Post Session: Quick Review

Tuesday’s trading session turned out to be yet another session of consolidation for local equity markets as market-participants stayed off equities in the F&O expiry week amidst prevailing caution ahead of Russia-Ukraine Leaders meet later in the day. The meeting in Minsk, Belarus, which also includes senior European Union officials, represents a fresh diplomatic push to end five months of fighting that has left over 2,000 people dead and comes a day after President Poroshenko dissolved parliament and called for early elections on October 26. Nevertheless, on the domestic front, prevailing caution ahead of the release of Q1FY15 GDP and Current Account Deficit (CAD) numbers, also weighed on the sentiment. Street widely expects Asia's third largest economy likely to grow 5.3% in the first quarter of this fiscal (April-March), up from 4.6 percent in January-March, which would be the fastest since the quarter that ended in March 2012. Thus, in the see-saw session of trade, whereby benchmarks faltered several times below the neutral line and recovered each time thereafter, both Sensex and Nifty managed to settle above the psychologically crucial 26,400 and 7,900 levels respectively. Meanwhile, broader indices witnessing sharper cuts, went home with sharp losses in the range of 0.25%-0.80%.

On the global front, Asian pacific shares edged mostly lower, led by losses of Shanghai on lingering concerns about the economy while expectations of fresh measures to kickstart it fade. Meanwhile, European shares slipped in early trade on Tuesday, giving up some of the previous session's sharp gains that were fuelled by prospects of further stimulus measures from the European Central Bank.

Closer home, most of the sectoral indices settled in the favour of green, nevertheless stocks from FMCG, Metal and Consumer Durable counters were the top gainers. Shares of pharmaceutical companies continued their upward march with most of the frontline stocks logging their lifetime high levels after reporting healthy results for the June quarter. Additionally, while Metal stocks managed to recover from previous sessions’ jolt of Supreme Court calling coal block allocations made by government to various firms between 1993 and 2009 as illegal, Power stocks witnessed yet another rough session of trade. Mass cancellation of the blocks would be a worst-case scenario for the Power sector as this would add to a shortage of coal for power plants. However, Auto stocks, which ran out of fuel in intra-day trade after Competition Commission of India (CCI) slapped a penalty of Rs 2,545 crore on 14 top carmakers of the country for violating trade norms in the spare-part and after-sale service market, too recovered by close of trade. The companies penalized by the competition watchdog were Maruti Suzuki, Tata Motors, Honda Siel Cars India, Volkswagen India, Fiat India, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor.

Meanwhile, much of the beating was witnessed by stocks from PSU and Infrastructure counters, besides Power counter. Additionally, Oil & Gas counter too were hurt by losses of ONGC stocks which slumped over 3% on reports of government’s decision of divesting 5% stake in the company via offer for sale (OFS) mechanism. The Government currently holds 69% stake in the company and will possibly collect approximately Rs 18,250 crore through the stake sale based on ONGC’s closing price of Rs 429. Moreover, Stocks related to banking sector too remained under pressure as the Reserve Bank of India Governor Raghuram Rajan has cautioned finance secretaries of state governments against debt waiver schemes as banks are already starved of capital. The market breadth on the BSE remained in the favour of decliners; advancing and declining stocks were in a ratio of 1136:1824, while 114 scrips remained unchanged. (Provisional)

The BSE Sensex rose 5.79 points or 0.02% to settle at 26442.81. The index touched a high and a low of 26481.97 and 26314.89 respectively. 14 stocks gained against 16 declines on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.24%, while Small cap index down by 0.80%. (Provisional) 

On the BSE sectoral front, FMCG up by 0.90%, Metal up by 0.75%, Consumer Durables up by 0.33%, IT up by 0.24% and Auto was up by 0.03% while, Power down by 1.32%, PSU down by 1.03%, Infrastructure down by 0.97%, Capital Goods down by 0.84%, Oil & Gas was down by 0.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindalco up by 3.86%, Tata Steel up by 2.58%, BHEL up by 1.60%, Cipla up by 1.59% and GAIL India was up by 1.54%. On the flip side, Tata Power down by 2.71%, ONGC down by 2.15%, Larsen & Toubro down by 1.50%, NTPC down by 0.81% and Mahindra & Mahindra was down by 0.77% were the top losers. (Provisional)

Meanwhile, in the wake of growing menace of un-authorized deposit raising schemes and scams such as Saradha and PACL, RBI Deputy Governor R Gandhi on Monday underscored the need for redefining the term called ‘deposit’. He noted that though the definition was clear in case of banks, but did not cover money collected by other entities, for which the exercise was being carried out by RBI in association with the government.

He also highlighted the need for defining the term ‘deposits’ in  way which would make it implicit as to who would be the regulator for different types of collection of money. He further noted that amendments would have to be made in the laws once the re-definitions would be completed. Additionally, he also pressed the need to strengthen state-level coordination committees so that un-authorized deposit taking could be dealt-with in a better way.

Notably, the comments from Gandhi come within days of capital markets regulator Securities and Exchange Board of India (SEBI) directing PACL, Delhi-based property developer, to return Rs 49,100 crore to depositors, and after the busting of earlier scams like the one caused by the Saradha Group in West Bengal and two Sahara Group companies.

Further, on the development of ‘newly revised norms on liquidity management’, the deputy governor asserted that this framework was aimed at reducing the volatility in the overnight rates and would have a positive impact in terms of predictability and timing.

India VIX, a gauge for markets short term expectation of volatility declined 3.39% at 13.32 from its previous close of 13.77 on Monday. (Provisional)

The CNX Nifty ended lower by 1.55 points or 0.02% to settle at 7904.75. The index touched high and low of 7915.45 and 7862.45 respectively. 23 stocks ended in the green against 26 stocks ending in red. (Provisional)

The top gainers on Nifty were Hindalco up by 3.43%, Tata Steel up by 2.53%, Lupin up by 1.95%, Tech Mahindra up by 1.72% and GAIL India was up by 1.63%. On the flip side, Jindal Steel & Power down by 6.53%, Tata Power down by 2.82%, ACC down by 2.63%, IDFC down by 2.59% and ONGC was down by 2.51% were the top losers. (Provisional)

European markets were trading mostly in the red; France’s CAC 40 was down by 0.08% and Germany’s DAX was up by 0.42%, while United Kingdom's FTSE 100 was up by 0.19%.

Asian markets ended mostly in red on Tuesday, with the stocks falling for the first time in three days after valuations on the regional gauge climbed to the highest level this year. The cost of insuring Malaysian government bonds fell to a 15-month low on speculation an improving US outlook will bolster the Asian nation’s exports. Zeti Akhtar Aziz, Malaysia’s central bank governor, commented on monetary policy and risks to inflation and growth. The governor stated that the country has to assess the situation as we go along.  Japan’s corporate services price index (CSPI) remained unchanged at a seasonally adjusted annual rate of 3.7%, compared to the preceding month whose figure was revised up from 3.6%. Singaporean Industrial Production rose to an annual rate of 3.3%, from 0.8% in the preceding month whose figure was revised up from 0.4%.