Post session - Quick review

The Indian markets failed to capitalize on the surprisingly better than expected industrial output numbers. Though, the day started on a somber note as the much awaited Q2 numbers of IT bellwether Infosys disappointed the marketmen. Though, the company came up with a good numbers for the quarter in rupee term as the domestic currency has depreciated considerably in last quarter but the company cut its full-year sales forecast in dollar terms for a second time because of weaker economic growth in developed markets including Europe. The stocks of the company fell by over 8 percent with the announcement. However, the global cues too were not very supportive in the beginning as the US markets closed flat overnight, weighed by the European worries and the Asian markets too traded mixed on similar kind of developments in the region, while the inflation decreased in China, Exports lagged expectation in Japan. However, the major European markets made a positive start.

Earlier the markets made a gap-down start after the result announcements of Infosys, though the dollar term results were expected to be worse but the street was not expecting such a tepid guidance by the company. Infosys forecast dollar revenue growth of 16.4% for the fiscal year to March 31, down from 17.1% to 19.1% projected in October, as clients have tightened discretionary spending on technology. The impact was so sharp and sudden that all the IT stocks suffered sharp cuts on speculation of similar kind of fate. Not only the IT companies, but the whole market came under pressure and trade for the next two hours till the IIP numbers were announced remained in the lower range. At 11 AM when the unexpectedly higher industrial output numbers were announced the markets suddenly shoot up, taking the indices almost in green terrain, also there was supporting news of weekly inflation number remaining in the negative zone for yet another week. IIP in the month of November beating the general expectation of 2-3% stood at 5.9% after showing a sharp plunge in the previous month of (-) 5.1%.  But profit booking started on expecting weak earnings number by the India Inc. despite housing major HDFC posting a good numbers for the third quarter. Even the positive start of the European markets failed to support the domestic indices and the markets lost over half a percent by the end. While, the power, metal and rate sensitives’ held some ground IT and Technology washed out all their efforts. Though, the broader markets outperformed their larger peers and gained by about a quarter percent.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1418:1277 while 180 scrips remained unchanged. (Provisional)

The BSE Sensex lost 98.31 points or 0.61% and settled at 16,077.55. The index touched a high and a low of 16,178.58 and 15,962.59 respectively. 21 stocks advanced against 8 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index gained 0.34% while Small-cap index was up by 0.17%. (Provisional)

On the BSE Sectoral front, Power up 1.57%, Bankex up 1.31%, Auto up 1.30%, Metal up 1.30% and PSU up 0.79% were the top gainers while IT down 5.74%, TECk down 4.14%, Oil & Gas down 0.59% and Capital Goods down 0.25% were the only losers.

The top gainers on the Sensex were Tata Motors up 2.42%, Tata Power up 2.37%, SBI up 2.33%, Tata Steel up 2.12% and Hindalco Industries up 1.92%.

On the flip side, Infosys down 8.35%, TCS down 3.28%, Wipro down 2.10%, L&T down 1.53% and RIL down 1.16% were the top losers in the index. (Provisional)

With India’s industrial production growth convalescing from a revised -4.7 percent in October to close to 6 percent in November, the Planning Commission Deputy Chairman Montek Singh Ahluwalia has taken the opportunity to affirm that this expectantly signals an end to the economic slowdown and exuded confidence that it would help improve the business sentiment in the country.

Ahluwalia stated that 'clearly, the industrial growth of almost 6 percent is a good change... I think it hopefully indicates that the slowdown in industry will basically come to an end during the third quarter of the financial year.' Along with the strong IIP numbers, a string of other recent encouraging developments from the macroeconomic front have made the Planning Commission Deputy Chairman hopeful that this must lead to improvement in sentiments over the next several weeks.

A slew of indicators like manufacturing and services PMI signaling expansion, the food inflation languishing in the negative terrain since the last fortnight of 2011, rupee strengthening to one month highs, declining bond yields and foreign direct investment surging around 56 percent in November 2011, have together signaled that India’s economic activity is re-gathering momentum.

Despite being hopeful that the encouraging IIP figures could signal an end to slowdown, the Deputy Chairman was of the belief that this will not change the whole picture for 2011-12 and that the GDP growth in current fiscal will be around 7 percent and not 8 percent but a lot depends on how the last quarter of the fiscal turns out to be.

India VIX, a gauge for market’s short term expectation of volatility lost 2.07% at 24.03 from its previous close of 24.54 on Wednesday. (Provisional)

The S&P CNX Nifty lost 16.30 points or 0.34% to settle at 4,844.65. The index touched high and low of 4,869.20 and 4,803.90 respectively. 38 stocks advanced against 12 declining ones on the index. (Provisional)

The top gainers on the Nifty were Sesa Goa up 4.94%, IDFC up 3.56%, JP Associates up 3.25%, Grasim up 3.18% and Reliance Power up 3.14%.

On the other hand, Infosys down 8.36%, TCS down 3.58%, HCL Tech down 2.24%, Wipro down 2.16% and L&T down 1.75% were the top losers. (Provisional)

The European markets traded in green, with France's CAC 40 up 0.81%, Germany's DAX up 0.72% and Britain’s FTSE 100 up 0.18%.

Asian equities exhibited sluggish trade throughout the day’s trade and snapped the session mostly in the red on Thursday, amid inflation data in China that failed to meet expectations and fears of a possible recession in Europe. Data released on Thursday showed Chinese inflation eased slightly in December to 4.1 percent, from November’s 4.2 percent. Meanwhile, growth problems in Europe continued to spook investors. Germany reported Wednesday that its economy shrank slightly at the end of last year. And the European Union revised its figures for economic growth in the third quarter to 0.1 percent, its slowest pace in more than two years.

Japanese Nikkei average fell on Thursday in profit-taking ahead of a futures settlement, as market participants fretted over key debt auctions. Moreover, Taiwan stocks ended flat as investors remained sidelined amid a tight race for the island's presidential vote on Saturday. However, South Korea’s Seoul bucked the regional trend to finish up over a percentage point after dropping in five of the last six sessions.