Post Session: Quick Review

27 Oct 2014 Evaluate

Markets witnessed correction after five straight sessions of gains on Monday, which dragged Sensex and Nifty below the psychologically crucial 26,800 and 8,000 levels respectively, with loss of around three tenth of a percent. Much of the selling crept into the market in the final hour of trade even as bourses flip-flopped between green and red territory in the afternoon deals in the wake of mixed global set-up and traders’ reluctance in taking position at the start of F&O expiry week. In the abysmal session of trade, broader indices witnessing profit-booking concluded with a cut in the range of 0.15%-0.85%.

On the global front, Asian pacific shares ended mixed after a trading program letting more foreign investment into mainland China was delayed, however upbeat earnings and U.S. economic data that eased recent global growth fears and sharpened risk appetite limited further losses. Meanwhile, European shares giving muted reaction to euro zone bank health checks were trading in negative territory in early deals. Even as stress tests were slightly better than markets had expected, they serve as a reminder that much work remains. The euro zone banking sector's long-term attractiveness has been damaged by revelations of extra non-performing loans and hidden losses that will dent future profits.

Closer home, most of the sectoral indices on BSE succumbed to selling pressure, nevertheless stocks from Realty, Oil & Gas and Fast Moving Consumer Goods were the top losers of the session. Over 8% slump of DLF on reports of probe by BJP in Vadra-DLF deal mainly dragged Realty counter down in dumps. Further, in line with estimates’ HUL results fail to excite FMCG stocks and also the company’s shares which slumped over 4% after reporting Q2FY15 net profit. Hindustan Unilever, the Indian unit of consumer goods giant Unilever Plc, reported in line with street estimates second-quarter net profit growth of 8% as sales remained robust despite the country's slower economic growth. The company’s net profit for the quarter stood at at Rs 988.16 crore for the quarter ended September 30, 2014 as compared to Rs 913.8 crore for the same quarter in the previous year. On the flip side, much of the demand was witnessed by stocks from Consumer Durables, Capital Goods and banking counters. Reports which suggested of Finance Minister Arun Jaitley favoring interest rate cut to revive the economy, mainly lifted banking shares. The market breadth on the BSE remained in the favour of decliners; where advancing and declining stocks were in a ratio of 1258:1602, while 108 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 26752.90, up by 98.15 points or 0.37% after trading in a range of 26726.84 and 26994.96. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.84%, while Small cap index down by 0.19%. (Provisional)

The gaining sectoral indices on the BSE were Consumer Durables up by 2.11%, Capital Goods up by 0.70%, Bankex up by 0.48%, Power up by 0.47% and Healthcare up by 0.16%, while Realty down by 3.79%, Oil & Gas down by 1.45%, FMCG down by 1.06%, Infrastructure down by 0.88% and TECK down by 0.79% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were BHEL up by 5.17%, Dr. Reddys Lab up by 1.79%, Coal India up by 0.81%, GAIL India up by 0.76% and Larsen & Toubro up by 0.67%. On the flip side, Hindustan Unilever down by 5.40%, Tata Motors down by 2.60%, ONGC down by 2.44%, Tata Steel down by 1.79% and Hindalco down by 1.34% were the top losers. (Provisional)

Meanwhile, foreign direct investment (FDI) in India’s services sector has declined by 9% to $1.08 billion during the April-August period of the ongoing fiscal as compared to $1.19 billion during the first five months of the previous fiscal. Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represents around 60% share of the country’s GDP.

However, overall FDI during the April-August FY15 jumped by 42% y-o-y to $12.01 billion from $8.46 billion recorded in the corresponding period of the previous fiscal. Among other sectors that received highest inflows during the first five months of current fiscal include telecommunications ($2.33 billion), pharmaceuticals ($903 million) and construction ($446 million). Country wise, maximum FDI during the reported period was received form Mauritius with $3.93 billion followed by Singapore ($1.89 billion), Netherlands ($1.56 billion), Japan ($897 million), UK ($827 million) and the US ($394 million).

During FY14, FDI increased by 8% to $24.29 billion from $22.42 billion recorded in the FY13. India would require around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. However, to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has decided to raise FDI limit to 49% in the insurance sector from the current level of 26%.

India VIX, a gauge for markets short term expectation of volatility dropped 2.25% at 13.51 from its previous close of 14.16 on Thursday. (Provisional)

The CNX Nifty ended at 7991.70, up by 22.85 points or 0.29% after trading in a range of 7985.65 and 8064.40. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 5.10%, Kotak Mahindra Bank up by 2.21%, Indusind Bank up by 1.92%, Bank Of Baroda up by 1.85% and Ambuja Cement up by 1.75%. On the flip side, Jindal Steel & Power down by 7.99%, DLF down by 7.88%, Hindustan Unilever down by 5.07%, Cairn India down by 4.05% and Tata Motors down by 2.32% were the top losers. (Provisional)

European Markets were trading in the red; UK’s FTSE 100 was down 0.81%, France’s CAC was down by 0.56% and Germany’s DAX was down by 0.49%.

Asian markets ended mixed on Monday, with China’s stocks falling for a fifth day, posting the benchmark index’s longest losing streak this year. The People’s Bank of China monetary policy advisory committee stated that China’s economic growth will slow to 7.2% in the current quarter, down from the previous three months, as domestic demand weakens. The nation’s economy will probably expand 7.3% next year. This view contrasts with a prediction by a state research institute, which expects 7% growth in 2015 unless the central government imposes stronger-than-expected stimulus measures. Indonesia’s deputy central bank governor stated that loan growth in the country may be lower than 15% this year and is seen between 15% and 17% next year. Loan growth is declining because of lower liquidity in Indonesia’s banking sector. Hong Kong Trade Balance fell to a seasonally adjusted -50.4B, from -31.5B in the preceding month. Japan’s corporate services price index (CSPI) remained unchanged at a seasonally adjusted annual rate of 3.5%, compared to the preceding month.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2290.44	-11.84	-0.51
Hang Seng	23,143.23	-158.97	-0.68
Jakarta Composite	5024.29	-48.78	-0.96
KLSE Composite	1823.15	4.29	0.24
Nikkei 225	15,388.72	97.08	0.63
Straits Times	3226.11	3.56	0.11
KOSPI Composite	1931.97	6.28	0.33
Taiwan Weighted	8627.78	-18.23	-0.21

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Post Session: Quick Review

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