Post Session: Quick Review

Markets went through a choppy trade on Wednesday after suffering major blow in the passing one, mainly on the back of feeble global cues. While, there wasn’t any major trigger to pull the markets higher, there were incidents of profit booking fearing global growth concerns that pulled the markets lower. Major indices never looked confident from the beginning, though there were couple of attempts of recovery but they could not held long the benchmarks in green and gave up to selling pressure.

The global cues remained somber and weighed heavily on the domestic market sentiments with the US markets plunging overnight after the International Monetary Fund (IMF) cut its global growth forecast to 3.8 percent for 2015, from 4 percent. The Asian markets too made a dismal start and barring Shanghai most of the major markets in the region closed with sharp losses. Later the European markets continued their bear run and made a soft start, unable to support recovery in the Indian markets.

Back home, choppiness persisted till the end and markets despite some last hour cover up could not manage a close in green. The weakness that was visible since morning lingered till last, the only face saver was that benchmarks recovered from their day’s low and Nifty that looked pretty close to breaching the psychologically crucial level of 7800, ended with modest losses only. There was some positive report that helped in early recovery of the markets. The World Bank’s twice-a-year South Asia Economic Focus report said that India is set to grow by 6.4 percent in 2015-16 as against 5.6 percent in 2014-15. Other global agency IMF, said that India has recovered from its relative slump and its growth is expected to exceed five percent again and it hiked its 2014-15 growth forecast to 5.6%, citing better exports and investment prospects under the new Narendra Modi government. Shares of PSU oil companies surged after Brent crude fell to 27-month low on global growth and oil glut concerns. Not only the oil marketing companies but the upstream companies like ONGC and Oil India too moved higher on hopes of less subsidy burden sharing. Fertiliser stocks like RCF and Chambal Fertilizers too were in limelight on reports suggesting that the government has notified new urea investment policy, saying plants will continue to receive subsidy for 8 years post commencement of production. On the other hand the IT and tech sector remained in somber mood since morning after some rating downgrade by investment banker, saying that the bull run of the IT sector is nearing its end. Infosys, Wipro Tech Mahindra, HCL Tech, all were down in the range of 3-5%.

The BSE Sensex is currently trading at 26246.79, down by 25.18 points or 0.10% after trading in a range of 26150.09 and 26338.31. There were 19 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.23%, while Small cap index up by 0.06%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.69%, PSU up by 1.61%, Capital Goods up by 1.61%, Realty up by 1.57%, Metal up by 1.13% while, IT down by 3.44%, TECK down by 2.83% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.52%, Larsen & Toubro up by 2.32%, ONGC up by 2.30%, NTPC up by 2.24% and BHEL up by 2.10%. On the flip side, Infosys down by 4.70%, Dr Reddys Lab down by 4.37%, Sun Pharma Inds down by 4.31%, Wipro down by 4.03% and Cipla down by 2.51% were the top losers.

Meanwhile, the International Monetary Fund (IMF), in its World Economic Outlook update, has stated that India has recovered from its relative slump and hiked its 2014-15 growth forecast to 5.6%, citing better exports and investment prospects under the new Narendra Modi government. Earlier, in April the IMF had projected 5.4% economic growth for 2014-15. Further, the Washington-based fund has highlighted that Asia's third-biggest economy would expand by 6.4% in the next fiscal, unchanged from its previous prediction.

Over the past two fiscal years, Indian economic has been struggling with slowdown and its growth stayed below 5% for the second year in a row at 4.7% during FY14. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the economy has shown signs of nascent recovery during the first quarter of current fiscal. India’s economy expanded at its fastest pace in more than two years by 5.7% during the April-June quarter of current fiscal as compared to 4.7% growth recorded in same quarter last year.

On global front, the IMF trimmed its forecast for global economic growth underscoring the widening divide between the accelerating US recovery and stagnation or slowdown in the eurozone and Asia. The IMF projected the global economy will grow 3.3% this year, down from its 3.4% forecast in July. The fund expects 3.8% growth in 2015 vs. its previous 4% estimate.

The CNX Nifty is currently trading at 7842.70, down by 9.70 points or 0.12% after trading in a range of 7815.75 and 7869.90. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were DLF up by 5.12%, Indusind Bank up by 3.94%, BPCL up by 3.71%, Tata Steel up by 3.64%, ONGC up by 2.37%. On the flip side, Infosys down by 4.73%, Tech Mahindra down by 4.69%, Dr. Reddys Lab down by 4.29%, Sun Pharma Inds. down by 4.20% and Wipro down by 4.03% were the top losers.

European Markets made another weak start and Germany’s DAX declined by 84.39 points or 0.93% to 9,001.82, UK’s FTSE 100 was lower by 36.11 points or 0.56% to 6,459.47 and France’s CAC was down by 33.33 points or 0.79% to 4,175.81.

Asian markets ended mostly in red on Wednesday, after the International Monetary Fund cut its forecast for global growth. The IMF however stated that Japan’s gross domestic product will expand 0.8 percent next year, compared with a 1.1 percent advance predicted in July. China’s benchmark stock index rose to a 19-month high, led by property developers, after policy makers eased real-estate curbs for the first time since the global financial crisis. Growth in China’s services sector weakened slightly in September as new business cooled, reinforcing signs of a slowdown in the world’s second-largest economy that could prompt more stimulus measures. The services Purchasing Managers’ Index (PMI) compiled by HSBC/Markit pulled back to 53.5 in September from a 17-month high of 54.1 in August.

Japan’s Current Account rose to a seasonally adjusted 0.13T, from 0.10T in the preceding month while Japan’s Economy Watchers Current Index remained unchanged at a seasonally adjusted 47.4 compared to the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.1%, from 0.3% in the preceding quarter.