Post Session: Quick Review

After a session of consolidation followed a session of profit-booking at Dalal Street which took markets lower with a cut of around half a percent on Wednesday. Dashed hopes of rates cut and prevailing caution ahead of the release of FOMC minutes this week mainly kept investors at the tenterhooks. Hopes of rate cut were quashed after Raghuram Rajan, the governor of India’s Apex Bank, which is under corporate and government pressure to bring down interest rates to boost economic growth, recently underscored that country should focus on achieving sustainable economic growth. These comments came a day after Finance Minister Arun Jaitley, pitching for a rate cut, underscored that lower cost of capital would provide a good fillip to the economy.

Nevertheless, sharp losses of local equities remained limited on account of release from Global ratings agency Fitch Ratings, which said that India's economic growth is expected to pick up to 5.6% in the current fiscal on account of structural reforms being rolled-out by the government. Additionally, sentiments to some extent also were buttressed after Organization for Economic Cooperation and Development (OECD) upped India’s growth outlook. In a country survey, the Paris-based think tank forecasted that Asia's third-largest economy would grow by 6.6% in 2015/16, up from its last forecast of 5.7% growth in May and could edge higher to 6.8% in 2016/17.

Overlooking all the reports, markets slipped into negative territory and ended downbeat. Much of the profit-booking was witnessed by the markets in the second half of the session, while the first half remained largely lackluster. Thus, by close of trade, both Sensex and Nifty shaving off half a percent, concluded below psychologically crucial 28,200 and 8,400 levels respectively. Meanwhile, broader indices too imitating the trend went home with loss of around 0.50%-0.65%.

On the global front, shares in Europe and Asia edged lower on Wednesday as investors focused on the divergent outlooks for the world's major economies. Asian counterparts pared gains to end mixed after Tokyo stocks fell as investors took profits on gains made on Tuesday when Prime Minister Shinzo Abe delayed a sales tax and called a snap election.

Closer home, most of the sectoral indices succumbed to selling pressure, however stocks from Healthcare, IT and TECk counters managed to hold their fort into green. IT stocks advanced on weak rupee, while pharmaceuticals witnessed recovery after two straight days of drubbing. On the flip side, much of the drubbing was witnessed by stocks from Metal, Power and PSU counters, which were the top losers of the session. The market breadth on the BSE remained in the favour of advances, where advancing and declining stocks were in a ratio of 1228:1832, while 87 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 28032.85, down by 130.44 points or 0.46% after trading in a range of 27963.51 and 28294.01. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in the in red; the BSE Mid cap index was down by 0.63%, while Small cap index down by 0.65% (Provisional)

The gaining sectoral indices on the BSE were IT up by 0.21%, TECK up by 0.12% and Healthcare up by 0.09%, while Metal down by 2.14%, Power down by 1.80%, PSU down by 1.51%, INFRA down by 1.44% and Oil & Gas down by 1.35% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddys Lab up by 2.45%, HDFC up by 1.14%, Hindustan Unilever up by 1.03%, Bajaj Auto up by 0.94% and Bharti Airtel up by 0.67%. On the flip side, Tata Steel down by 3.34%, Sesa Sterlite down by 2.91%, GAIL India down by 2.63%, Tata Motors down by 2.27% and BHEL down by 2.16% were the top losers. (Provisional)

Meanwhile, the Coal Ministry is likely to issue draft rules for e-auction for 74 coal blocks, the rules will be put up for public consultation as well as stakeholder consultation too, it is being done to be fair to all the parties involved. The draft rules are expected to provide clarity on compensation and will pave way for a cap on tariffs levied.

Earlier, the government as per its plan to allocate coal blocks through auction by February next has asked the allottees of 74 mines to provide information about their fields by November 25. These 74 mines are part of those 204 coal blocks whose allocation to various companies since 1993 was quashed by the Supreme Court on the ground that they were done in an illegal manner.

The coal block allottees have been asked to provide details on environment clearance, production and land status. They have to submit copies of geological report and environment clearance and forest clearance, production details, status of land (mine and infrastructure) acquisition and details of capital investment. For determination of the valuation, the government would use data like year-wise and cumulative production till March 2014 and for FY15; cost of land acquired for mine and infrastructure; cost incurred on rehabilitation and re-settlement; details of operating costs including outsourcing costs etc.

The government had recently set up a high-level inter-ministerial committee to ensure the smooth allocation of 204 cancelled coal blocks and is planning to build a consensus on the modalities for coal block auctions. It will also consult stakeholders including industry associations like FICCI, CII, Assocham and coal and power producers’ associations on ways to undertake coal block auctions.

India VIX, a gauge for markets short term expectation of volatility rose 1.99% at 14.34 from its previous close of 14.06 on Tuesday. (Provisional)

The CNX Nifty ended The CNX Nifty is currently trading at 8382.30, down by 43.60 points or 0.52% after trading in a range of 8360.50 and 8455.65. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 2.49%, HCL Tech up by 2.02%, Tech Mahindra up by 1.59%, DLF up by 1.41% and Zee Entertainment up by 1.36%. On the flip side, Tata Steel down by 3.17%, Jindal Steel & Power down by 3.09%, GAIL India down by 2.66%, Cairn India down by 2.66% and Sesa Sterlite down by 2.65% were the top losers. (Provisional)

European Markets were trading mostly in the green; France’s CAC was up by 0.18%, Germany’s DAX was up by 0.36%, while UK’s FTSE 100 was down by 0.18%.

Asian markets ended mixed on Wednesday, with Chinese market extending losses amid fading interest in the equity-trading link with Hong Kong. The Bank of Japan board voted 8 to 1 to leave the policy target unchanged with board member Takahide Kiuchi arguing that the pace of monetary easing before the October 31 expansion was more appropriate. The board maintained its cautious growth and inflation outlook presented some three weeks ago. It added that inflation as measured by the core CPI, excluding the direct impact of sales tax increase, is likely to stay around the current level of 1% for the time being. The BoJ didn’t have any idea about when consumer prices will begin to pick up. The BoJ will continue to increase its purchases of Japanese government bonds at an annual pace of about Y80 trillion. Japan’s index of leading economic indicators rose to a seasonally adjusted 105.6, compared to the preceding month. Japan’s All Industries Activity Index rose to a seasonally adjusted 1.0%, from -0.1% in the preceding month.

Indonesia’s total foreign outstanding debt rose 11% to $292.3 billion at the end of September from $262.9 billion in the same period last year, on back of rising private sectors debts that bears lower interest rates abroad compared to domestic loans. The private sector bore $159.3 billion of offshore debts, up 14% from $139.7 billion in 2013. Bank Indonesia raised its key interest rate by 25 basis points to 7.75% and lending facility rate by 50 basis points to 8%, to anchor inflation expectations after the government increased the price of subsidized fuel by more than 30%.