Post Session: Quick Review

Daunting global set-up yet again jolted Indian equity markets, which for third consecutive session settled lower with cut of over one percent that dragged both Sensex and Nifty below the psychologically crucial 25,400 and 7,600 levels respectively. In the extremely murky session of trade, benchmarks for once did not attempt recovery and listlessly kept losing ground to end down in dumps. Absence of any positive trigger, losses of market heavyweight, State Bank of India (SBI), combined with geo-political concerns over Ukraine, which weighed on risk-appetite of investors, mainly led to yet another downbeat session for Dalal Street, which for the week suffered losses of around half a percent. Besides, cautiousness ahead of data heavy week which also kept market-participants on tenterhooks, contributed to losses of both frontline and broader indices. Meanwhile, broader indices nursing heavier losses, settled with sharper cuts of over 2%. For the week, while BSE midcap index lost 0.60%, CNX Midcap plunged by 1.1% 

On the global front, Asian shares tumbled on Friday as investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth, extending losses after US President Obama authorised air strikes in Iraq. Further while, better-than-expected export growth from China pulled markets off their lows, but failed to offset all the gloom. Meanwhile, European shares dropped on Friday, sinking for the seventh time in eight sessions on mounting geopolitical jitters.

Closer home, markets failed to draw any solace from rating upgrade from domestic rating agency, India Ratings which revised its FY15 gross domestic product (GDP) growth forecast to 5.7% from 5.6% on a good show by the industrial sector, but highlighted that it was impossible for the government to meet its ambitious fiscal deficit target of 4.1%. In the broad-based selling pressure, none of the sectoral indices managed to survive the onslaught, barring stocks from defensive Healthcare and Fast Moving Consumer Goods counter, which gained on defensive buy strategy of traders. Also succumbed to selling pressure were stocks of IT counter that ended downbeat despite rupee depreciating to five months low in intra-day trade. Nevertheless, prominent losers were stocks belonging from Realty, Metal and Power counters. Meanwhile, banking stocks which already were downbeat took a hit for the worst after country's largest lender State Bank of India posted a marginal but rise of 3.3%  in net profit at Rs 3,349 crore for the first quarter ended June 2014 (Q1FY15), its first in nearly six quarter. Additionally, Shares of Public Sector Undertaking (PSU) Oil Marketing Companies, BPCL, HPCL and IOC declined as crude oil prices rose, which in turn would increase under recoveries of these companies on domestic sale of diesel, LPG and kerosene at government controlled prices. Besides, Auto stocks also ran out of steam despite SIAM forecasting 5-10% growth for car sales for FY15. According to the data released by Society of Indian Automobile Manufacturers (SIAM), domestic  passenger car sales stood at 1,37,873 units in July this year as compared to  1,31,257 units in the same month of 2013. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 826: 2,069, while 99 scrips remained unchanged. (Provisional)

The BSE Sensex declined 259.87 points or 1.02% to settle at 25329.14. The index touched a high and a low of 25406.87 and 25232.82 respectively. 7 stocks gained against 23 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices too ended in the red, the BSE Midcap was down by 2.06%, while the BSE Small cap index was lower by 2.14%. (Provisional) 

On the BSE sectoral front, FMCG up by 0.09% and Healthcare up by 0.05% were the only gainers in the space, while Realty down 3.86%, Metal down 3.15%, Power was down 2.92%, Capital Goods down 2.50% and PSU down by 2.24% were the top losers on the sectoral space. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.09%, Dr Reddys up by 0.84%, ITC up by 0.65%, Cipla up by 0.26% and TCS was up by 0.23%. On the flip side, SSLT down by 5.71%, Tata Power down by 3.79%, BHEL down by 3.74%, Tata Steel down by 3.22% and Gail India down by 2.85% were the major losers. (Provisional)

Meanwhile, the controversial Insurance Bill is unlikely to come in the current session of Parliament, with the Union government’s efforts to break the deadlock being botched by Congress led opposition, who sticking to its decision wants the bill to be referred to select committee of the Rajya Sabha.

The first major economic reform initiative of the Narendra Modi government, which proposes to hike FDI in insurance to 49%, has been caught in a logjam over Congress-led opposition's insistence to refer the Bill to a Select Committee, in a move which is aimed at denying Prime Minister Narendra Modi the leverage to sell this financial sector reform when he visits the United States in September.

At a meeting with leaders of various parties, where Finance Minister Arun Jaitley offered to introduce the changes that the Congress and others wanted in the Bill without referring it to a select committee, Congress, along with eight parties, proposed to move a motion in the House for forming a select committee on the Bill. However, some reports suggest that government is mulling to send the bill to a select committee, but seek a report in a time-bound manner.

India VIX, a gauge for markets short term expectation of volatility rose 2.17% at 14.44 from its previous close of 14.13 on Thursday. (Provisional)

The CNX Nifty ended lower by 80.70 points or 1.06% to settle at 7,568.55. The index touched high and low of 7,592.45 and 7,540.10 respectively. 9 stocks ended in the green against 41 stocks ending in red. (Provisional)

The major gainers of the Nifty were Bharti Airtel up by 2.52%, Dr Reddys up by 0.90%, ITC up by 0.85%, HCL Tech up by 0.80% and Hero MotoCorp was up by 0.70%. On the flip side, the key losers were SSLT down by 5.78%, BHEL down by 4.64%, DLF down by 4.31%, Tata Power down by 3.37% and Tata Steel down by 3.22%. (Provisional)

European markets were trading in the red; Germany's DAX was down by 0.70%, France's CAC 40 was down by 0.87% and UK's FTSE 100 was down by 0.42%.

Asian equity indices ended mostly in red on Friday, as US President Barack Obama authorized air strikes in Iraq. China’s buoyant exports pushed its trade surplus to a record in July, fuelling optimism global demand will help counter pressure on the domestic economy from a weakening property sector. Chinese Trade Balance rose to 47.30B, from 31.60B in the preceding month. Exports in July jumped 14.5% from a year earlier - the fastest pace in 15 months, doubling from 7.2% in June and roundly beating market expectations. While manufacturing appears to have picked up in the world’s second-largest economy, unexpected weakness in the services sector this week has renewed concerns about the growth outlook. The weak housing market remains China’s biggest risk, posing a drag on the broader economy and investor confidence.

The Bank of Japan maintained record stimulus after recent production and export data highlighted weakness that could challenge Governor Haruhiko Kuroda’s push to stoke faster inflation. The central bank stuck with a pledge to increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen ($687 billion). Japan’s Economy Watchers Current Index rose to a seasonally adjusted 51.3, from 47.7 in the preceding month. Japan’s Current Account rose to a seasonally adjusted 0.13T.