Post Session: Quick Review

Profit-booking took a toll on Indian equity markets for yet another session, thereby leading a down-session of performance, which dragged both Sensex and Nifty below the psychologically crucial 27,100 and 8,100 levels respectively, with losses of around three tenths of a percent on Wednesday. Absence of positive trigger at home front combined with somber global cues mainly triggered profit-booking at Dalal Street. Meanwhile, prevailing caution ahead of Consumer Price Inflation (CPI), IIP data and trade data for August added to the negative milieu. From the macros perceptive, street widely expects Industrial production to grow 1.8% from a year earlier in July, slower than June's 3.4% increase, while India's consumer price inflation, closely tracked by the Reserve Bank of India, is expected to come down to 7.80% in August from July's 7.96%. Besides, plunge of frontline blue-chip stocks, also led to pressure, especially the losses of ITC, Reliance and Infosys weighed on the sentiment.

On the global front, Asian shares tumbled on Wednesday as markets wagered the Federal Reserve would raise interest rates earlier than expected, which in turn sent US bond yields higher and the dollar well bid near 14-month highs against a basket of major currencies. Meanwhile, European shares fell for a fourth straight day on Wednesday, taking cues from weak Asian shares and overnight drop in US markets, as the prospect of a tightening in US monetary conditions unnerved investors at a time of heightened geopolitical uncertainty.

Closer home, in the extremely disappointing session of trade, where across the board selling took place, only stocks from Realty and Power counters managed to evade the selling pressure. On the flip side, stocks from Consumer Durables, Oil & Gas and FMCG counters were the top losers of the session. Meanwhile, banking shares also suffered the brunt of profit-booking on reports that the collective exposure of banks to coal blocks which are under legal scrutiny and related industries stands at a whopping Rs 4 lakh crore.  Besides, Metal shares took a beating for yet another session after the Supreme Court (SC) reserved its final order on whether the illegal coal block allocations should be axed, after the NDA government and coal block allottees took to different stands on cancellation of the allotments without referring them to a scrutiny committee. Additionally, Auto stocks which were holding up during the session after data released by the Society of Indian Automobile Manufacturers (SIAM), suggested that domestic passenger car sales grew by 15.16% to 153,758 units in August this year as compared to 1,33,513 units in the same month of 2013, too surrendered to selling pressure by close of trade. The market breadth on the BSE remained in the favour of advances; advancing and declining stocks were in a ratio of 1743:1276, while 88 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower by 207.91 points or 0.76% at 27057.41 after trading in a range of 27018.11 and 27251.44. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.08%, while Small cap index up by 0.60%. (Provisional)

The gaining sectoral indices on the BSE were Realty up by 0.61% and Power up by 0.11% while, Consumer Durables down by 1.56%, Oil & Gas down by 1.49%, FMCG down by 1.48%, IT down by 1.06% and Capital Goods down by 0.99% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sesa Sterlite up by 1.88%, ICICI Bank up by 1.80%, Tata Power up by 1.69%, Bajaj Auto up by 1.05% and Tata Steel up by 0.48%. On the flip side, Hero MotoCorp down by 2.08%, Coal India down by 2.08%, ITC down by 1.85%, HDFC down by 1.82% and Infosys down by 1.79% were the top losers. (Provisional)

Meanwhile, to better reflect the changes in Indian economy, the government has initiated the process to change the base year to 2011-12 from current 2004-05 for computing the country's gross domestic product (GDP).  Prices of the base year allows statisticians or economists to examine and compute the performance of the economy in real terms through the macroeconomic aggregates like GDP, national income, consumption expenditure and capital formation.

Ministry of Statistics has highlighted that with the passage of time, new products are manufactured and new data is added, expressing the need to change the base year. However, there will not be change in methodology for computing the GDP.

The government periodically revises the base year for computing the GDP to take into account the structural changes which take place in the economy and to depict a true picture of the economy through macro aggregates. The first official estimates of national income were prepared by the Central Statistical Organisation (CSO) for the estimates at constant prices. The base years of the National Accounts Statistics series have been shifted from 1948-49 to 1960-61 in August 1967; from 1960-61 to 1970-71 in January 1978; from 1970-71 to 1980-81 in February 1988; and from 1980-81 to 1993-94 in February 1999. After that it was changed to 2004-05 in the year of 2006.

India VIX, a gauge for markets short term expectation of volatility surges 1.35% at 12.93 from its previous close of 12.73 on Tuesday. (Provisional)

The CNX Nifty edged lower by 58.85 points or 0.72% at 8094.10 after trading in a range of 8082.10 and 8135.75. There were 14 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were IDFC up by 2.08%, DLF up by 1.64%, ICICI Bank up by 1.58%, Power Grid Corporation up by 1.57% and Sesa Sterlite up by 1.56%. On the flip side, Cairn India down by 2.66%, Hero MotoCorp down by 2.43%, BPCL down by 2.27%, ITC down by 2.00% and Infosys down by 1.84% were the top losers. (Provisional)

European Markets were trading mostly in the red; Germany’s DAX was down by 0.03% and France’s CAC was down by 0.04%, while and UK’s FTSE 100 was up by 0.07%.

Asian markets ended mostly in red on Wednesday, with the benchmark indices poised for its lowest close in four weeks, following a retreat in US equities on concern about the pace of Federal Reserve interest-rate increases. Korean market was closed for the day as Chuseok holidays is extended due to substitute holiday. Bank of Japan Deputy Governor Kikuo Iwata stated that consumer prices are likely to increase further along with wages. The year-on-year rate of increase in the CPI is expected to accelerate moderately, along with increasing wages, against the backdrop of rising inflation expectations as well as improvements in the output gap, given that Japan’s economy is expected to continue growing at a pace above its potential. The majority of the nine-board shared the view that Japan can achieve the 2% price stability target at around fiscal 2015.

Japan’s core machinery orders rose for a second straight month in July, though the data failed to dispel some doubts about the strength of business investment that is needed to propel Japan out of the slump caused by April's sales tax hike. Japan’s Core Machinery Orders fell to 3.5%, from 8.8% in the preceding month. Japan’s Corporate Goods Price Index fell to a seasonally adjusted annual rate of 3.9%, from 4.3% in the preceding month.