Post session - Quick review

After showcasing some mesmerising moves in the noon deals, benchmark equity indices finally capitulated to the selling pressure, witnessed across the globe. Greek resistance to the strict conditions attached to a bailout fund capped the recent strength in local shares on Tuesday, as renewed fears of a messy debt default gave pause to mounting hopes of global economy’s recuperation. The market remained split over whether the wrangling over Greece's debt restructuring talks would eventually be resolved or trigger contagion across other vulnerable euro zone countries.

Benchmarks halting a five session long rally abandoned the long held psychological level of 17700 (Sensex) and 5400 mark (Nifty) respectively and sunk its way to 17600 and 5300 mark. What really sent jitters across investor’s spine was the government forecast of annual growth for the fiscal year that ends in March.The economy is estimated to grow 6.9 per cent this fiscal year, its slowest pace in three years, the government said, as tight monetary policy and a logjam in government policy making coupled with weak global conditions stifles investment.

Besides, the sinking Asian markets, Greek Austerity talks too pounded the sentiment of European region, which in turn, had trouncing affects over Indian equity markets. European shares fell back from six-month highs on Tuesday, weighed by weak updates from the likes of UBS and Alfa Laval.

Back on the home turf, although stocks from Oil & Gas, Consumer Durable (CD) and Bankex counters showed a great bit of resilience, on the flip side, stocks from Capital Goods, Realty and Power counters offset all the gains. Thus, by the end of trade, Sensex slid over 75 points to end sub 17600 level, while 50 share index- Nifty-lost over 25 points to conclude at 5300 level.The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1213:1661 while 117 scrips remained unchanged. (Provisional)

The BSE Sensex lost 72.10 points or 0.41% and settled at 17,635.21. The index touched a high and a low of 17,832.04 and 17,582.49 respectively. 9 stocks advanced against 21 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.71% while Small-cap index was down by 0.35%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 0.93%, Bankex up 0.58%, Consumer Durables up 0.56%, FMCG up 0.30% and Health Care up 0.07% were the only gainers while Capital Goods down 2.25%, Realty down 2.13%, Power down 1.86%, Metal down 1.64% and TECk down 1.06% were the top losers.

The top gainers on the Sensex were RIL up 1.48%, ITC up 1.41%, ONGC up 1.38% ICICI Bank up 1.07% and TCS up 0.72%.

On the flip side, BHEL down 4.11%, Tata Steel down 3.22%, DLF down 2.92%, Gail India down 2.88% and M&M down 2.80% were the top losers in the index. (Provisional)Meanwhile, the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation. The GDP growth numbers are a tad less than the widely expected figure of around 7%.

The ‘agriculture, forestry and fishing’ sector has grown by a meager 2.5 % registering a sharp decline from the 7% registered in the corresponding period last year. Production of foodgrains is expected to grow by 2.3% as compared to 12.2% growth in the previous agriculture year. The  production of cotton  and sugarcane  is also expected to rise by 3.3% and 1.6%, respectively, in 2011-12. The number has come as a slight surprise given that India has had two consecutive years of good rains and bumper production of rice, wheat and cotton. These figures could impact future inflation numbers leaving little room for monetary intervention by RBI.

The manufacturing sector is likely to grow at a slow rate of 3.9% during 2011-12 sharply down from its  growth of 7.6% during 2010-11. The major dampener has come from the mining sector which is likely to show a negative growth of  2.2% in 2011-12 as against growth of 5% during 2010-11. The construction sector is likely grow at a rate of 4.8% during 2011-12 as against growth of 8% in the previous year. Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1% this fiscal, against 10.4% last fiscal. These numbers have been pretty much in line with expectations. A sharp decline in the manufacturing can be attributed to the ban on mining in some states and slowdown in the global economy.

The services sector comprising of trade, hotels, transport and communication is expected to grow at  11.2% during  2011-12 as against growth of 11.1% in the previous year. The per capita income in real terms (at 2004-05 prices) during 2011-12 is likely to attain a level of Rs. 38,005 as compared to the Quick Estimate for the year 2010-11 of Rs. 35,993. The growth rate in per capita income is estimated at 5.6% during 2011-12, as against the previous year's estimate of 6.4%. Population during this period has grown from 1.8 billion to 2 billion.

Private final consumption expenditure (PFCE), regarded as the driver for growth, grew by 6.4% as compared to 8.1% in 2010-11. It is estimated at Rs. 32,70,368  crore  in 2011-12 as against Rs. 30,72,115 crore in 2010-11.

Gross fixed capital formation (GFCF), an indicator of investment, grew at an estimated 5.6% in 2011-12 as compared to 7.5% in 2011-2010. A slowdown in GFCF could be attributed to the tightening of the monetary policy by RBI, policy paralysis on the government’s front and the euro zone crisis. Government final consumption expenditure (GFCE), is likely to grow by 2.8% in 2011-2012 as compared to 7.9% in 2010-2011.

India VIX, a gauge for market’s short term expectation of volatility gained 1.01% at 24.91 from its previous close of 24.62 on Monday. (Provisional)

The S&P CNX Nifty lost 28.05 points or 0.52% to settle at 5,333.60.The index touched high and low of 5,413.35 and 5,322.95 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were Kotak Bank up 2.63%, Cairn India up 2.45%, ITC up 1.51%, RIL up 1.47% and Ranbaxy up 1.40%.

On the other hand, BHEL down 4.64%, JP Associates down 4.32%, Tata Steel down 3.76%, Reliance Communications down 3.34% and M&M down 3.27% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.28%, Germany's DAX down 0.54% and Britain’s FTSE 100 down 0.30%.

Asian stock markets snapped the day’s trade mostly lower on Tuesday as talks dragged on to resolve a massive debt mess in Greece before it explodes into a wider financial crises. Officials in Greece struggled to make headway on austerity measures which are crucial for obtaining the next installment of the bailout package for the debt-strapped country, with Prime Minister Lucas Papademos and other political leaders delaying a key meeting on reforms demanded by the country’s creditors. Meanwhile, Chinese shares declined over one and half a percent with the Shanghai Composite Index breaking below 2,300 after hopes of a cut in bank reserve requirements were doused.