Post Session: Quick review

Local equity markets witnessed consolidation on Friday, after gaining the most over three months in previous trading session, as investors wound up their positions in equities ahead of the F&O expiry week, which took both Sensex and Nifty below psychologically crucial 27,100 and 8,150 levels respectively by close of trade. In the extremely choppy session of trade, benchmarks recovered several times after slipping below neutral line, however failed to show resilience against the final blow during the dying hours of trade as investors typically booked away profits at higher levels, which dragged the markets to-day’s lowest point. However, Small-cap index acting contrary to the trend, went home with splendid gains of over half a percent, while Midcap index just about managed to keep its head above water by concluding tad bit into positive territory. For the week, while Sensex and Nifty gathered gains of around two tenths of a percent, while CNX Midcap index took a hit of around 1.50%

On the global front, Asian shares concluded higher on Friday, cheered by news of an eye-popping initial public offering by Chinese e-commerce giant Alibaba Group, while a survey published showed support for Scotland to remain in the United Kingdom also aided the sentiment. Meanwhile, European shares too receiving positive handover from Asian counterparts, edged higher on Friday.

Closer home, losses to some extent were capped on account of optimistic statements by Finance Secretary Arvind Mayaram, who underscored that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7 per cent in 2-3 years. On the BSE, stocks from IT, Consumer Durables and Healthcare counters were the only gainers of the session, while much of the drubbing was witnessed by stocks from Capital Goods, Oil & Gas and Public Sector Undertaking counters. Exporters shares gained on hopes they were better placed to weather any Fed-related volatility, gains in IT counter also spurred by TCS stocks, which gained 2% after the company announced that it will work together with Bosch Software Innovations to develop an ecosystem to enable innovative solutions for the connected world and connected enterprises. The market breadth on the BSE remained in the favour of decliners; advancing and declining stocks were in a ratio of 1439:1613, while 103 scrips remained unchanged. (Provisional)

In stock specific activity, shares of Tata Group also edged higher in otherwise subdued market after global rating agency Moody's has upgraded the ratings for many group firms including Tata Motors, Tata Steels and Tata Consultancy Services (TCS).

The BSE Sensex ended slightly lower by 21.79 points or 0.08% at 27090.42 after trading in a range of 27047.68 and 27247.17. There were 17 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.04%, while Small cap index up by 0.63%. (Provisional)

The gaining sectoral indices on the BSE were IT up by 1.39%, TECK up by 1.13% and Consumer Durables up by 0.07%, while Capital Goods down by 1.89%, Oil & Gas down by 1.22%, PSU down by 0.97%, Realty down by 0.81% and Auto down by 0.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.36%, Axis Bank up by 1.42%, Maruti Suzuki up by 1.19%, Cipla up by 1.16% and Wipro up by 0.87%. On the flip side, Larsen & Toubro down by 2.26%, SBI down by 1.94%, ONGC down by 1.60%, Hindustan Unilever down by 1.54% and Mahindra & Mahindra down by 1.14% were the top losers. (Provisional)

Meanwhile, in a vigilant exercise to safe-guard the country from external shocks, India pitched the need to actively explore currency swap agreements to all the fellow emerging economies at the meeting of G-20 deputies in Cairns, Australia, on Thursday, in a joint solution to mitigate risks which the emerging economies face as the US gradually winds down its stimulus programme.

Finance secretary Arvind Mayaram at the gathering of finance ministers and central bankers, pressed upon the need for IMF to analyze upon the costs and the benefits that these swaps would bring if they were put in place and evaluate the loss on GDP in the face of exogenous shocks, in scanerio of both absence and presence of these swaps.

Further, Mayaram highlighted that if swap facilities would be utilized, the benefits would include a reduction in the negative shock to EMs and global GDP. Adding that the benefits to the global financial system could potentially be large as it would reduce the amount of self-insurance that countries would otherwise require.

Noting that the QE policy has had an impact on the currency markets of many of the emerging market economies Finance Secretary Arvind Mayaram has suggested currency swap lines among G20 nations. Further, testifying these views, the finance secretary underscored that the decisions on the exit from the QE programme that came in after the US Federal Reserve's meeting yesterday also had an impact on the currency markets of many of the emerging market economies. After the meeting, the US Federal Reserve decided to continue with near-zero interest rate regime and has cut down on asset purchases. However, he did not provide a specific time frame on when the interest rates could be hiked.

Lastly, stressing upon the need of uncertainty and volatility in external environment, Mayaram asserted that it was imperative the emerging market economies, including India, continued the path of structural reforms and the solution to this problem required their attention. He added that strength of G20 lied in taking international collaborative actions and not limiting to the individual country growth strategies.

India VIX, a gauge for markets short term expectation of volatility declined 3.54% at 11.88 from its previous close of 12.32 on Thursday. (Provisional)

The CNX Nifty ended marginally higher by 6.70 points or 0.08% at 8,121.45 after trading in a range of 8105.35 and 8160.90. There were 28 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 2.72%, Zee Entertainment up by 2.27%, HCL Tech up by 2.24%, Grasim Industries up by 2.21% and Tech Mahindra up by 2.15%. On the flip side, Jindal Steel & Power down by 4.68%, Larsen & Toubro down by 2.65%, ONGC down by 2.39%, SBI down by 2.00% and DLF down by 1.91% were the top losers. (Provisional)

European Markets were trading in the green; France’s CAC was up by 0.37%, Germany’s DAX was up by 0.74% and UK’s FTSE 100 was up by 0.56%.

Asian markets ended in green on Friday, with Japanese Nikkei 225 closing at its highest level since November 2007, as exporters advanced after the yen weakened past 109 per dollar for the first time since 2008. Asian currencies dropped for a third week, the longest run of losses since January, as the prospect of higher US interest rates dims the appeal of emerging-market assets. Indonesia’s rupiah and Malaysia’s ringgit led the declines. Japan’s government cut its overall economic assessment for the first time in five months as private consumption is struggling to recover from the slump caused by April’s sales tax hike, clouding the outlook for a sustained recovery. The government cut its view on private consumption, which accounts for about 60 percent of the economy, saying that consumer spending is seen pausing although a pick-up trend remains intact. Japan’s All Industries Activity Index fell to a seasonally adjusted -0.2%.