Post session - Quick review

Last hour volatility took the markets considerably lower on Thursday, although choppiness is expected on the F&O series expiry but the domestic markets after a gap-down start remained range bound throughout the day and even tried to enter the green terrain despite feeble global cues, as the US markets slumped overnight on concerns of European recovery while the Asian peers made a soft start tailing their global counterparts however, they managed a mostly positive close. On the other hand, the European markets made a positive start but soon gave up to the pressure and that too weighed on the domestic markets.

Earlier when the markets started recovering it seemed that there are many shorts to be covered. Usually the month of December has remained good for the markets and it was being expected that at least the series will get a decent close, but the markets took serious beating in the final hours to lose their crucial psychological levels and huge unwinding of positions was witnessed in the final hours. Even the positive report of food inflation rising at its slowest pace in more than five years was unable to give any respite to the markets. Food inflation, measured by the Wholesale Price Index (WPI), slipped to 0.42% for the week ended December 17.Oil & Gas, Capital Goods, Realty and Power were the laggards of the day while, high beta metal and defensive sector health care showed some resilience to emerge victorious. The broader indices though were less impacted compared to their larger peers for the day but in the December series they were the major loser, down by over 7%. In non sectoral gauges, whole ADA group companies were battered down losing about 4-5%, on the same time Reliance Industries plunged to its fresh 52 week low after the Petroleum Ministry asked a ministerial panel to decide if Reliance Industries can charge a marketing margin over-and-above the government-approved sale price for KG-D6 gas. There was jitters in the market from the beginning after the Sebi banned three merchant bankers and seven recently-listed firms and their promoters, accusing them of misusing IPO proceeds, performing shoddy due-diligence process, and aiding promoters to prop up prices on listing day. The regulator is currently reviewing the entire process for initial public offering of shares. The seven firms include Bharatiya Global Infomedia, Tijaria Polypipes, Taksheel Solutions, RDB Rasayans, Onelife Capital Advisors, Brooks Laboratories and PG Electroplast. All the stocks were down by 5-10% for the day. Finally the markets snapped the series lower by over one percent.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1194:1476 while 140 scrips remained unchanged.

The BSE Sensex lost 208.83 points or 1.33% and settled at 15,519.02. The index touched a high and a low of 15,724.60 and 15,515.44 respectively. 10 stocks advanced against 20 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.27% while Small-cap index was down by 0.69%. (Provisional)

On the BSE Sectoral front, Metal up 0.48% and HealthCare up 0.28% were the only gainers while Oil & Gas down 2.82%, Capital Goods down 2.56%, Realty down 2.01%, Consumer Durables down 1.42% and Power down 1.36% were the top losers.

The top gainers on the Sensex were Jindal Steel up 2.38%, SBI up 0.89%, Sterlite Industries up 0.89%, Hindalco up 0.69% and Cipla up 0.43%.

On the flip side, Tata Power down 4.03%, RIL down 4.00%, Maruti Suzuki down 3.38%, DLF down 3.32% and BHEL down 3.27% were the top losers in the index. (Provisional)

Meanwhile, India’s weekly food inflation, measured by the Wholesale Price Index (WPI), extended the declining streak for the seventh straight week and slipped to near six years low levels to 0.42% for the week ended December 17. The decline was mainly on the back of declining prices of essential items like vegetables, onion, potato, wheat and other essential commodities.

The sharp slump in food inflation numbers in the last one and half months has come as a sigh of relief for not only economic policymakers but also for the government who had been battling to control the rampant inflationary pressure on the economy since last two years. In a bid to rein inflation, RBI hiked key policy rates by 13 times since March 2010 only to pause the liquidity tightening measures in its recent meeting. Meanwhile, Pranab Mukherjee, Union Finance Minister, does not see the recently plunge in food inflation as impressive since the overall inflation still hovers comfortably above the RBI’s comfort zone.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group declined by 0.4% to 190.3 from 191.9 for the previous week due to lower prices of fruits and vegetables (4%), jowar (3%), tea and arhar (2% each) and ragi, urad and condiments and spices (1% each). However, the prices of fish-marine   (7%), poultry chicken (2%) and moong, masur, maize, fish-inland and bajra (1% each) moved up.

The index for ‘Non-Food Articles’ group rose by 0.1% to 177.6 (Provisional) from 177.4 for the previous week due to higher prices of gaur seed (8%), safflower (4%), fodder and sunflower (2% each) and linseed, rape & mustard seed, groundnut seed, soyabean and copra (1% each). However, the prices of raw silk (5%), raw jute and castor seed (2% each) and flowers, gingelly seed, raw rubber and raw cotton (1% each) declined.

As a result, the index for ‘Primary Articles’, which accounts for 20.12% of the WPI, declined by 0.1% for the week ended December 17 to 197.5 from 197.7 for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 2.70% for the period under consideration as compared to 3.78% for the previous week.

India VIX, a gauge for market’s short term expectation of volatility lost 0.44% at 26.62 from its previous close of 26.74 on Wednesday. (Provisional)

The S&P CNX Nifty lost 61.80 points or 1.31% to settle at 4,644.00. The index touched high and low of 4,701.70 and 4,639.05 respectively. 14 stocks advanced against 35 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Jindal Steel up 2.18%, SAIL up 1.63%, Grasim up 1.61%, Reliance Power up 1.11% and HUL up 1.01%.

 On the other hand, Reliance Communications down 5.42%, Tata Power down 4.57%, Reliance Infra down 4.45%, BHEL down 4.01% and Reliance down 4.00% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.16%, Germany's DAX up 0.49% and Britain’s FTSE 100 up 0.18%.

Most of the Asian markets reversed their initial losses and ended the session in the positive terrain snapping their three day’s losing streak on Thursday but, volume remained thin as concerns about Europe’s debt crisis kept investors sidelined in the trade. Earlier, the performance in Asia followed fall of US stocks ahead of Thursday’s auction of long-dated Italian debt, seen as a crucial test of that nation’s ability to borrow at sustainable rates.  Meanwhile, after subdued opening, Chinese share got a lift on speculation of policy easing measures from Beijing. Taiwan stocks also reversed course to end up 0.26 percent on Thursday, although trading was thin due to the holiday season. However, Hong Kong shares fell over half a percent in holiday-thinned trade while, Japanese benchmark Nikkei slipped by 0.29 percent ahead of an Italian debt sale that could prove challenging in thin volumes.