Post Session: Quick Review

Local equity markets, after trading lackluster for the entire trading session concluded on somber note on Monday. Though, recovery emerged several times, but each attempt was reciprocated by a bout of selling pressure which dragged the markets lower yet again. However, losses were substantially cut back after  the annual rate of inflation, based on monthly WPI, easing for sixth straight month, ebbed to five and half year low figure of 0.0% (provisionally) for the month of November, 2014 as compared to 1.77% for the previous month and 7.52% during the corresponding month of the previous year. Hopes that quickly cooling inflation and shockingly low IIP data would prompt RBI to slash rates as early as next monetary policy meeting in February mainly soothed investors’ nerves. However, dismal global cues amidst lower Brent crude prices, which slipped below $63 a barrel, its lowest since July 2009, dragged down by persistent concerns over a global supply glut and a sluggish demand outlook, mainly spooked the sentiment. By close of trade, both Sensex and Nifty despite losing over one tenth of a percent, settled above psychologically crucial 27,300 and 8,200 levels respectively. Meanwhile, losses were bigger for broader indices that went home with cut of around 0.50%.

On the global front, Asia pacific shares prices witnessed heavy drubbing on Monday as oil prices sank to fresh 5-1/2 year lows in choppy trade, doing little to allay concerns that some energy producers and exporters could find themselves in dire straits as revenues slump. Sentiment also took a hit after U.S. shares posted their biggest weekly fall in 2-1/2-years last week on losses led by energy sector, while they expect the U.S. Federal Reserve to hint this week it is getting closer to raising interest rates. Meanwhile, European shares witnessed a modest recovery on Monday as oil and copper prices rose, pushing up energy and basic resources goods stocks.

Closer home, most of the sectoral indices on BSE capitulated to selling pressure by close of trade, however stocks from banking and PSU counters were the only ones to show mettle. On the flip side, massive drubbing was witnessed by stocks from Realty, Consumer Durables and Information Technology counters. Banking stocks rallied on incremental rate cut hopes after November CPI and November WPI data eased to record low and five and half year low levels respectively. IT counter losses were led by TCS shares, which plunged over 3% after the company said that it expected a negative 220 basis point impact on dollar revenue during the third quarter because of cross currency headwinds. Besides, Oil and gas shares also witnessed heavy selling pressure on fears of global crude prices falling further on weaker demand and increased supply. The market breadth on the BSE remained in the favour of decliners, where advancing and declining stocks were in a ratio of 1179:1722, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 27319.56, down by 31.12 points or 0.11% after trading in a range of 27105.04 and 27392.18. 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 0.46%, while Small cap index down by 0.64%. (Provisional)

The only gaining sectoral indices on the BSE were Bankex up by 0.35% and PSU up by 0.18% while, Realty down by 2.07%, Consumer Durables down by 2.02%, IT down by 1.94%, TECK down by 1.46% and FMCG down by 0.97% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 5.12%, Coal India up by 3.68%, ONGC up by 1.50%, Hero MotoCorp up by 0.84% and HDFC Bank up by 0.78%. On the flip side, TCS down by 3.53%, Sesa Sterlite down by 1.83%, Hindustan Unilever down by 1.10%, Tata Steel down by 1.09% and Axis Bank down by 1.07% were the top losers. (Provisional)

Meanwhile, bolstering the case for rate cuts by RBI in upcoming monetary policy in February, the annual rate of inflation, based on monthly WPI, easing for sixth straight month, ebbed to five and half year low figure 0.00% (provisionally) for the month of November, 2014 as compared to 1.77% for the previous month and 7.52% during the corresponding month of the previous year.

The figure was way below the expected numbers, for the month of September, 2014, the final Wholesale Price Index for ‘All Commodities’ and annual rate of inflation remained unchanged at its provisional level of 185.0 and 2.38% respectively. With this the official Wholesale Price Index for ‘All Commodities’ (Base: 2004-05 = 100) for the month of November, 2014 declined by 1.3% to 181.5 (provisional) from 183.9 (provisional) for the previous month.

