Post Session: Quick Review

Last hour recovery led to positive close for local equity markets, which concluded above psychologically crucial 28,000 (Sensex) and 8,300 (Nifty) levels respectively, with slender gains of around one tenth of a percent. Local equity markets, which started on optimistic note amidst hopes of faster economic growth on Sunday’s union cabinet expansion, failed to sustain the early euphoria and slipped into negative territory in afternoon deals. While, the mood remained downbeat for most of the afternoon, recovery, which emerged in the last hour of trade, mainly acted as saving grace for markets.

Sentiments to some extent were spooked by RBI’s deputy governor’s hawkish statements, HR Khan, who pouring cold water on hopes of rate cut in upcoming monetary policy, highlighted that recent decline in inflation did not mean the decline was permanent. He also emphasized that though decline in crude oil prices and other commodities were beneficial to Indian economy, but policy makers just could not jump their guns until they were convinced the trend was firmly established. Additionally, disappointing earnings of market bellwether, L&T also weighed on the sentiment. L&T stocks tanked over 3% after the company reported 20.5% jump in standalone net profit at Rs 1,042 crore during quarter ended September 2014 as compared to net profit of Rs 865 crore in the corresponding quarter last fiscal. However, broader indices, acting contrary to the trend, went home with gains of around 0.15%.

On the global front, a landmark deal to give global investors easier access to China's $3.9 trillion stock market lifted Asia pacific shares to their highest in over a month on Monday, as tensions in Libya and Ukraine pushed up oil prices. Chinese shares jumped 2.5% and Hong Kong's Hang Seng index. Meanwhile, European shares stocks inched higher early on Monday, reversing some of the previous session's losses, with Nutreco surging 14% as SHV sweetened its takeover bid for the Dutch animal feed and Nutrition Company.

Closer home, almost all the sectoral indices on BSE concluded into negative territory, however stocks from Fast Moving Consumer Goods (FMCG), Power and Healthcare counters were the prominent gainers of the session. On the flip side, massive drubbing was witnessed by stocks from Oil & Gas counter, followed by Capital Goods and Banking counters. Pharma stocks turned out to be investor’s darling for the session as traders turned to safe haven bets amid string of record highs on the indexes. Additionally, FMCG counter too topped the list on BSE, led by gains of Colgate-Palmolive (India) stocks, which rallied  5% to Rs 1,877, also its record high on NSE, after reporting an 18% increase in net profit at Rs 130 crore for the second quarter ended September 30, 2014, on back of strong volume growth. The company had posted a net profit of Rs 110 crore for the same period of previous fiscal. Besides, Railway stocks, namely Texmaco Rail & Engineering, Titagarh Wagons, Kalindee Rail Nirman (Engineers), Kernex Microsystems (India) and Stone India, rallied in trade after Prime Minister Narendra Modi expanded his Union Cabinet and appointed Suresh Prabhu as the new Railways Minister, which in turn fuelled hopes of more reforms and investments into the sector. The market breadth on the BSE remained in the favour of decliners; where advancing and declining stocks were in a ratio of 1428:1508, while 121 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 27874.73, up by 6.10 points or 0.02% after trading in a range of 27764.75 and 28027.96. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in the green; the BSE Mid cap index was up by 0.14%, while Small cap index up by 0.16%. (Provisional)

The gaining sectoral indices on the BSE were FMCG up by 2.81%, Consumer Durables up by 1.00%, Power up by 0.84%, Healthcare up by 0.43% and Infrastructure up by 0.17%, while Oil & Gas down by 1.29%, Capital Goods down by 1.01%, Bankex down by 0.53%, PSU down by 0.48%, Auto down by 0.34% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 4.34%, Tata Power up by 2.14%, Sun Pharma up by 1.95%, Dr. Reddys Lab up by 1.47% and NTPC up by 1.42%. On the flip side, ONGC down by 3.53%, Hindalco down by 2.56%, Tata Motors down by 1.99%, Larsen & Toubro down by 1.98% and Axis Bank down by 1.89% were the top losers. (Provisional)

Meanwhile, as Prime Minister expanded Cabinet to speed up economic reforms, the Confederation of Indian Industry (CII) has stated that the ministry-expansion will help improve the focus on economic recovery. The CII president Ajay Shriram has asserted that at a time when the economy is recovering, it is important to fast-track policies to strengthen the growth and the latest government move of induction of new ministers will streamline governance and bring in new ideas for the economic reforms process.

The CII President further stated that business sentiment in the country is picking up since the new government took over. Further, ministerial expansion will support faster decision-making, efficient administration and faster clearances to ensure new investments.

Indian Prime Minister Narendra Modi on November 9 added 21 new ministers to speed up economic reforms. The strength of the Union Council of Ministers goes up from 45 to 66 of which, 27 including the Prime Minister are of Cabinet rank, 13 Ministers of State with Independent Charge and 26 Ministers of State.

Indian economic had been struggling with slowdown over the past two fiscal and its growth stayed below 5% for the second fiscal 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 and expanded at its fastest pace in more than two years by 5.7% during Q1FY15 as compared to 4.7% growth recorded in same quarter last year.

India VIX, a gauge for markets short term expectation of volatility declined 1.27% at 13.93 from its previous close of 14.11 on Friday. (Provisional)

The CNX Nifty ended at 8344.25, up by 7.25 points or 0.09% after trading in a range of 8304.45 and 8383.05. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 4.51%, Bank of Baroda up by 2.35%, Power Grid up by 2.21%, Tata Power up by 2.19% and Sun Pharma up by 1.90%. On the flip side, ONGC down by 3.77%, Jindal Steel & Power down by 3.56%, Hindalco down by 2.63%, Larsen & Toubro down by 2.08% and Tata Motors down by 2.07% were the top losers. (Provisional)

European Markets were trading in the green; UK’s FTSE 100 was up 0.28%, France’s CAC was up by 0.45% and Germany’s DAX was up by 0.19%.

Asian markets ended mostly in green on Monday, as regulators stated that a stock-trading link between Hong Kong and Shanghai will start next week. China’s annual consumer inflation remained near a five-year low in October at 1.6%, further evidence that the world’s second-largest economy is cooling and reinforcing expectations that authorities will roll out more measures to support growth. Chinese PPI fell to an annual rate of -2.2%, from -1.8% in the preceding month while, Chinese CPI remained unchanged at an annual rate of 1.6% compared to the preceding month. Annual growth in China’s exports and imports slowed in October, reinforcing signs of fragility in the world’s second-largest economy that could prompt policymakers to roll out more stimulus measures. Chinese Trade Balance rose to 45.41B, from 31.00B in the preceding month. China’s President Xi Jinping appeared to signal his country’s economic growth rate may continue to slow in the coming year. He however added that even a growth rate of about 7 percent will put China among the top performers in the world in terms of both speed and size.