Post Session: Quick Review

Local equity markets succumbed to selling pressure on Thursday after scaling record high levels in previous trading session, which encouraged market-participants to incrementally book out profits, dragging both Sensex and Nifty below psychologically crucial 28,000 and 8,400 levels respectively, with losses of around three tenths of a percent.

Notably, markets witnessed drubbing despite the release of good macro-economic data, which somewhat rekindled hopes of RBI lowering its interest rates in its upcoming monetary policy in December. On the macro-front, in a double delight, India’s consumer price inflation eased at another all time low level since the launch of the new series of Consumer Price Index in 2012, at 5.52% in October as compared to 6.46% in September, while India’s annual industrial output growth, measured by index of industrial production (IIP), expanded more than expected at 2.5% in September after posting growth of 0.5% in August. Meanwhile, broader indices also surrendering to selling pressure went home with losses of around 0.20%-0.33%.

On the global front, Asian markets concluded mixed on Thursday after a record-breaking rally on Wall Street finally came to an end, while China released another batch of disappointing data indicating a slowdown in the economic giant. China's National Bureau of Statistics said growth in industrial output slipped to 7.7% year-on-year in October, from 8% the previous month and below forecasts of 8%. In the same month retail sales, a key indicator of consumer spending increased a less-than-expected 11.5%. Fixed asset investment, a measure of government spending on infrastructure, expanded 15.9% in the first 10 months, below the 16 tipped. On the flip side, European shares staged a modest rebound on Thursday, helped by strong results from companies such as French telecoms firm Iliad and plans to return money to shareholders at turbine maker Alstom.

Closer home, much of the sectoral indices concluded into negative territory, maximum beating was witnessed by stocks from Oil & Gas, Realty and Public Sector Undertaking counters. Shares of oil marketing companies witnessed heavy drubbing after the government announced hike in excise duty on petrol and diesel in an attempt to boost revenues and contain budget borrowing. The government hiked excise duty on branded diesel to Rs 5.25 per litre from Rs 3.75 per litre, while excise on branded petrol was increased to Rs 3.85 per litre from Rs 2.35 per litre.  Additionally, excise duty on unbranded diesel went up to Rs 2.96 per litre from Rs 1.46 per litre and that on unbranded petrol was increased to Rs 2.70 per litre from Rs 1.20 per litre.

On the flip side, much of the buying was witnessed in stocks from Information Technology, followed by Technology and Healthcare counters.  Additionally, shares of sugar companies surged in trade after the Uttar Pradesh government left sugarcane prices unchanged at Rs 280 per quintal for this crushing season.  The market breadth on the BSE remained in the favour of decliners, where advancing and declining stocks were in a ratio of 1333:1714, while 106 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 27940.64, down by 68.26 points or 0.24% after trading in a range of 27822.70 and 28098.74. There were 15 stocks advancing against similar number of stocks declining on the index. (Provisional)

The broader indices ended in the red; the BSE Mid cap index was down by 0.31%, while Small cap index was down by 0.22%. (Provisional)

The gaining sectoral indices on the BSE were IT up by 0.99%, TECK up by 0.74% and Healthcare up by 0.56%, Consumer Durables up by 0.36%, while Oil & Gas down by 1.63%, Realty down by 1.44%, PSU down by 1.32%, Infrastructure down by 0.78% and Metal down by 0.76% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.13%, Dr. Reddys Lab up by 1.02%, Bharti Airtel up by 0.74%, Wipro up by 0.68% and Bajaj Auto up by 0.54%. On the flip side, Tata Power down by 2.36%, Sesa Sterlite down by 2.15%, GAIL India down by 1.74%, ONGC down by 1.74% and Hero MotoCorp down by 1.53% were the top losers. (Provisional)

Meanwhile, with an aim to enhance coal production in the country, the government is planning to complete coal block allocation through auction by February next year. Around 74 coal mines are likely to be put up for sale in the first round of auction.

In order to ensure smooth allocation of 204 cancelled coal blocks, the government has set up a high- level inter-ministerial panel that would provide advice on policy issues and interact with the industry. The nine-member committee, to be headed by Additional Secretary (Coal), will have members from ministries like power, steel and law. Supreme Court had last month quashed allocation of 204 blocks allotted to various companies since 1993, underscoring that common good and public interest have suffered heavily due to these allocations as there was no fair and transparent procedure.

The government aimed to double the domestic coal production to 1 billion tonnes in the next five years. Terming coal evacuation as a major reason for coal deficit, Coal Secretary Anil Swarup has asserted that the government will soon come out with a clear-cut strategy paper aimed at doubling coal production in the next five years. The government had also proposed critical railways lines projects in Chhattisgharh, Jharkhand and Odisha.  When these projects are fully operational will add coal evacuation to the tune of around 200 million tonnes.

Indian domestic coal demand is around 35 percent higher than domestic supply. Coal India (CIL) is the only producer of coal in the country and is struggling to meet domestic coal requirements. CIL production fell 4.21 percent short of its production target to 462.53 million tonnes in FY14 amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha.

India VIX, a gauge for markets short term expectation of volatility declined 4.39% at 13.80 from its previous close of 14.43 on Wednesday. (Provisional)

The CNX Nifty ended at 8357.85, down by 25.45 points or 0.30% after trading in a range of 8320.35 and 8408.00. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 2.44%, Infosys up by 1.77%, Power Grid up by 1.19%, Lupin up by 1.08% and Tech Mahindra up by 0.94%. On the flip side, BPCL down by 4.55%, Cairn India down by 3.60%, NMDC down by 3.08%, Sesa Sterlite down by 2.59% and Tata Power down by 2.53% were the top losers. (Provisional)

European Markets were trading in the green; UK’s FTSE 100 was up 0.33%, France’s CAC was up by 0.91% and Germany’s DAX was up by 1.00%.

Asian markets ended mixed on Thursday, amid signs that policy makers in China and Japan will do more to support economic growth. Chinese stocks rose in Hong Kong, propelling the benchmark index to its highest level in almost two months, after a report that central bank will inject cash into smaller banks. The People’s Bank of China is gauging city commercial banks’ demand for funds to support lending to small enterprises. Growth in China real estate investment slowed further in the first 10 months of 2014, but property sales showed some signs of improvement, indicating Beijing’s efforts to boost the ailing sector may be starting to have an effect. Property investment grew at its slowest pace in over five years between January to October, rising 12.4% from the same period a year earlier. That compared with a rise of 12.5% in the first nine months and was the slowest pace since July 2009.

Chinese Retail Sales fell to an annual rate of 11.5%, from 11.6% in the preceding month while Chinese Fixed Asset Investment fell to a seasonally adjusted 15.9%, from 16.1% in the preceding month. Chinese Industrial Production fell to 7.7%, from 8.0% in the preceding month. Japan’s industrial production rose to a seasonally adjusted 2.9%, from 2.7% in the preceding month.