81%.

On the flip side, Jindal Steel down 7.26%, ICICI Bank down 4.11%, M&M down 3.18%, Hindalco down 2.68% and Wipro down 2.50% were the top losers in the index. (Provisional)

Meanwhile, in its bid to inject liquidity in the economy, the Reserve Bank of India (RBI) has decided to purchase government securities worth Rs 12,000 crore on December 29, 2011. The central bank will conduct open market operations (OMO) for purchasing the securities through multi-security auction using the multiple price method, the apex bank said in a statement.

The move by RBI is consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions. The apex bank, in its mid quarter monetary policy review on December 16, 2011, had stated that OMOs would be conducted as and when considered appropriate.

The RBI statement opined that auction will be in four price methods, government security (G-Sec) maturing 2017 with a coupon of 7.49%, G-Sec maturing 2018 with a coupon of 7.83%, G-Sec maturing 2021 with 7.80% and G-Sec 2022 with 8.08%. While there is an overall aggregate ceiling of Rs 12,000 crore for all the securities in the basket put together, there is also no security-wise notified amount.

In the past month, the central bank has also purchased government securities of over Rs 24,311 crore from the money markets in three installments as part of its efforts to infuse liquidity into the system.

India VIX, a gauge for market’s short term expectation of volatility gained 1.71% at 26.74 from its previous close of 26.29 on Tuesday. (Provisional)

The S&P CNX Nifty lost 52.00 points or 1.09% to settle at 4,698.50. The index touched high and low of 4,756.20 and 4,685.65 respectively. 13 stocks advanced against 37 declining ones on the index. (Provisional)

The top gainers on the Nifty were BHEL up 2.93%, NTPC up 2.87%, Tata Power up 1.44%, Power Grid up 1.36% and Cipla up 1.19%.

On the other hand, Jindal Steel down 7.15%, PNB down 4.49%, ICICI Bank down 4.08%, Cairn down 3.03% and Reliance Infra down 2.96% were the top losers. (Provisional)

The European markets traded on a mix note, with France's CAC 40 up 0.51%, Germany's DAX down 0.45% and Britain’s FTSE 100 up 0.45%.

Asian markets continued their downtrend for third consecutive day on Wednesday as unease over the eurozone debt crisis overshadowed a strong rise in consumer confidence in the United States. On the first full day of trade after Christmas holiday, eyes were on Italy, which will hold a debt auction later amid weakened confidence after lenders in Europe deposited a record amount with the central bank.

Meanwhile, Seoul shares closed with a cut of about a percentage point as profit-taking weighed on the market on ex-dividend day, with high-yield shares bearing the brunt. Moreover, Taiwan stocks fell 0.4 percent, but Evergreen Marine led shipping shares higher on news that it will strengthen cooperation with an international shipping alliance to boost business in Asia-Europe trade routes. However, China’s Shanghai Composite ended virtually flat on Wednesday, with strength in energy and securities shares helped the index to reverse early losses, but turnover remained low in holiday-thinned trade.