Post Session: Quick Review

Indian equity markets made a slightly choppy start of the final month of the year, bourses kept moving in and out of the red zone throughout the trading session before finally witnessing some profit booking. Earlier the start was on a positive note with local bourses bucking Asian market trends moved higher, reacting to the better than expected GDP data for the second quarter announced late Friday. The economy slowed in second quarter at 5.3 per cent from 5.7 per cent in the previous April-June quarter, dragged down by the poor performance of the manufacturing sector. Though, the numbers were much better than the street expectations and the GDP growth for the first half of the year, April-September stood at 5.5 per cent, as against 4.9 per cent in the same period last year.

The global cues were not very supportive, as most of the Asian markets after a cautious start turned negative, after the Chinese Manufacturing Purchasing Managers' Index (PMI) edged down to 50.0 in November, a six-month low. The European markets too made a soft start led by decline in commodity and energy producers, after manufacturing slowed more than forecast from China to the euro area. German manufacturing unexpectedly shrank last month to 49.5 from 51.4. Manufacturing in France and Italy also shrank and a euro-area gauge was revised to 50.1 from 50.4.

Back home, the weak start of the European markets dampened the sentiments on the Dalal Street, and the traders who had remained on sidelines a day ahead of RBI policy review went for some profit taking. Meanwhile, the wide expectations are that Governor Raghuram Rajan who has resisted calls to cut the repo rate, even though retail price inflation has dipped below the 6% target he wants to hit by January 2016, may not oblige the street with a surprise. Traders were hoping that finance minister Arun Jaitley would argue with RBI governor to lower interest rates when the two meet ahead of an RBI interest rate decision later today. In the early part of the trade the markets got some support from an upbeat reading of manufacturing sector in the month of November, as the HSBC India Purchasing Managers' Index (PMI) rose from 51.6 to 53.3 to reach a 21-month peak. Manufacturing operating conditions in the country improved for the 13th month in a row, supported by stronger growth of output and new work intakes. The auto stocks were in action after reporting their monthly sales numbers for the month of November, most of the companies reported good numbers, largest car maker Maruti Suzuki’s sales were up by 19.5%, TVS motors reported gains of 36%, Eicher Motors sales zoomed by 52% and Atul Auto’s sales were up by 19%, while Escorts reported a decline of 27% in its sales for the month.

The BSE Sensex ended at 28559.62, down by 134.37 points or 0.47% after trading in a range of 28538.44 and 28809.64. There were 11 stocks advanced against 19 declining ones on the index.(Provisional)

The broader indices gave their early gains and ended in red; the BSE Mid cap index was down by 0.08%, while Small cap index lost 0.72%.(Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.31%, IT up by 0.84%, FMCG up by 0.69%, TECK up by 0.46%, Auto up by 0.33% while, Oil & Gas down by 2.57%, Power down by 2.25%, Metal down by 2.14%, PSU down by 1.62%, Capital Goods down by 1.37% were the major losing indices on BSE.(Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 3.97%, Hindustan Unilever up by 2.77%, TCS up by 1.96%, Axis Bank up by 1.94% and Wipro up by 1.61%. On the flip side, ONGC down by 4.16%, BHEL down by 3.18%, Hindalco down by 3.11%, Reliance Industries down by 2.81% and Tata Power down by 2.74% were the top losers.(Provisional)

Meanwhile, in a surprise move the government has scrapped the 20:80 scheme and restrictions placed on import of gold in August last year. The 80:20 norm mandated that a fifth of all the precious metal imported should be re-exported before bringing in new lots. The RBI had also asked them to make available gold for domestic use, only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the gold deposit scheme against full upfront payment.

As per the Reserve Bank of India notification gold import norms imposed on August 14, 2013, to reduce the burgeoning current account deficit and relieve pressure on the rupee that had weakened sharply, has been withdrawn. Accordingly all instructions issued about the scheme from time to time...stand withdrawn with immediate effect.

The 80:20 norm helped slowing gold imports in early days, but the shipments surged after certain relaxations were given by the previous government in its last days. The norms were relaxed in May and six private sector trading firms were permitted to import the gold under the 80:20 scheme. Initially, only state-owned firms and banks were permitted to import. The six private firms, which were given relaxation, accounted for 40 per cent of the total gold imports in April-September.

The government was also concerned that the rule was encouraging importers to hoard gold, causing a distortion in trade. Gold imports surged to 280 percent to $4.17 billion in October, while the in-bound shipments touched 95 tonnes in September this year as against 12 tonnes a year ago.

The CNX Nifty ended at 8555.90, down by 32.35 points or 0.38% after trading in a range of 8545.15 and 8623.00. There were 18 stocks were on gaining side against 32 stocks on the losing side on the index.(Provisional)

The top gainers on Nifty were Asian Paints up by 7.03%, Hero MotoCorp up by 3.51%, DLF up by 3.42%, Indusind Bank up by 3.00% and Hindustan Unilever up by 2.87%. On the flip side, NMDC down by 3.97%, ONGC down by 3.94%, Hindalco down by 3.82%, Jindal Steel & Power down by 3.55% and BHEL down by 3.38% were the top losers.(Provisional)

The European markets were in red, UK’s FTSE 100 lost 53.94 points or 0.8% to 6,668.68, France’s CAC was down by 26.16 points or 0.6% to 4,364.02 and Germany’s DAX was trading lower by 25.05 points or 0.25% to 9,955.80.

Asian markets ended mostly in red on Monday as the oil prices extended last week's slump and a gauge of Chinese manufacturing declined, adding to concerns about global economic recovery. The Chinese Shanghai Composite edged down marginally on growth concerns after data suggested the economy is under significant downward pressure. However, the losses were restricted following the central bank published draft rules for a long-awaited bank deposit insurance scheme. The Chinese manufacturing gauge fell as factory shutdowns aggravated a pullback in the economy, raising pressure on the central bank to ease policy further after it lowered interest rates for the first time in two years. The Japanese stocks rallied hitting a fresh seven-year high, with a weaker yen and encouraging data on capital spending by Japanese companies.