Post Session: Quick Review

Indian markets extended their somberness on Tuesday; declining for the second straight day in a row, though the mood was cautious since morning on sluggish global cues and ahead of the RBI’s policy announcements slated later in the day. Traders were expecting at least some dovish stance by the central bank if not a surprise rate cut. Markets that after a soft start were trading in a tight range, suffered sudden slump in a knee jerk reaction to RBI’s stand of keeping the policy rates unchanged, while stating that change in monetary policy stance at the current juncture is premature. All the rate sensitives including banks, auto and consumer durables were disappointed, however there was a quick recovery on RBI’s hint of lowering policy rate early next year if current trend in fiscal developments and disinflationary pressure continue. But again profit booking dragged the markets lower.

In the global markets, the Asian indices mostly made a positive close and the Japanese market moved higher as the yen declined after the initial spike. The stocks in the region also gained some support with the oil resuming its decline after jumping from a five-year low. International Monetary Fund Managing Director Christine Lagarde has said that the drop in oil prices will provide a net boost to the global economy while posing risks for energy-producing nations including Russia.The European markets made a positive start and major indices rose to two months high on hopes of stimulus measures and as energy shares rebounded.

Back home, markets found it difficult to recover in the backdrop of the RBI’s monetary policy announcements, there were some valiant efforts in the second half but were sold off with traders remaining worried about global growth and disappointed of a long delay in rate cuts. The only solace was the bounce back in the broader markets which outperforming the benchmarks posted gains of over half a percent. On the sectoral front, the auto sector stocks that have moved higher in last session on reporting good sales numbers for the month of November, witnessed some profit booking, as the RBI kept rates unchanged and also on reports that the government plans to make crash tests mandatory for cars once the test facilities are made available in the country. Minister of State for Road Transport and Highways has revealed the government plans to mandate the offset frontal and side impact crash tests for passenger cars. Automobile industry has been avoiding some safety features arguing cost factor. However, the maximum hit was the IT sector stocks after the software services exporters declined on rupee's strength. The PSU oil marketing companies too turned lower, as the international crude prices rebounded, while on domestic front the government once again hiked the excise duty on petrol by Rs 2.25 a litre, and on diesel by Rs 1 a litre. The government expects to mop up Rs 4,000 crore through this additional hike. Though, the hike will not be passed on to consumers, without  impacting retail prices of petrol and diesel, the OMCs will be bearing hikes on their own. There was buzz in the non sectoral gauge of shipping after announcement of government decision to launch PM Jal Marg Yojna and projects for setting up dry and satellite ports, besides converting riverways into waterways in order to revive the shipping industry. Essar Shipping was up by over 3%, SCI gained, ABG gained over 4% and GPPL was up by over 2%.

The BSE Sensex ended at 28444.01, down by 115.61 points or 0.40% after trading in a range of 28386.46 and 28576.39. There were 13 stocks in green against 17 stocks in red on the index. (Provisional)

The broader indices made a green close; the BSE Mid cap index was up by 0.91%, while Small cap index up by 0.55%.(Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.20%, Capital Goods up by 0.73%, FMCG up by 0.65%, Power up by 0.15%, Bankex up by 0.12% while, IT down by 1.48%, Auto down by 1.05%, TECK down by 0.93%, Oil & Gas down by 0.66%, Consumer Durables down by 0.08% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Hindalco up by 2.51%, Bharti Airtel up by 1.76%, Larsen & Toubro up by 1.12%, Sesa Sterlite up by 1.10% and ICICI Bank up by 0.74%. On the flip side, GAIL India down by 2.85%, Mahindra & Mahindra down by 2.36%, Infosys down by 2.18%, HDFC down by 1.51% and TCS down by 1.38% were the top losers.(Provisional)

Meanwhile, Core sector output in the month of October rose to four-month high of 6.3 percent in October as compared to 1.9% in September primarily led by better output in coal, refinery products and electricity. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weight of 37.9% in the overall Index of Industrial Production (IIP). Its cumulative growth during April to October, 2014-15 was recorded at 4.3% as against 4.2% growth in the same period of 2013-14.

Among core sectors, Electricity generation having 10.32% weight in IIP index registered a growth of 13.2% in October, 2014 over the same month of corresponding period. During April to October 2014-15, it recorded a growth of 10.5% over the corresponding period of previous year. Coal production with weightage of 4.38% in index increased by 16.2% in October, 2014 over the same period of corresponding period. On cumulative basis, coal production growth during April-October, 2014-15 increased by 8.5% compared to April-October, 2013-14. Crude oil and Petroleum Refinery Products, with weightage of 5.22% and 5.94% in index increased by 1.0% and 4.2% in October, 2014 over October, 2013. However, in cumulative terms, Crude oil and Petroleum Refinery Products declined by 0.9% and 1.7% during April-October 2014-15. Steel production with weight of 6.68% in IIP index, increased by 2.3% in October, 2014 over October, 2013. While, its cumulative index during April to October, 2014-15 increased by 2.3% over the corresponding period of previous year.

On the flip side, Cement sector having weightage of 2.41% respectively in IIP index, registered a contraction of 1.0% respectively, in the month under review over October 2013. However, in cumulative terms, Cement production recorded a growth of 8.1% during April-October 2014-15. Natural Gas production having weightage 1.71% in IIP index declined by 4.2% in October 2014 as compared to the month in October, 2013. The cumulative index for Natural Gas production during April-October 2014-15 declined by 5.6% over corresponding period of previous year. Fertilizer production with weightage of 1.25% in IIP index declined 7.6% in October, 2014 over October, 2013. The cumulative index of Fertilizer production during April-October 2014-15 declined by 1.1 % over the corresponding period of previous year.

The significant growth in core industries output is a positive news ahead of the RBI's monetary policy. The latest data comes on the heels of second quarter GDP data showing economic expansion of 5.3%, compared with a nine-quarter high of 5.7% in the previous quarter, and the continued weakness of the manufacturing industry.(Provisional)

The CNX Nifty ended at 8524.70, down by 31.20 points or 0.36% after trading in a range of 8504.65 and 8560.20. There were 25 stocks advanced against 25 declines on the index.(Provisional)

The top gainers on Nifty were Jindal Steel & Power up by 4.68% and Hindalco up by 2.18% and NMDC up by 2.16% and IDFC up by 1.84% and Bharti Airtel up by 1.73%. On the flip side, BPCL down by 4.27%, Asian Paints down by 3.39%, GAIL India down by 3.06%, Mahindra & Mahindra down by 2.36% and Infosys down by 2.22% were the top losers.(Provisional)

The European markets made a positive start, Germany’s DAX gained 11.03 points or 0.11% to 9,974.54, France’s CAC was up by 24.18 points or 0.55% to 4,401.51, while the UK’s FTSE 100 increased by 80.43 points or 1.21% to 6,736.80.

Asian markets ended mostly in green on Tuesday, as a rebound in oil and other commodity prices and hopes that Chinese policymakers will take further measures to bolster growth spurred bargain hunting in commodity-related stocks. The markets opened on a tepid note but erased early losses to edge higher, led by sharp gains in Chinese and Hong Kong shares. Chinese shares soared to a three-year high, led by banks and brokerages amid speculation of an imminent cut in bank reserve requirement ratios. Japanese shares turned positive after a tepid start amid speculation that the Bank of Japan was buying stocks as part of its asset purchase scheme.