The sharp decline in WPI was mainly on account of sharp decline in inflation for ‘Fuel & Power’ group, followed by Inflation in Primary Articles. The index for ‘Fuel & Power’, which occupies 14.91% weightage in the overall index, declined by 5.4% to 199.3 (provisional) from 210.7 (provisional) for the previous month due to lower price of furnace oil (13%), high speed diesel oil (10%), aviation turbine fuel (8%), petrol (5%) and kerosene (3%).  Meanwhile, the index for Primary Articles, which occupies 20.12% weightage in overall index slid by 1.0% to 252.4 (provisional) from 255.0 (provisional) for the previous month.

Besides, Manufactured Products index, which occupies majority of 64.97% weightage in the overall WPI index, too lost 0.3% to 155.4 (provisional) from 155.8 (provisional) for the previous month mainly on the back of index for ‘Food Products’ group, which declined by 0.9% to 172.6 (provisional) from 174.2 (provisional) for the previous month.

The latest data further bolsters the case for rate cut by RBI in its upcoming bi-monthly monetary policy statement, which is scheduled on Tuesday, February 3, 2015 after record low CPI data and shockingly low IIP data. However, RBI in its previous monetary policy on December 2 also highlighted that the inflation reading for November, which will become available by mid-December is expected to soften further mainly on account of favourable base effect, which is likely to dissipate thereafter and in turn lift inflation from the current levels.

India VIX, a gauge for markets short term expectation of volatility rose 1.99% at 14.02 from its previous close of 13.74 on Friday. (Provisional)

The CNX Nifty ended The CNX Nifty ended at 8219.60, down by 4.50 points or 0.05% after trading in a range of 8152.50 and 8242.40. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC up by 5.12%, Kotak Mahindra Bank up by 4.93%, Coal India up by 3.49%, ONGC up by 1.77% and Zee Entertainment up by 1.74%. On the flip side, DLF down by 4.80%, BPCL down by 4.68%, TCS down by 3.76%, Tech Mahindra down by 3.59% and Sesa Sterlite down by 2.78% were the top losers. (Provisional)

European Markets were trading mostly in the green; France’s CAC was up by 0.54% and Germany’s DAX was up by 0.55%, however UK’s FTSE 100 was down by 1.82%.

The Asian equity benchmarks ended mostly in red on Monday, amid concern that tumbling oil price signals weakness in the outlook for global economic growth. Confidence among Japanese manufacturers worsened slightly in the fourth quarter and firms expect conditions to deteriorate more, highlighting the challenges premier Shinzo Abe faces in reviving the economy a day after his big win in Sunday’s snap election. Abe’s election win gives him a fresh mandate to pursue policies aimed at ending 15 years of deflation and sparking durable growth. Japan’s Tankan manufacturing index fell unexpectedly in the last quarter, to a seasonally adjusted 12, from 13 in the preceding quarter. Japan’s Tankan large non-manufacturing index rose to a seasonally adjusted 16, from 13 in the preceding month. The tankan showed big companies plan to increase capital expenditure by 8.9 percent in the fiscal year ending in March 2015, compared with a median forecast of a 8.0 percent rise.

Indonesia’s rupiah tumbled to its lowest level since the Asian financial crisis as an uptick in dollar buying by local companies before year-end coincided with a rout in the sovereign bond market. Overseas investors have pulled 10.09 trillion rupiah ($795 million) from local-currency sovereign bonds this month through December 1. Singaporean Retail Sales rose to a seasonally adjusted 8.1%, from 5.5% in the preceding month while Singaporean Unemployment Rate rose to 2.0%, from 1.9% in the preceding quarter. Singapore home sales fell to the lowest this year in November as the government’s lending curbs stemmed purchases. Developers sold 412 units last month compared with a revised 785 units in October. That’s the lowest since December, when 259 units were sold.