Post Session: Quick review

Markets ended downbeat on Tuesday on prevailing caution ahead of state election in Maharashtra and Haryana on October 15, which dragged both Sensex and Nifty below the psychologically crucial 26,500 and 7,900 levels respectively, with losses in the range of 0.10%-0.25%. Frontline equity indices, which witnessed sharp recovery in the afternoon deals, faltered by the close of trade on account of intense selling pressure as market-participants preferred winding up their position ahead of holiday on account of state elections, however losses were limited on account of release of good macro-economic data, with the first one being the September WPI data, which came in at five year low at 2.38% v/s 3.74% in August and the second one being all time low September Retail Inflation data, which came at 6.46% in September, lowest since the launch of the new series of Consumer Price Index in 2012, as compared to 7.80% in August. However, reports suggesting that the central government is likely to defer the rollout of the general anti-avoidance rule (GAAR) that was supposed to come into effect from April 1, 2015, had a little impact on the markets in the backdrop of negative global set-up.

On the global front, the decline in Asian stocks over the past three months accelerated Monday, with Taiwan and the Philippines each tumbling more than 2.5%, as worries over slowing global growth weighed on shares. Meanwhile, European stocks fell early on Tuesday, losing ground for the seventh time in 10 sessions tracking steep losses on Wall Street as investors fret about the strength of the global economy.

Closer home, most of the sectoral indices on BSE concluded into negative territory, nevertheless the worst hit were the stocks from Realty, followed by IT and Consumer Durables counters. Realty counter fall was led by shares of real estate major DLF, which recorded the sharpest single day fall since the company's listing on the bourses on July 2007, after the market regulator, Securities and Exchange Board of India (Sebi), barred real estate major and six of its top executives, including Chairman K P Singh, from accessing the capital market for three years. Meanwhile, IT stocks witnessed profit-booking after two straight session of gains. Besides, Auto stocks also ran out of steam after latest data released by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales declined to 1,54,882 units in September from 1,56,494 units in September 2013. This development offset the gains witnessed on account of reports suggesting the likelihood of cut in fuel prices after state elections.

On the flip side, maximum demand was witnessed by stocks from Power counter, followed by Infrastructure up by 0.53% and Banking space. Banking shares edged higher in otherwise subdued market after the Wholesale Price Index (WPI)-based inflation declined to its lowest level in five years at 2.38% in September from 3.74% in the previous month. The market breadth on the BSE remained in the favour of decliners; where advancing and declining stocks were in a ratio of 1300:1620, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower at 26349.33, down by 34.74 points or 0.13% after trading in a range of 26212.01 and 26550.79. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.18%, while Small cap index down by 0.14%. (Provisional)

The gaining sectoral indices on the BSE were Power up by 0.57%, Infrastructure up by 0.53%, Bankex up by 0.52%, PSU up by 0.19% and Healthcare up by 0.13% while, Realty down by 9.24%, IT down by 0.77%, Consumer Durables down by 0.63%, Oil & Gas down by 0.54% and TECK down by 0.50% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Power up by 2.96%, Tata Steel up by 1.97%, Axis Bank up by 1.78%, Coal India up by 1.69% and TCS up by 1.60%. On the flip side, Mahindra & Mahindra down by 3.75%, Cipla down by 2.86%, Sun Pharma down by 1.81%, Dr. Reddys Lab down by 1.79% and BHEL down by 1.25% were the top losers. (Provisional)

Meanwhile, easing at 33 month low, India's main inflation gauge, based on monthly WPI, stood at 2.78% for the month of September as compared to 3.74% in the previous month and 7.05% during the corresponding month of the previous year. The reading was way below the street expectation, which were expecting figure to be above 3% mark for the month under review. However, July inflation figures were revised upwards to 5.41% from 5.19% earlier. Meanwhile, build up inflation rate in the financial year so far was 2.61% compared to a build up rate of 6.23% in the corresponding period of the previous year. The reading which was lowest since October, 2009 was mainly on the back of lower food and fuel inflation.

Fuel & Power index, which occupies 14.91% weight in the overall index, declined by 0.3% to 213.4 (provisional) from 214.0 (provisional) for the previous month due to lower price of petrol (4%), bitumen (2%) and aviation turbine fuel and furnace oil (1% each).  However, the price of lubricants (4%) and high speed diesel (1%) moved up. Meanwhile, the index of Manufactured Products, which occupies the majority 64.97% weight in WPI index, rose by 0.2% to 175.1 (provisional) from 174.7 (provisional) in August. 

Additionally, Primary Articles index, which occupies 20.12% weight in the overall headline index, declined by 1.3% to 258.2 (provisional) from 261.7 (provisional) for the previous month. Out of the index, 'Food Articles’ group declined by 1.4% to 261.8 (provisional) from 265.4 in the previous month, while index for  ‘Non-Food Articles’  group declined by 2.00% to 214.3 (provisional) from 218.7 for the previous month.

The latest data adds to signs of RBI considering the case for rate cut in its upcoming monetary policy since central bank takes into consideration both Retail and WPI inflation while deciding upon its monetary policy. Earlier, in an encouraging development, India’s consumer price inflation eased at an all time low level since the launch of the new series of Consumer Price Index in 2012, at 6.46% in September as compared to 7.80% in August, helped by the lower prices of food and fuel.

India VIX, a gauge for markets short term expectation of volatility rose 0.63% at 14.59 from its previous close of 14.50 on Monday. (Provisional)

The CNX Nifty ended lower at 7864.00, down by 20.25 points or 0.26% after trading in a range of 7825.45 and 7928.00. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 3.57%, Bajaj Auto up by 2.69%, Axis Bank up by 2.64%, Indusind Bank up by 2.33% and Tata Power up by 2.11%. On the flip side, DLF down by 28.56%, BPCL down by 2.30%, Cairn India down by 1.98%, HCL Tech. down by 1.87% and Tata Motors down by 1.66% were the top losers. (Provisional)

European Markets were trading in the red; UK’s FTSE 100 was up down 0.70%, France’s CAC was down by 1.14% and Germany’s DAX was down by 0.98%.

Asian markets ended mostly in red on Tuesday, with the regional benchmark index heading for a six-month low, as global equities extended losses after the Standard & Poor’s 500 Index capped its biggest three-day loss since 2011. Singapore’s economy expanded more than estimated in the third quarter, adding to evidence that increasing global demand is fueling the island’s manufacturing pickup. Gross domestic product rose an annualized 1.2 percent in the three months through September from the previous quarter, when it contracted a revised 0.1 percent. Singaporean GDP remained unchanged at a seasonally adjusted 2.4% versus forecast level of 2.8%. Singapore’s manufacturing output has benefited from a recovery in overseas demand, even as the government implements a 10-year plan to reduce reliance on cheap foreign workers and boost productivity which has caused a labor shortage and pushed up wage costs.

South Korea’s central bank is expected to cut its benchmark interest rate tomorrow to the record-low 2 percent used to fight an economic slump at the height of the global financial crisis. The seven-day repurchase rate will be lowered by 25 basis points. The rate-cut speculation mounted after Finance Minister Choi Kyung Hwan last month stated that there was sufficient policy room to boost an economy struggling from weak domestic demand, views he echoed before investors in New York on October 9. Japan’s M2 Money Stock remained unchanged at a seasonally adjusted 3.0%.