Post Session: Quick Review

Local equity markets, after snapping nine consecutive sessions’ winning streak in previous trading session witnessed profit-booking for yet another session on Friday in absence of any buying interest from market-participants amidst somber global cues which were on the back of prevailing cautiousness ahead of US economic data, due to release on Friday and would be the next big trigger for the markets after the European Central Bank’s meeting, in which it surprisingly cut rates. In the extremely choppy session of trade, markets though got off to a positive start, but surrendered all their gains in late morning deals to languish into the negative terrain thereafter. Bit of recovery though was witnessed by market-participants in the last hour of trade but that was not enough to trigger any reversal of trend at Dalal Street. Thus, by close of trade both Sensex and Nifty, taking a hit of around two tenths of a percent, concluded below the crucial 27,100 and 8,100 levels respectively. However, the session turned out to be yielding for broader indices, which went home with gains in the range of 0.45%-1.15%. Nevertheless, the week turned out to be productive for larger peers too, which garnered gains of over a percent.

On the global front, Asian shares settled mostly lower on Friday after the European Central Bank unveiled a fresh round of measures to fight off deflation. However, after a healthy run-up in equities this week, profit-takers also tempered buying sentiment, while Wall Street also provided another soft lead. ECB policymakers cut interest rates to 0.05% from 0.15%, while slashing deposit rate to -0.2% from -0.1%, meaning lenders would have to pay more to keep their cash at the central bank. Additionally, European shares also getting a negative handover from Asian counterparts, were reeling under pressure on Friday ahead of U.S. monthly payrolls data, seeking insight on the outlook for U.S. interest rates. The U.S. Labor Department is expected to report that non-farm payrolls rose to 225,000 in August, after rising 209,000 in July. The unemployment rate is expected to slip to 6.1% from 6.2%.

Closer home, despite the subdued trend, most of the sectoral indices on BSE settled in the favour of green, however top gainers were stocks from Realty, Metal and Information Technology counters. On the flip side, stocks from Auto, Fast Moving Consumer Goods (FMCG) and Banking counters were the top losers of the session. Meanwhile, metals and mining stocks witnessed some buying interest after Central Government unveiled that it will soon introduce amendments to Mines and Minerals Development and Regulation Act to enhance mining in country. Additionally, infra stocks too hogged some limelight during the session after the Minister of Urban Development M Venkaiah Naidu underscored that the guidelines for the Government's flagship scheme '100 smart cities' are in advanced stage of finalization. The market breadth on the BSE remained in the favour of advances; advancing and declining stocks were in a ratio of 1727:1266, while 89 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower by 67.44 points or 0.25% at 27018.49 after trading in a range of 26920.56 and 27178.80. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.41%, while Small cap index up by 1.18%.

The top gainers on the Sensex were Realty up by 0.99%, Capital Goods up by 0.86%, Metal up by 0.58%, IT up by 0.52% and PSU up by 0.35% while, Auto down by 0.76%, Bankex down by 0.31%, FMCG down by 0.25%, Power down by 0.04%, Consumer Durables down by 0.02% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 1.35%, SBI up by 1.17%, Bajaj Auto up by 1.07%, ONGC up by 0.95% and Cipla up by 0.94%. On the flip side, Hero MotoCorp down by 2.64%, HDFC down by 2.13%, Coal India down by 1.92%, BHEL down by 1.76% and ICICI Bank down by 1.38% were the top losers. (Provisional)

Meanwhile, heavy rainfall over the past week narrowed the overall monsoon deficit in the country to 14%. Bringing some relief to farmers concerned about weak rains in July and August, rainfall during the past few days also hit some rain-starved regions such as Jammu and Kashmir and Rajasthan and accelerated crop growth.

According to the Indian Meteorological Department (IMD), water levels in most reservoirs of South India have increased significantly during past week. Increase in reservoirs will boost crop production in Andhra Pradesh, Telangana where rain deficit was more than 25%. However, there is no respite for the farmers of Punjab and Haryana where rain deficit is still 59% and above. The IMD stated that country's major reservoirs were filled to 71% (110.22 billion cubic metres) of the total capacity of 155.05 billion cubic metres, down from 82% last year, but better than the 10-year average of 69%.

Around 55% of agricultural land in the country depends entirely on rain. Timely and normal monsoon is also vital for rabi season (winter crops) also as it raises the water table and moisture content in the soil. Though, agriculture sector accounts for only about 15% of the economy, monsoon has a wider impact because it affects millions of people in villages who depend upon agriculture. Further, a poor monsoon can impact India’s exports, stoke inflation particularly food inflation and lead to lower demand for products ranging from cars to consumer goods.

India VIX, a gauge for markets short term expectation of volatility dropped 1.08% at 12.93 from its previous close of 13.07 on Thursday. (Provisional)

The CNX Nifty edged lower by 9.10 points or 0.11% at 8086.85 after trading in a range of 8049.85 and 8122.70. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were NMDC up by 5.27%, DLF up by 4.75%, Jindal Steel & Power up by 2.38%, Asian Paints up by 2.32% and Kotak Mahindra Bank up by 1.86%. On the flip side, United Spirits down by 4.57%, HDFC down by 2.33%, Coal India down by 2.31%, Hero MotoCorp down by 2.22% and BHEL down by 1.87% were the top losers. (Provisional)

European Markets were trading in the red; Germany’s DAX was down by 0.12%, France’s CAC was down by 0.23% and UK’s FTSE 100 was down by 0.35%.

Asian markets ended mostly in red on Friday, with the regional benchmark indices paring its weekly advance. China’s stocks rose for a sixth day, capping the benchmark index’s biggest weekly gain in 19 months, amid speculation that that government is accelerating measures to support the economy and reverse a four-year slump in equities. Japan’s indices fell, reversing earlier gains, as investors awaited the release of US monthly employment data. Prime Minister Shinzo Abe’s administration gave its clearest signal yet of concern about damage to the economy from April sales-tax increase, with the finance minister saying that a back-up plan for stimulus will be prepared. Indonesia’s foreign exchange reserves rose to $111.2 billion by the end of August from $110.5 billion the previous month, fueled by strong oil and gas export revenue. This is the highest level of Indonesia’s foreign exchange reserves since December 2012. South Korean GDP rose to a seasonally adjusted 0.5%.