Post Session: Quick Review

In an extremely choppy session of trade, Indian equity markets despite slipping below neutral line for couple of times, concluded into the positive territory for third straight session on Wednesday as recovery which was subsequent to every dip, mainly came as saving grace to markets. Last hour buying mainly prevented a down day of trade at Dalal Street as markets for couple of times surrendered to selling pressure, though only to bounce back in green. By close of trade, both Sensex and Nifty ended above the psychologically crucial 25,900 and 7,700 levels respectively, with slender gains of around one tenth of a percent. However, trade turned out to be nasty for broader indices, which went home with sharp cuts of over 1.75%.

The uptrend of the markets was supported by report of global rating agency Moody’s, which forecasted better outlook for Indian economy and pegged country’s GDP to grow by 5% this year to further accelerate by 5.5%-5.6% in 2015, while reports suggesting Finance Ministry’s discussions with the state governments on Goods and Service Tax (GST) in the final stages, also added to the upbeat mood.

However, broader gains of markets were capped on account of dismal set of macro-economic data released after market closed on Tuesday. On the macro-front, limiting central bank’s scope for easing policy rates, provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) rose more than expected at 7.96% in July as compared to 29-month low of 7.31% in June and 9.64% in the July, 2013, while contradicting indications of strong recovery in domestic economic growth, country’s annual industrial output growth, measured by index of industrial production (IIP), slowed down to 3.4% y-o-y in the month of June as compared to 4.7% in May. On the global front, Asian shares mostly ended positive on Wednesday even as investors remained cautious as the crisis in Ukraine threatened a fragile economic recovery in Europe. However, mainland Chinese shares were hit by surprisingly weak loans data as markets braced for more Chinese economic reports later in the day, including industrial production and retail sales for July. On the flip side, European stocks gained ground in early trade on Wednesday, helped by forecast-beating results from bellwethers such as Swiss Life and Salzgitter.

On the BSE sectoral front, most of the sectoral indices lost to red, while stocks from Realty, Capital Goods and Consumer Durable counters were the prominent losers of the session. On the flip side, stocks from FMCG, IT and Healthcare counters were the major pillars of markets’ strength. Shares of state-run oil marketing companies gained on hopes that results by sector leader Oil and Natural Gas Corporation (ONGC) later in the day would exceed expectations. Hopes of lower subsidy losses as crude oil prices fell mainly aided oil retailers. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 879: 2043, while 88 scrips remained unchanged. (Provisional)

The BSE Sensex surged 38.18 points or 0.15% to settle at 25918.95. The index touched a high and a low of 25972.62 and 25791.79 respectively. 13 stocks gained against 17 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices, however, were ended in the red; the BSE Midcap was down by 1.71%, while the BSE Small cap index was lower by 2.37%. (Provisional) 

On the BSE sectoral front, FMCG up by 2.22%, IT up by 0.76%, Healthcare up by 0.75%, Oil and Gas up by 0.17% and TECk up by 0.16% were the major gainers in the space, while Realty was down by 5.22%, Capital Goods was down by 2.65%, Consumer Durables was down by 2.18%, Power was down by 2.17% and PSU was down by 1.94% remained the top loser on the sectoral space. (Provisional)

The top gainers on the Sensex were ITC up by 2.59%, HUL up by 2.43%, HDFC up by 2.26%, Sun Pharma up by 2.19% and Wipro was up by 1.09%. On the flip side, BHEL down by 6.57%, Hindalco down by 3.47%, Coal India down by 3.43%, SBI down by 2.64% and Axis Bank down by 2.36% were the major losers. (Provisional)

Meanwhile, in its report titled 'Global Macro Outlook 2014-15: Summer Lull: Subdued, but less risky global growth Likely', global rating agency, Moody’s has projected a better growth outlook for India and forecasted country’s GDP to grow by 5% this year. The higher growth projection for India comes against the backdrop of a new government coming to power with single majority for the first time in three decades.

The agency has held robust growth outlook for both Indonesia and India and expects both the countries’ GDP to grow around 5% this year and 5.5%-5.6% in 2015. However, the rating agency’s forecast on country’s growth forecast still remained way lower than the level witnessed before global crisis. Besides, it is also short of new government’s target to raise the growth of 7.8% by 2017-18. Further, Moody's also expects India and Indonesia to see more resilient GDP growth.

Specifically for India, the agency highlighted global slowdown along with sluggish domestic economic activities, high interest rates and stubborn inflation were some of the factor that pulled down India's growth to sub 5% in the last two years. After recovering in 2009-10 and 2010-11, GDP growth sunk to decade's low of 4.5% in 2012-13 and marginally picked up to 4.7% in 2013-14.

India VIX, a gauge for markets short term expectation of volatility rose 2.19% at 13.76 from its previous close of 13.64 on Tuesday. (Provisional)

The CNX Nifty ended higher by 12.50 points or 0.16% to settle at 7,727.05. The index touched high and low of 7,757.10 and 7,695.70 respectively. 19 stocks ended in the green against 31 stocks ending in red. (Provisional)

The major gainers of the Nifty were HCL Tech up by 2.89%, ITC up by 2.79%, HUL up by 2.45%, HDFC up by 2.36% and Sun Pharma was up by 2.28%. On the flip side, the key losers were BHEL down by 6.51%, Bank of Baroda down by 4.51%, DLF down by 4.10%, Coal India down by 3.47% and Hindalco down by 3.40%. (Provisional)

European markets were trading in the green; France's CAC 40 was up by 0.19%, UK's FTSE 100 was down by 0.89%, while Germany's DAX was up by 0.56%.

Asian equity indices ended mostly in green on Wednesday, with the regional gauge gaining a third day, as investors weighed earnings and economic reports. Japan’s economy contracted the most since the record earthquake three years ago as consumption and investment plunged after an April sales-tax increase aimed at curbing the world’s biggest debt burden. Gross domestic product shrank an annualized 6.8% in the three months through June. Unadjusted for price changes, GDP declined 0.4%. A drop in economic output was expected after the nation’s consumption tax was increased in April to 8% from 5%. This was the first time Japan raised the consumption tax in 17 years and is an attempt by the Shinzo Abe-led government to rein in public debt by increasing government revenue.

Meanwhile, several of the Bank of Japan’s board members expressed a more cautious view on the economic outlook to reach a sustained 2% price stability target by fiscal 2015, according to minutes of the July policy meeting released. In July, the BoJ decided by a unanimous vote to leave the bank's policy target unchanged as expected, maintaining its overall economic assessment. China’s broadest measure of new credit plunged to the lowest since the global financial crisis and industrial output unexpectedly slowed, adding risks to growth as the government grapples with a property slump. Factory production rose 9% from a year earlier and fixed-asset investment growth weakened. The data spurred speculation that the government will increase stimulus, with Premier Li Keqiang’s growth target of about 7.5% this year at risk.