Post session - Quick review

Local bourses collapsed like house of cards at the start of the fresh week as investors pocketed their gains from a recent share rally, while adopting a cautious stance to await the outcome of talks on a Greek debt swap deal that is key to avoiding a messy default at yet another European summit. Commodities from copper to oil lost steam from last week, when the Federal Reserve's pledge to keep interest rates low boosted riskier assets.  Bears took centre stage after the last week bull’s run where the benchmark indices amassed gigantic gains of over 3%. However, the inexorable profit booking witnessed in today’s trading session equated benchmark indices beneath their intermediate support level of 17000 mark (Sensex) and 5100 mark (Nifty) respectively.

Regional sentiment was also subdued after the Dow lost ground on Friday following a report showing US fourth quarter growth fell short of expectations. Meanwhile, sentiment also took a hit with the drubbing of Asian shares. Asian shares fell on Monday as investors took some profits after the nation's finance minister, Evangelos Venizelos, rejected a German proposal for the EU to take control over Greece's tax and spending decisions. Additionally, European shares too knocked off gains amid concern of today’s meeting of the region’s leaders failing to draw a line under the sovereign-debt crisis. US index futures also declined.

Back home, sugar stocks hogged substantial limelight as the Prime Minister constituted an Expert Committee under the Chairmanship of Dr. C. Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector.  Colossal losses at Dalal Street were apparent across the board, however, maximum  pressure was exerted from the stocks belonging from the Health Care (HC), Fast Moving Consumer Goods (FMCG) and Information Technology (IT) counters. Meanwhile, Capital goods majors L&T and BHEL too tumbled between 2-8%.  BHEL has slumped nearly 11% after reporting a 7% year-on-year (y-o-y) drop in order inflows at Rs 146,500 crore at the end of December 2011 quarter. The state-owned heavy electrical equipment makers had an order book position of Rs 158,000 crore as on December 2010.

On the result front, Indian chemicals maker United Phosphorus' quarterly net profit rose, below estimates, hurt by losses in associate companies despite robust overseas sales. The stock post reporting the number plummeted over 3%. The company, which makes crop protection products and industrial chemicals, said consolidated net profit rose to Rs 112 crore ($22.7 million) in October-December from Rs 83.57 crore a year earlier. Meanwhile, Allahabad Bank lost over 0.50% post reporting its Q3FY12 numbers. Public sector lender Allahabad Bank reported a 35 per cent growth in net profit to Rs 560.43 crore for the October-December quarter of the current fiscal. The bank had posted a net profit of Rs 415.80 crore for the corresponding period a year ago. Additionally, Indian Bank also reported loss of 2% on reporting its Q3 numbers. Public sector bank posted a net profit of Rs. 526 crore on Monday for the quarter ended December 31, 2011 as compared to Rs 491.29 crore for the quarter ended December 31, 2010. Public sector  lender’s assets quality remained the matter of concern, GNPA and NNPA of the bank stood at 1.35% and 0.80%, increased by 33bps and 23bps YoY respectively.

Thus, the benchmark 30 share index of Bombay Stock Exchange (BSE) after losing over 300 points ended near the low point of the day. In the similar fashion, widely followed 50 share index of National Stock Exchange (NSE)-Nifty-too taking century of point shut shopped sub 5100 mark. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 984:1825 while 100 scrip’s remained unchanged. (Provisional)

The BSE Sensex lost 367.24 points or 2.13% and settled at 16,866.74. The index touched a high and a low of 17,138.04 and 16,828.33 respectively. 4 stocks advanced against 26 declining ones on the index (Provisional)

The BSE Mid-cap index lost 1.96% while Small-cap index was down by 1.91%. (Provisional)

On the BSE Sectoral front, there were no gainers while Capital Goods down 5.82%, Power down 3.63%, Realty down 3.17%, Metal down 2.91% and Bankex down 2.79% were the top losers.

