Post session - Quick review

Start of the F&O’s expiry week turned taxing at Dalal Street as the barometer gauges got knocked off substantially to shut shop below their crucial bastions. Frontline equity indices after getting a muted start went on dismally evaporating gains to settle with a cut of around two percentage points.

Recovery failed to come in despite five week of losses as market-men doubting the fundamentals of Indian markets preferred going short on the concerns that the Reserve Bank of India may not cut interest rates as high international crude oil prices may stoke inflation. Weakness in Indian rupee and global markets on concerns of slow-down in China and Spain's economic issues also placed pressure on the benchmarks.

Selling across sectors tailing sluggish performance of regional counterparts led to the pessimistic start of the bourses. Crash of Asian pacific shares pushed bears to the defensive as Asian stocks fell for a second day, amid concern exporter earnings are deteriorating after a report that Chinese banks have understated the risks of loans to local governments.

The positive momentum of European shares after a positive performance of Wall Street on Friday night too failed to the buttress the sentiment at Dalal Street. European shares clawed back some gains even as investors traded cautiously ahead of key data this week's including an Italian bond auction and a key German economic sentiment index.

Back on the home turf, in early trade sentiment was spooked by the Maharashtra Government proposing 160 times hike in stamp duty for leave-and-licence agreements for residential and commercial properties. Indiabulls Real Estate, Oberoi Realty and Housing Development & Infrastructure, were the stocks that lost in the range of 2-3% each.

Selling was witnessed across all the sectoral gauges, however, toughest hit among them were shares of rate sensitive sector, i.e, Realty,  Bankex and  Power counters, which led to the crack in the 30 share barometer index of Bombay Stock Exchange (BSE)-Sensex-which plummeting over 200 points concluded sub 17100 bastion. Similarly, the 50 share widely followed index of National Stock Exchange (NSE)-Nifty-tanking close to century of points shut shop sub 5200 level. The broader indices too lost over a percent and half points. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 959:1893 while 135 scrips remained unchanged. (Provisional)

The BSE Sensex lost 319.91 points or 1.84% and settled at 17,041.83. The index touched a high and a low of 17,377.59 and 17,021.85 respectively. All the 30 stocks declined on the index (Provisional)

The BSE Mid-cap index lost 1.61% while Small-cap index was down 1.41%. (Provisional)

On the BSE Sectoral front, there were no gainers while Realty down 3.58%, Power down 2.56%, Bankex down 2.42%, PSU down 2.16% and Metal down 2.15% were the top losers.

There were no gainers on the Sensex while, Tata Power down 4.22%, Cipla down 4.10%, ICICI Bank down 4.06%, Sterlite Industries down 3.63% and NTPC down 3.56% were the top losers in the index. (Provisional)

Meanwhile, with crude oil prices touching $125 per barrel, the Finance Minister has stated that the government may have to take certain tough decisions in the coming months. The comments are being seen as a signal from the FM towards hiking of fuel prices including diesel and LPG.

Given the government’s large fiscal deficit of around 5.9% of GDP, it is widely expected that it may have to increase fuel prices to cut down its burden of subsidies. Oil prices have been rising consistently in the last year and the world could see a further shortage due to the sanctions imposed on Iran. In such a scenario it may be difficult for the government to contain the fiscal deficit unless fuel prices are hiked.

The FM further clarified his stand of not raising fuel prices in the budget by stating that there are other methods of going about policy changes and a mere announcement would have served no purpose if it could not be implemented on ground.

Mukherjee has also hinted at an interest rate cut by the RBI given the declining trend of inflation in the past 3 months.  This, he expects will boost investor sentiments. The government had set an ambitious fiscal deficit target of 4.6% of GDP for the current fiscal. However the FM, in the budget, stated that it would actually be around 5.9%. A target of 5.1% has been set for the FY ’13 which has been termed as pragmatic yet ambitious by economists if the food security bill is implemented and crude oil prices continue rising. Hence slashing subsidies would probably be the only option left for the government.

India VIX, a gauge for market’s short term expectation of volatility gain 14.56% at 26.74 from its previous close of 23.34 on Friday. (Provisional)

The S&P CNX Nifty lost 101.25 points or 1.92% to settle at 5,176.95. The index touched high and low of 5,274.95 and 5,174.90 respectively. 3 stocks advanced against 47 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 2.77%, Kotak Bank up 0.75% and Dr. Reddy’s Lab up 0.06%.On the other hand, Sesa Goa down 4.91%, IDFC down 4.74%, PNB down 4.36%, Axis Bank down 4.35% and Tata Power down 4.22% were the top losers. (Provisional)

The European markets were trading on mix note, with France's CAC 40 down 0.14%, Germany's DAX up 0.32% and Britain’s FTSE 100 up 0.38%.

Southward journey continues in Asian region and most of the Asian equity indices snapped the session in the negative terrain on Monday, with materials and technology stocks losing ground amid concerns about the impact on profits due to slowdown in the global economy. Moreover, the sentiments in the region remained dampened as lingering concerns about the Chinese economy cancelling out a positive lead from Wall Street and bargain hunting.

Meanwhile, Taiwan stocks closed 1.35 percent lower, pressured by heavyweights such as TSMC, with glass and ceramics countered the biggest losers, down 3.61 percent. Hong Kong shares were flat at midday on Monday, as strength in local developers offset weakness in Chinese banks on fears of a potential incorrect classification of local government loans and fresh fund raising in the sector. However, Japanese Nikkei shares average edged a tad higher, recovering from last week's retreat, as investors bought metal shares and picked up laggard blue chips, with a softer yen continuing to underpin market sentiment.