Post Session: Quick Review

Indian equity markets, after witnessing massacre in previous trading session, ended downbeat for yet another session of Wednesday. Weakness prevailed as participants continued to book profits in the face of a weak outlook for global growth and inflation concerns, while growing fears Greece turmoil also weighed on investors’ appetite. Additionally, prevailing caution ahead of start of earning season also added to the pessimistic milieu. However, losses remained limited as select participants’ engaged into buying beaten down, but fundamentally strong blue chip stocks. By close of trade, both Sensex and Nifty concluded below psychologically crucial 27,000 and 8,150 levels respectively, with losses of around two tenths of a percent. However, broader indices managing to weather out the odds, ended in green, albeit with miniscule gains.

On the global front, Most Asian stock markets ended higher on Wednesday despite further falls in oil prices and growing concerns over the euro-zone's economy. The gains came even as a survey published on Tuesday indicating the euro-zone saw anaemic growth in December further fuelled investor concerns. Meanwhile, European shares rose on Wednesday ahead of the release of a key report that may show deflationary pressures ramping up in the euro zone. A flash estimate for December inflation rate is expected to show the euro-zone’s consumer price index fell to negative 0.1%, which would mark the first negative reading since October 2009.

Closer home, on the BSE while stocks from Banking, Information Technology and Realty counters were the notable losers of the session, those from Oil & Gas, Consumer Durables and Capital Goods counters were the prominent gainers of the session. Meanwhile, paint makers and PSU oil marketing companies edged higher as oil prices extend losses. Additionally, Telecom stocks edged higher after a day of drubbing when Union Cabinet approved the largest ever telecom spectrum auction that is targeted to fetch the exchequer at least Rs 64,840 crore, much higher than the target of Rs 43065 crore set in the Union Budget for 2014-15. Besides, Cement stocks too gained on renewed buying activities. The overall market breadth on BSE was in the favour of decliners, which thumped advances in the ratio of 1349:1500, while 103 shares remained unchanged (Provisional).

The BSE Sensex ended at 26908.82, down by 78.64 points or 0.29% after trading in a range of 26776.12 and 27051.60. There were 15 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.01%, while Small cap index up by 0.03%. (Provisional)

The gaining sectoral indices on the BSE were Oil & Gas up by 1.39%, Consumer Durables up by 0.27%, PSU up by 0.07%, Capital Goods up by 0.05% and Power up by 0.03% while, Metal down by 1.42%, Bankex down by 0.65%, IT down by 0.49%, TECK down by 0.36% and INFRA down by 0.33% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 3.40%, Reliance Industries up by 2.57%, NTPC up by 2.44%, ONGC up by 2.15% and Maruti Suzuki up by 1.90%. On the flip side, Hindalco down by 2.71%, GAIL India down by 2.35%, ICICI Bank down by 2.17%, BHEL down by 2.11% and ITC down by 1.91% were the top losers. (Provisional)

Meanwhile, amid rising concerns over the increasing gold imports over the past few months, Commerce Ministry will soon hold a meeting with gems and jewellery exporters to discuss issues regarding gold imports for the sector.  Commerce Ministry is likely to discuss ways to ensure smooth supply of gold for exporters without putting pressure on the Current Account Deficit (CAD) situation. The meeting will examine the impact of detached 80:20 rule under which 20 percent of the imported gold had to be mandatorily exported before bringing in new lot.

Gold imports shot up by 571% to $5.6 billion in November from $0.83 billion a year earlier. Merchandise imports also grew at a faster clip in November due to a sudden spike in the import of gold. India's imports during November rose by 26.79% y-o-y to $42.82 billion. Owing to high imports, trade deficit during November widened to around double on annual bias. India's trade deficit widened to 18-month high of $16.86 billion in month of November, as compared to $9.57 in the same month previous year and $13.36 billion in the previous month of October.

Rising trade deficit over the past two month has been exerting pressure on country's external sector as well as the domestic currency. The Indian rupee slumped to around 63.45 per dollar. India's CAD for the second quarter of the current financial year widened to $10.1 billion or 2.1% of GDP as against $5.2 billion or 1.2% of GDP in the same quarter of the previous year. 

India VIX, a gauge for markets short term expectation of volatility surged 4.13% at 18.14 from its previous close of 17.42 on Tuesday. (Provisional)

The CNX Nifty ended at 8102.10, down by 25.25 points or 0.31% after trading in a range of 8065.45 and 8151.20. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 3.51%, NTPC up by 2.41%, Reliance Industries up by 2.18%, Asian Paints up by 2.01% and Kotak Mahindra Bank up by 1.61%. On the flip side, Hindalco down by 2.93%, NMDC down by 2.93%, BHEL down by 2.72%, ICICI Bank down by 2.70% and GAIL India down by 2.55% were the top losers. (Provisional)

European Markets were trading in the green; UK's FTSE 100 was up by 0.54%, France's CAC was up by 0.52% and Germany's DAX was up by 0.49%.

The Asian equity benchmarks ended mostly in green on Wednesday, with China’s Shanghai Composite Index climbing for a fourth day. China’s annual economic growth likely slowed to 7.2% in the fourth quarter, the weakest since the depths of the global crisis, a poll showed, which would keep pressure on policymakers to head off a sharper slowdown this year. The expected slowdown in growth of the world’s second-largest economy, from 7.3% in the June-September quarter, means full-year would undershoot the government’s 7.5% target and mark the weakest expansion in 24 years. Malaysian Trade Balance rose to 11.13B, from 1.20B in the preceding month.

Japanese Prime Minister Shinzo Abe informed that he may be able to declare that the country has broken free from a long phase of deflation if companies continue to raise wages. Abe hopes that by improving the economy Japan will be able to contribute to global growth. Japan’s budget for next fiscal year will forecast 24-year high tax revenues of $460 billion as corporate profits surge under the economic growth policies of Prime Minister Shinzo Abe. The budget for the year from April expected to top 96 trillion yen ($800 billion) and to be approved by Abe’s cabinet on January 14, will forecast tax revenues of 54.5 trillion yen, the highest since 1991.