Post session - Quick review

Snapping four days gaining streak, Indian equity markets witnessed a catastrophe, a day ahead of the Union Budget 2012-13. Brutal selling was seen across the board as the rate sensitive’s were minced after the Reserve Bank of India (RBI), dashed some of the bets that the central bank would surprise markets with a cut in the repo rate, maintained the status quo on interest rates. Underscoring its concern about inflation following the sudden spike in global oil prices, the RBI left interest rates unchanged at 8.5 percent at its mid-quarter review.

Besides the standstill policy of RBI, better than expected advance tax numbers also failed to soothe investor’s, which going ahead of the big day, offloaded their position. Lack of positive global leads also factored into the markets. On the global front, after the disappointing close of Wall Street overnight, Asian pacific stocks too repeated the trend, for casting a shadow into Indian equity markets. Asian stocks ended mostly in negative terrain as concerns that China's growth won't be as robust as once thought tempered optimism stemming from a positive assessment the Federal Reserve made on the U.S. economy.

The fanaticism of European share market failed to buttress Indian equity markets, which witnessing a volatile session, ended in shambles. European shares, extending their march towards last summer’s highs, opened near five-month highs as a brighter global economic outlook fuelled investor risk appetite, underpinning the dollar and reducing the appeal of safe-haven government debt.

Back on the home turf, the economic survey also failed to give any significant upside triggers to the markets, instead the survey cautioned that attention should to given to the asset price bubbles in the real estate, stock markets and the risks associated with these, which carry implications for the real economy. Thus, The benchmark 30 share index of Bombay Stock Exchange (BSE)-Sensex- after commencing the session above the psychological 17900 level, ended distantly away , at 17600 bastion, with a appalling cut of over gargantuan percent and a half.  Meanwhile, the 50 share index of National Stock Exchange (NSE)-Nifty-too stumbling above half a century of points concluded sub 5400 psychological level. The broader indices too were beaten out of shape as both midcap and smallcap index. The session which was marked with large trading volume of 1.5 lakh crore ended with disappointing market breadth which was well in the favour of declines.

The BSE Sensex lost 237.90 points or 1.33% to settle at 17,681.40. The index touched a high and a low of 17,918.25 and 17,622.13 respectively. 5 stocks advanced against 24 declining ones while 1 stock remained unchanged on the index (Provisional). The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1035:1814 while 134 scrips remained unchanged. (Provisional)

The BSE Mid-cap index lost 1.40% while Small-cap index shed 0.96%. (Provisional)

On the BSE Sectoral front, IT up 0.10% was the sole gainer while Consumer Durables down 4.10%, Realty down 2.67%, Bankex down 2.65%, PSU down 2.03% and Capital Goods down 2.01% were the top losers.

The top gainers on the Sensex were HUL up 2.20%, Wipro up 1.43%, NTPC up 1.27%, TCS up 0.72% and Sun Pharma up 0.38%.

On the flip side, DLF down 4.98%, BHEL down 3.39%, HDFC Bank down 3.23%, ONGC down 2.54% and Sterlite Industries down 2.36% were the top losers in the index. (Provisional)

The Reserve Bank of India (RBI) has kept its policy rates unchanged in its mid-quarter monetary policy review. Even though the apex bank had recently slashed the CRR rate to ease liquidity, it has kept the interest rates unchanged due to the still uncomfortable levels of inflation. Going forward, the focus shall remain on growth, but the timing and magnitude of rate cuts shall be determined by the levels of inflation, as per the apex bank.

As per the RBI, on the domestic front, while most indicators suggest that the economy is slowing down, the performance in Q4 of 2011-12 is expected to be better than that in Q3. Inflation has broadly evolved along the projected trajectory so far. However, upside risks to inflation have increased from the recent surge in crude oil prices, fiscal slippage and rupee depreciation. Besides, there continues to be significant suppressed inflation in fuel, fertilizer and power as administered prices do not fully reflect the costs of production. While corporate sales growth in Q3 of 2011-12 was robust, margins moderated, reflecting increasing difficulty in passing on rising input prices.

The Central Bank has given a slightly positive outlook on the global economy. It has stated that the recent macroeconomic data for the US economy has shown some positive signs, in particular for the labour market. Immediate financial market pressures in the Euro area have also eased due to the European Central Bank (ECB) injecting liquidity of more than 1 trillion euros. However since the emerging and developing economies (EDEs) are showing signs a slowdown, the global growth for 2012 and 2013 is expected to be lower than earlier anticipated. Oil prices continue to remain a concern.

India VIX, a gauge for market’s short term expectation of volatility gain 2.83% at 25.42 from its previous close of 24.72 on Wednesday. (Provisional)

The S&P CNX Nifty lost 80.40 points or 1.47% to settle at 5,383.50. The index touched high and low of 5,462.50 and 5,362.30 respectively. 13 stocks advanced against 37 declining ones on the index. (Provisional)

The top gainers on the Nifty were HUL up 2.19%, NTPC up 1.30%, Wipro up 1.29%, TCS up 0.84% and Tata Steel up 0.51%.On the other hand, Reliance Communications down 4.95%, DLF down 4.88%, IDFC down 4.59%, BHEL down 3.47% and Ranbaxy down 3.45% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.13%, Germany's DAX up 0.42% and Britain’s FTSE 100 up 0.09%.

Sentiments turned choppy in the Asian region after two days rally and most of the Asian equity indices ended the session in the negative territory on Thursday on concerns that China would retain property-market curbs this year unsettled investors, while the US dollar continued to rise broadly and Japanese exporters’ shares extended recent gains boosted by a weaker yen.

Meanwhile, Chinese benchmark Shanghai Composite ended at three-week low declining 0.73 percent as investors’ focus shifted to Chinese growth concerns, after Premier Wen made some fairly negative comments about the property market. However, Japanese Nikkei edged higher by 0.73 percent extending an eight-month high, as the yen’s drop to an 11-month low against the dollar buoyed earnings prospects for exporters.