Post session - Quick review

The Indian equity markets consolidated on Wednesday after witnessing a very choppy session. The trade started on a positive note tailing the good start of the regional markets and the surge in the US markets overnight. But there were many domestic triggers that made the trade choppy at Dalal Street, but still the indices tried hard  and once broke into the psychological crucial levels of 16000 (Sensex) and 4780 (Nifty). Though, profit booking became rampant after the big rally of last session as the other regional markets too started receding, after the Chinese Premier raised his concern that China faces relatively difficult business conditions. The European stocks too retreated in early trade ahead of Germany and Portugal’s plan to sell a total of 6 billion euros in debt.

Earlier the markets made a positive start and the supportive global cues seemed taking the markets to further high, but the traders opted a cautious approach and started taking profit, but still lots of gauges, specially the PSU and Capital Goods kept their spirit high and led the markets to the high points of the day. The markets remained buzzing with Sebi's newly introduced concept of institutional placement programme (IPP) that will allow a promoter to either issue fresh equity or dilute its holding by up to 10% of the total equity. The other mechanism introduced by the market regulator is offer for sale through stock exchanges which allows promoters to sell shares on the stock exchanges but from a separate window for auction that would be open during normal trading hours. However, there was a positive economic news but that too failed to support the markets, Service sector activity in India improved in the month of December and the sector grew at the fastest pace since July on the back of strong new business and output growth. The Auto sector suffered severe profit taking, while the Tata Motors continued its upmove other auto majors like, Bajaj Auto and M&M closed lower by over 4 percent, Hero Motocorp and Maruti Suzuki, too lost couple of percentage points. Technology stocks too declined as the rupee depreciation got a halt and the concern continued for the European markets. However, the broader markets managed to outperform the benchmarks and closed with marginal gains.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1511:1180 while 134 scrips remained unchanged.

The BSE Sensex lost 80.19 points or 0.50% and settled at 15,859.17. The index touched a high and a low of 16,004.69 and 15,822.32 respectively. 11 stocks advanced against 18 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index gained 0.09% while Small-cap index was up by 0.07%. (Provisional)

On the BSE Sectoral front, PSU up 1.56%, Capital Goods up 1.01%, Power up 0.56%, Bankex up 0.50% and Metal up 0.39% were the top gainers while Auto down 1.43%, TECk down 0.94%, Consumer Durables down 0.71%, Oil & Gas down 0.60% and FMCG down 0.60% were the top losers.

The top gainers on the Sensex were Tata Motors up 2.86%, BHEL up 2.48%, ICICI Bank up 2.26%, Hindalco up 2.12% and ONGC up 0.93%.

On the flip side, Bajaj Auto down 4.89%, M&M down 4.32%, HUL down 3.10%, Bharti Airtel down 2.95% and Hero MotoCorp down 2.79% were the top losers in the index. (Provisional)

Meanwhile, Service sector activity in India improved in the month of December as the sector grew at the fastest pace since July on the back of strong new business and output growth. The encouraging service sector report came a day after manufacturing activity data showed that the sector resiliently bounced in the month of December as it accelerated at a swiftest pace in last six months, highlighting the fact that the Indian private sector output registered strong growth in the last month of 2011.

According to the seasonally adjusted HSBC Business Activity Index, the service sector accelerated to 54.2 in December, as against 53.2 in the previous month of 2011. A figure above 50 signals expansion in production while, a number below 50 indicates contraction. Though the service sector growth in the month under review remained lower than the long-run series average, however, the purchasing managers' index (PMI) reading for the services sector, which measures the overall health of the sector, suggested that activity saw strongest improvement in business conditions in last five months.

After showing signs of cooling and even slipping to a two and a half year low of 49.1 in October, the service sector has bounced back as new orders increased for the thirty-second straight month in December while outstanding business also rose after remaining broadly unchanged in the last two months. Besides, employment in the sector too rose in the month after six straight months of showing job losses. But, the rate of input cost inflation grew deeper as it rose at the fastest rate in four months, remained stubbornly above the long-run series average.

Thus, the strong Manufacturing and Service sector PMI have propelled the HSBC Composite Index, which covers both the manufacturing and service sectors, to 54.7 in the 2011’s last month, higher from 52.3 seen in November 2011. However, concerns over slowing domestic economic condition amid uncertainty over global growth prospects still pose potential downside risks for the sectors. 

India VIX, a gauge for market’s short term expectation of volatility gained 0.95% at 26.41 from its previous close of 26.16 on Tuesday. (Provisional)

The S&P CNX Nifty lost 23.60 points or 0.50% to settle at 4,741.70. The index touched high and low of 4,782.85 and 4,728.85 respectively.206 stocks advanced against 29 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were HCL Tech up 3.92%, Tata Motors up 3.12%, Reliance Infra up 2.66%, Ranbaxy up 2.55% and BHEL up 2.22%.

On the other hand, Bajaj Auto down 4.58%, M&M down 4.16%, ACC down 3.64%, Bharti Airtel down 3.39% and HUL down 3.10% were the top losers. (Provisional)

The European markets traded on a mix note, with France's CAC 40 down 0.28%, Germany's DAX down 0.29% and Britain’s FTSE 100 up 0.32%.

Sentiment remained bullish in the Asian region and most of the Asian peers ended the trade in the green following a rally in US markets on Tuesday. The US Institute for Supply Management said last night that it’s manufacturing index hit 53.9 percent in December, an increase of 1.2 points from November and the fastest rate in six months, surpassing expectations. Any figure over 50 indicates growth while anything below suggests a contraction. Meanwhile, Japanese Nikkei rose over a percentage point to a three-week closing high on Wednesday as investor risk appetite returned after upbeat US and European economic data improved the global growth outlook. However, Chinese and Hong Kong benchmarks edged lower in the trade after Chinese Premier’s remarks that China faces relatively difficult business conditions.