Markets rebound from day’s lows to settle flat; F&O series concludes with 6% cuts

Indian stock markets snapped the March series futures and options contract expiry session on a sluggish note with moderate cuts of around one third of a percent. Despite registering their first negative close since November 2011 in the March series, the frontline indices still have amassed around twelve percent gains since the start of 2012.

The expiry session turned out to be an extremely volatile one and the markets even registered third highest trading volumes in the day. The benchmark equity indices went on to stage a swift recovery in the second half of trade on Thursday after suffering hefty pounding through the first half.

The key gauges even breached the psychological 5,150 (Nifty) and 16,950 (Sensex) levels in the early noon session as selling pressure got aggravated after the negative opening of European markets which extended their declining momentum for third straight session on growing worries over global economic slowdown. The Asian peers too remained in somber mood as investors at large took to hefty risk aversion amid reports that new orders for US durables increased only modestly in February, while a gauge of future business investment also fell short of expectations, spurring qualms over the pace of recovery in the world's largest economy.

However covering of hefty short positions that got build through the series, in the late hours of trade, ensured that the benchmarks recover over a percentage points from the low points of the day.

Meanwhile, reports that India's core sector industries' output grew 6.8% year on year in February provided some solace to sentiments. It had grown by 6.4% in February 2011. The growth is significantly higher than the average 4.4% seen during the financial year so far (April to February). Investors were seen squaring off hefty positions from the Capital Goods counter after the core sector growth numbers were released and the index slumped over one and half a percent being top laggard in the space.

The IT and defensive FMCG counters too went home with notable losses. On the flipside defensive - Healthcare pocket along with the Consumer Durables and Auto counters settled on a positive note.

The NSE’s 50-share broadly followed index Nifty, eased one third of a percent and settled below the psychological 5,150 support level while Bombay Stock Exchange’s Sensitive Index - Sensex- shed around sixty points to close above the psychological 17,050 mark. The broader markets too managed to trim their losses and settled on a positive note, outperforming their larger peers.

The markets snapped a volatile session on extremely large volumes of over Rs 2.88 lakh core, while the turnover for NSE F&O segment also remained on the lower side as compared to that on Wednesday at over Rs 2.50 lakh crore. The market breadth remained optimistic as there were 1539 shares on the gaining side against 1270 shares on the losing side while 105 shares remained unchanged.

On the F&O front, Nifty and Sensex for the March series went on to halt the three series gaining streak and registered their first negative close since November 2011 by plunging around 6% each.

Besides, the broader markets managed to snap the series on a weak note with the mid cap and small cap indices plunging around 2% and 6% respectively. The rate sensitive counters like Realty and Banking remained among prominent laggards in the series as they ended with hefty losses of about 7% and 13% respectively.

From the expiry perspective, market wide rollover of 58.8% was observed in the series which was lower than the three month average of 62.7% while Nifty rollovers were at 52%, lower than 3 month average of 59.9%. Sectorally, the Sugar, capital goods, power, metal, Infrastructure and Automobile counters witnessed high rollovers while sectors like technology, telecom, banking, Oil & Gas and Pharma pockets observed relatively low rolls.

Among individual stocks, vast rollovers were witnessed in heavyweights including Maruti (70%), Tata Motors (68%), PNB (65%) and Suzlon (71%) while low rollovers were seen in stocks like Wipro (32%), HDFC (35%) and GAIL (39%).

Finally, the BSE Sensex lost 63.01 points or 0.37% to settle at 17,058.61, while the S&P CNX Nifty declined by 15.90 points or 0.31% to close at 5,178.85.

The BSE Sensex touched a high and a low of 17,109.35 and 16,920.61 respectively. The BSE Mid cap and Small cap index up by 0.16% and 0.70% respectively.

The top gainers on the Sensex were Jindal Steel up 4.42%, Tata Power up 2.99%, Hero MotoCorp up 1.55%, Wipro up 1.27% and ONGC up 1.14%, while L&T down 2.09%, Infosys down 1.78%, TCS down by 1.71%, Bharti Airtel down by 1.60% and BHEL down by 1.35% were the major losers on the index.

The top gainers on the BSE sectoral space were Health Care (HC) up 0.92%, Consumer Durables (CD) up 0.88%, Auto up 0.67%, Metal up 0.39% and Realty up 0.35%, while Capital Goods (CG) down 1.61%, IT down 1.17%, TECk down 1.01%, FMCG down 0.65% and Bankex down 0.15% were the top losers on the BSE sectoral space.

Meanwhile, the eight core industries expanded by 6.8% in February, against 6.4% in the same period last year. During April-February 2011-12, the growth of core industries slowed down to 4.4% from 5.8% in the same period last year.

According to the provisional data released by the government, coal registered the highest growth of 17.8%, up from a negative (-) 5.8% growth in Feb 2011. Electricity, which has the highest weight amongst the core industries, grew by 8% compared to its 7.2% growth in February 2011. Cement production registered a growth of 10.8% in February 2012 against its 6.5% growth in February 2011. 

Crude oil production grew by 0.4% in February 2012 against 12.2% in the similar period of last year. Natural gas production contracted by (-) 7.6% against (-) 7.3% year-on-year. The petroleum refinery output grew by 6.2% from 3.2% and steel production registered a growth of 4.3% in February 2012 against its 18.5% growth in February 2011 and Fertilisers segment expanded by 4.1% from 4.8% in Feb 2011.

The Eight core industries have a combined weight of 37.90% in the Index of Industrial Production (IIP) and hence a movement in their numbers impacts the IIP figures. The data represents the growth of infrastructure in the country and is considered to be an important indicator of industrial activity in the economy. They had grown by a meager 0.5% in the January.

The S&P CNX Nifty touched a high and low of 5,194.30 and 5,135.95 respectively.

The top gainers on the Nifty were Tata Power up 7.11%, Ranbaxy up 6.20%, Jindal Steel up 3.71%, BPCL up 3.28% and JP Associates up 2.34%. On the flip side, Siemens down by 3.26%, RCOM down 2.67%, L&T down 2.08%, Bharti Airtel down 2.01% and Sterlite Industries down 1.78% were the top losers on the index.

The European markets were trading in red, as France's CAC 40 down 1.05%, Britain’s FTSE 100 down 0.79%, while Germany's DAX was down by 1.18%.

Sentiments remained bearish for second straight session in the Asian region and most of the equity indices snapped the day’s trade in the red on Thursday as weak economic data from United States and Britain stoked worries about the global economy health. Earlier, the Asian counters made a choppy start followed a fall on Wall Street after figures from the US Commerce Department showed a slower-than-expected rise in new orders for manufactured durable goods, that came after an index of US consumer confidence on March 27, 2012 showed a slip, while home prices continued to fall in January. Moreover, Official data in Britain showed that the country's economy shrank a revised 0.3 percent in the final three months of 2011, worse than the 0.2 percent drop previously estimated.

Tokyo shares fell 0.67 percent as energy plays were hurt by talk among Western powers on releasing oil reserves to damp rising prices while, Seoul shares fell to a near three-week closing low, weighed down by program trading as offshore investors sold futures. Further, Hong Kong and China shares extended losses ending with a cut of about one and a half percent, led by banks and energy stocks, as weak corporate results underscored fears that the slowdown in China is hurting profitability more than expected.