Post session - Quick review

Technical bounce back which was overdue since past three sessions finally crept into Dalal Street on Tuesday as barometer gauges managed to sneak out modest gains. Encountering, the choppy session of trade, benchmark indices which started on a muted note, firmed up significantly to pocket gains of close to half a percentage points to conclude above the 17300 (Sensex) and  5250 (Nifty) bastions respectively.

Short covering that emerged post two session of massacre mainly led to the market in green. Apart from this, buying in select blue chip stocks available at lower levels, fed into the long waiting bulls, which waking up from their slumber covered the space.

The recovery made by the bourses was v-shaped as the bourses after stumbling in noon deals, made a lot of efforts to reclaim their psychological level. Although the session, which was large on its volume of over Rs 1.5 lakh crore, witnessed a lot of intra-day volatility, but still the bounce back which came after three sessions of appalling fall, was commendable, as Indian equity markets managed to pull it well for themselves in absence of any significant positive global leads.

Most Asian stock markets ended lower in listless trading on Tuesday as the absence of catalysts and a holiday in Japan weighed on demand, while downbeat comments about Chinese growth from BHP Billiton officials dragged on the Australian dollar and the Sydney market. Investors were a little discouraged following a below-view reading Monday on the US National Association of Home Builders' housing market index. However, the impact on market sentiment was limited as the housing market index remained at its highest level since June 2007. Meanwhile, European shares fell for a second day on Tuesday, as investors continued to take profits after a rally to an eight month high last week.

Back on the home turf, stocks from Consumer Durable, Realty and Fast Moving Consumer Goods counters mainly pushed bears to the defensive, while, stocks from Auto and Capital Goods counters provided a lid to the bourses gains. Auto stocks came under selling pressure. The auto index declined over 1.2%, the most among the 14-sectoral indices listed on the Bombay Stock Exchange. Tata Motors (-2%) and Hero MotoCorp (-2%) were the top losers on the Nifty index. Bajaj Auto (-1.7%) and Maruti (-1.1%) also traded lower. In contrast, the consumer durables witnessed strong buying interest, as the index pivotal registered gain of over 2%. VIP Industries (2.6%) and Titan (2.6%) were among the big gainers in the sector. The broader indices too managed to conclude on a positive note.The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1325:1539 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex gained 37.20 points or 0.22% and settled at 17,310.57. The index touched a high and a low of 17,410.13 and 17,211.73 respectively. 18 stocks advanced against 12 declining ones on the index (Provisional)

The BSE Mid-cap index gain 0.58% while Small-cap index was up 0.02%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 2.49%, Realty up 1.49%, FMCG up 1.07%, Health Care up 0.94% and Bankex up 0.79% were the top gainers while Auto down 1.49% was the sole loser.

The top gainers on the Sensex were Sun Pharma up 2.35%, Jindal Steel up 1.92%, DLF up 1.43%, ITC up 1.27% and Cipla up 1.26%.

On the flip side, Tata Motors down 4.11%, Coal India down 2.34%, Hindalco Industries down 1.84%, Bajaj Auto down 1.13% and Bharti Airtel down 0.77% were the top losers in the index. (Provisional)

Meanwhile, facing increasing queries on how the government plans to control its fiscal deficit, the Finance Minister has hinted at an increase in fuel price soon. He has stated that he will be discussing the issue with various political parties post the budget session (after 30 March), to work out an overall mechanism through which the issue can be resolved.

The oil companies have also been demanding that prices of petrol, diesel, liquefied petroleum gas (LPG) and kerosene be hiked to control the heavy losses they are suffering. Since petrol prices have been deregulated, a hike in them could come in sooner, while  hike in prices of other fuels will require political consensus.

Currently oil companies are losing Rs 14.73 a litre on diesel, Rs 30.10 a litre on kerosene and Rs 439.50 per LPG cylinder. They are also losing over Rs 5 a litre on petrol as petrol prices have not moved in tandem with costs. The government has been sanctioning subsidies to the companies to cover the losses. However, this is significantly impacting its expenditure due to the rapid increase in global crude prices.

An increase in fuel prices will help the government cut its subsidy burden and narrow its fiscal deficit. In the current fiscal, the government has provided Rs 65,000 crore in fuel subsidy, which it hopes to trim down to Rs 40,000 crore in 2012-13. It targets to bring down the subsidy bill to below 2% of GDP in FY’13 and its fiscal deficit to 5.1%.India VIX, a gauge for market’s short term expectation of volatility lost 4.48% at 21.94 from its previous close of 22.97 on Monday. (Provisional)

The S&P CNX Nifty gained 15.50 points or 0.29% to settle at 5,272.55. The index touched high and low of 5,297.35 and 5,233.25 respectively. 32 stocks advanced against 18 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 3.78%, PNB up 3.50%, BPCL up 2.91%, Sun Pharma up 2.60% and Cairn India up 2.14%.On the other hand, Tata Motors down 4.16%, Coal India down 2.61%, Hindalco Industries down 2.13%, HCL Tech down 1.80% and Axis Bank down 1.24% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.15%, Germany's DAX down 1.19% and Britain’s FTSE 100 down 0.99%.

Asian markets snapped the day’s trade mostly in the negative terrain on Tuesday led by losses in Hong Kong and Shanghai on underwhelming corporate earnings. Earlier in this month, China announced that it had lowered its economic growth target to 7.5 percent from 8 percent has spooked investors. In another sign of easing growth in the world’s No. 2 economy, new home prices dropped in 45 Chinese cities in February as the government implemented measures to cool property speculation.

Meanwhile, China Shanghai ended down 1.40 percent on Tuesday on worries over a rebound in domestic inflation after the country raised retail gasoline and diesel prices. China raised retail gasoline and diesel prices by 6 and 7 percent from Tuesday, marking the biggest increase in 33 months, a move that will help refiners reduce heavy losses but is unlikely to hit demand in a big way. While, Seoul Composite fell 0.24 percent as investors cashed in recent gains while waiting for clues about what might give the market some new momentum.

Moreover, stock markets in Japan remained closed for the trade on Tuesday for a national holiday on account of Spring Equinox.