The top gainers on the Sensex were Sun Pharma up 1.71%, Bajaj Auto up 0.88%, Jindal Steel up 0.80% and Hero MotoCorp up 0.23%.

On the flip side, BHEL down 10.71%, Sterlite Industries down 6.20%, L&T down 5.73%, M&M down 4.98% and Hindalco Industries down 4.88% were the top losers in the index. (Provisional)

Meanwhile, in an effort to attract US investors, Finance Minister, Pranab Mukherjee while speaking to top business leaders, including those from Fortune 500 firms, at the Chicago Council of Global Affairs reiterated his government’s commitment to bring about Foreign Direct Investment (FDI) in multi brand retail. He said that India had further liberalised FDI in single brand retail, and was in the process of building up consensus among the various stakeholders for FDI in multi brand retail. 

India has taken number of steps to simplify the FDI regime to make it easily comprehensible to foreign investors. To make the FDI policy more user-friendly, all prior regulations and guidelines have been consolidated into a comprehensive document, which is reviewed every 6 months. FDI flows in India, which had considerably declined in 2010-11, had now bounced back in current fiscal year.

Emphasizing the need to sustain and strengthen the domestic growth, finance minister said that India was concentrating on accelerating the pace of the investment in infrastructure in its 12th Five Year Plan. India needed to invest an additional $1 trillion to sustain its current levels of growth and to equalize its benefits over the Plan period. For this, it was looking for additional investments from the private sector. The share of private and public-private partnership (PPP) investments in total investment during the 12th Plan (2012-17) was targeted to increase to 50% from the estimated 30% in the 11th Plan (2007-12).

The PPP route for investment in Indian infrastructure represented a commercially attractive opportunity for foreign investors. He further stated that the government had taken various measures to encourage and facilitate foreign investment in infrastructure.  By adding further he said, standardized and sophisticated contract documentation is in place and finally, India has now established unique and innovative financing instruments such as a scheme to support Viability Gap Funding (VGF) for PPP projects and special purpose vehicles (SPVs) for giving long tenor loans to PPP projects.

He also observed that India’s growth fundamentals were strong and they looked more attractive in a world challenged by problems of confidence and lack of growth. India’s robust performance in difficult times made it a safe haven that global capital was looking for. India presented an opportunity at this moment that could not be ignored.India VIX, a gauge for market’s short term expectation of volatility gained 8.11% at 23.46 from its previous close of 21.70 on Friday. (Provisional)

The S&P CNX Nifty lost 126.10 points or 2.42% to settle at 5,078.60. The index touched high and low of 5,166.15 and 5,076.70 respectively. 9 stocks advanced against 41 declining ones on the index. (Provisional)

The top gainers on the Nifty were Sun Pharma up 1.48%, Ranbaxy up 1.18%, Bajaj Auto up 0.80%, Jindal Steel up 0.70% and Grasim up 0.40%.

On the other hand, BHEL down 11.33%, Sterlite down 7.00%, Sesa Goa down 6.96%, JP Associates down 6.57% and L&T down 5.75% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.99%, Germany's DAX down 0.99% and Britain’s FTSE 100 down 0.82%.

Most of the Asian equity indices slipped on Monday after US growth data came in below expectations and profit-takers cashed in recent gains. Moreover, investors adopted a cautious stance to await the outcome of talks on a Greek debt swap deal that is key to avoiding a messy default and yet another European summit. Greece appeared to be close to clinching a bond swap agreement with private creditors and Prime Minister Lucas Papademos sought backing from leading Greek party leaders for painful reforms.

Shanghai shares reopened with a loss, after an expected cut in the amount of cash banks are required to hold in reserve failed to materialize over the week-long Lunar New Year holiday, dragging bank shares lower while, Hong Kong shares snapped a six-session winning streak on Monday as investors sold some of this year's outperformers. Moreover, Japan's Nikkei share average slipped in early trade on Monday, weighed down by disappointing corporate earnings results, while U.S. fourth-quarter economic growth was weaker than expected though it grew at its fastest pace in 1-1/2 years.