Post Session: Quick Review

In the extremely dilly-dally session of trade, Indian equity markets shifted gears couple of times to finally settle in the favour of red, with losses, of over around two tenths of a percent, which kept both Sensex and Nifty sub psychologically crucial 27,100 and 8,100 levels respectively. Profit-booking took toll at Dalal Street for third consecutive session amidst somber global cues, though the session seemed as the one with positive close up-till the wee hours of trade, the selling pressure which gripped the street in the dying minutes mainly led to a negative close. However, broader indices staging quite a degree of outperformance went home with gains of around 1.50%.

Prevailing caution ahead of the release of crucial macro-economic data such as July industrial output and August Retail inflation weighed on the sentiment of local equity markets. The street 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 edge lower to 7.80% in August from July's 7.96%.

On the global front, Asian pacific shares settled mostly lower on Thursday after Chinese released data showing inflation remained tepid in August, while lower overnight close of US markets after President Obama said he was prepared to order airstrikes on Syrian territory as part of an expanded counter-terrorism plan to confront the Islamic State jihadist group that is operating in both Syria and Iraq. Meanwhile, European shares, giving up all their gains, also were reeling under pressure as concerns regarding U.S. monetary policy weighed on the markets.

Closer home, while most of the sectoral indices, with no surprise concluded into negative territory, stocks from Infrastructure, Auto, Power and FMCG counters ended in green. On the flip side, Metal, Oil & Gas and Realty counters were the worst hit of the session. Additionally, Healthcare counter too took a beating for the worse with the plunge being led by shares of Sun Sun Pharmaceuticals Industries, which dipped 5% on reports that the company’s manufacturing facility in Halol (Gujarat) was undergoing a surprise inspection by the US Food and Drug Administration (US FDA).

Besides, shares of disinvestment candidates such as Oil and Natural Gas Corporation (ONGC), Coal India and NHPC also succumbed to selling pressure after the Union Cabinet on Wednesday cleared a dilution of the government's stake in these companies. However, fertilizer stocks witnessed strong demand and were trading higher on back of heavy volumes in otherwise weak market on the bourses. In a related development for the industry, with an aim to achieve sustainable growth in food production and incorporate global best practices in fertiliser usage, the centre in planning to bring out a new fertiliser policy for the country. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1186:716; while 17 shares remained unchanged.The market breadth on the BSE remained in the favour of advances; advancing and declining stocks were in a ratio of 1987:1077, while 95 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower by 76.56 points or 0.28% at 26980.85 after trading in a range of 26904.50 and 27150.78. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.07%, while Small cap index up by 1.43%. (Provisional)

The gaining sectoral indices on the BSE were Infrastructure up by 1.19%, Auto up by 0.56%, Power up by 0.56%, FMCG up by 0.45% and Capital Goods up by 0.45% while, Metal down by 1.14%, Oil & Gas down by 0.60%, Realty down by 0.42%, PSU down by 0.38% and Consumer Durables down by 0.03% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.08%, BHEL up by 1.39%, Hero MotoCorp up by 1.04%, Hindustan Unilever up by 1.00% and Tata Power up by 0.95%. On the flip side, Sun Pharma Industries down by 4.38%, Coal India down by 3.58%, ONGC down by 3.51%, Wipro down by 1.41% and Mahindra & Mahindra down by 0.86% were the top losers. (Provisional)

Meanwhile, in order to tide over the revenue shortfall, the government has approved a proposal for diluting equity stake in blue chip companies Coal India, ONGC and NHPC, which is likely to fetch around Rs 43,000 crore to exchequer.

At present, the government shareholding in the coal mining company is 89.65 percent and will disinvest 10 percent stake worth around Rs 23,000 crore. Government stake in ONGC stands at 68.94 percent and will disinvest 5 percent stake worth Rs 18,000 crore. Besides these two, 11.36 percent disinvestment in hydro power generator NHPC was also approved. The government holds 85.96 percent stake in company and expected to garner worth Rs 2,800 crore respectively. The stake sale in the three companies would be done through the Offer for Sale (OFS) process, popularly known auction route. The government has already selected merchant bankers for managing ONGC and NHPC disinvestment and is in the process for Coal India.

The disinvestment proceed will help the government to narrow fiscal deficit as well as can be used to provide much-needed push to economic growth. Furthermore, the government is likely to take advantage of robust state of domestic stock markets helped by heavy inflow of funds from the foreign institutional investors (FIIs).

Meanwhile, the government has missed its disinvestment target for past five consecutive financial years. During FY11 and FY12, the government had raised Rs 22,144 crore and Rs 13,894 crore through disinvestment, against the budgeted target of Rs 40,000 crore in each year. In FY13, it had raised Rs 23,956 crore, as against the target of Rs 30,000 crore. In the previous fiscal, the government was able to disinvest only around Rs 16,000 crore as against the set target of Rs 40,000 crore mainly on account of subdued economic and markets conditions.

India VIX, a gauge for markets short term expectation of volatility declined 3.42% at 12.48 from its previous close of 12.93 on Wednesday. (Provisional)

The CNX Nifty edged lower by 11.70 points or 0.14% at 8082.40 after trading in a range of 8057.30 and 8127.95. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were IDFC up by 3.52%, SBI up by 2.20%, Bank of Baroda up by 1.93%, BHEL up by 1.44% and PNB up by 1.36%. On the flip side, Sun Pharma Industries down by 4.46%, ONGC down by 3.56%, Coal India down by 3.25%, NMDC down by 2.32% and Lupin down by 1.84% were the top losers. (Provisional)

European Markets were trading mostly in the red; France’s CAC was up by 0.17% and UK’s FTSE 100 was down by 0.12%, while Germany’s DAX was up by 0.15%.

Asian markets ended mostly in red on Thursday, with the benchmark index heading its sixth day of decline, as investors weighed Chinese inflation data. China’s consumer inflation cooled more than expected in August, further evidence that the economy is losing momentum, but economists are divided over whether Beijing will use the extra room to announce fresh stimulus measures. The consumer price index (CPI) rose 2.0 percent in August from a year earlier, missing market expectations for 2.2 percent and down from 2.3 percent in July. The producer price index fell 1.2 percent, its 30th consecutive monthly decline, as weak economic conditions continue to rob Chinese companies of pricing power. The market had expected a 1.1 percent decline after a drop of 0.9 percent in July. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 0.5%, from 7.0% in the preceding month.

Confidence at big Japanese manufacturers turned positive in July-September and they expect business conditions to improve further in the following quarter, a government survey showed, suggesting a gradual economic recovery from the slump after April’s sales tax hike. The survey also showed that companies are growing more positive on business investment, boding well for the government’s goal of fostering a sustainable growth cycle led by pick up in business activity, higher wages and stronger consumer spending. The business survey index (BSI) of sentiment at large manufacturers stood at plus 12.7 in July-September, improving from minus 13.9 in the prior three months. Japan’s BSI large manufacturing conditions rose to a seasonally adjusted annual rate of 12.7, from -13.9 in the preceding quarter.