Post session - Quick review

After three consecutive session’s gain, benchmark equity indices surprisingly took a U-turn to finish the trade in negative terrain. Drubbing of Auto counter, coupled with Power and Capital Goods space proved taxing for the markets. Auto stocks ran out of fuel, when shares of Tata Motors, tanked over 2% after the automaker reported a 7 percent fall in total sales, including exports in April to 60,086 units from 64,383 units in the corresponding period of last year. Profit booking, which emerged after three sessions of northbound journey, mainly dragged both, BSE’s -- Sensex -- and NSE’s -- Nifty -- below the 17300 and 5250 bastion. Bewildered swings were witnessed in 30 scrip sensitive index, which after piercing through the 17400 psychological levels, cooled substantially to conclude below it. However, more than profit booking, it was consolidation, that catered to the lackadaisical close of Indian equity markets as bourses after staying in fine contour for the entire trading session, faced stiff resistance near the higher level.

Meanwhile, Asian pacific shares rose on Wednesday, as surveys pointing signs of growth in American and Chinese manufacturing soothed worries about the global economic outlook. Rise in April's final HSBC China Manufacturing Purchasing Managers Index also underpinned gains for regional stocks, with the latest figures indicating that growth in Asia's biggest economy is picking up after a lull over the past few months. The final HSBC China Manufacturing PMI, a gauge of nationwide manufacturing activity, rose to 49.3 in April compared with 48.3 in March.

Back home, the sentiment for significant trading session remained upbeat on reports that pace of growth in India's factory output inched up in April, supported by bulging order books, but slower output growth and increasing price pressures dampened sentiment. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 54.9 in April from 54.7 in March. Investors’ sentiment in the early trade were also underpinned by upbeat corporate earnings. Colossal gains of India’s largest consumer goods company- HUL-lit up the Fast Moving Consumer Goods (FMCG) space. HUL’s stocks rose after the company stated that it continues to see strong consumer demand, after beating estimates on Tuesday with a 21 percent rise in quarterly profit, helped by higher volumes and prices.

However, investors were also encouraged to place risky bets after shares of Bharti Airtel rose over 2 per cent in the early trade even as the company posted a decline of 28.19 per cent in consolidated net income for the fourth quarter ended March 31, 2012. Additionally, Cable companies including Hathway and WWIL gained significant traction in the session after Telecom Regulatory Authority of India’s notification on digitizing cable TV distribution recommended a mandatory 'carriage fee' - or, the money that broadcasters have to pay to cable companies for them to carry their channel. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1316:1472 while 144 scrips remained unchanged. (Provisional)

The BSE Sensex lost 47.36 points or 0.27% and settled at 17,271.45. The index touched a high and a low of 17,432.33 and 17,265.48 respectively. 10 stocks advanced against 20 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.38% while Small-cap index was up 0.17%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 2.25%, TECk up 0.76%, IT was up 0.48%, FMCG up 0.17% and Bankex up 0.07% were the only gainers while Auto was down 1.87%, Power down 1.38%, Capital Goods down 1.09%, PSU down 0.82% and Oil & Gas down 0.64% were the top losers.

There top gainers on the Sensex were Bharti Airtel up 2.42%, DLF up 2.30%, HUL up 2.02%, Cipla up 1.78% and HDFC Bank up 1.62% while, Tata Motors down 3.71%, Maruti Suzuki down 3.20%, Coal India down 2.82%, Tata Power down 2.51% and Bajaj Auto down 1.79% were the top losers in the index. (Provisional)

Despite a sluggish global market, India’s exports crossed the $300 billion mark and grew $303.7 billion in FY’12 as against $251.1 billion in FY’11, registering a growth of 20.94% y-o-y. However, imports grew by 32.15% to $488.6 billion in March due to rising oil and non-oil imports. As a result the trade deficit or the gap between exports and imports for the FY’12 was estimated at $184.9 billion which was 56% higher than the deficit of $118.6 million during April-March 2010-11.

The large trade deficit is a cause of concern but very little can be done to check it as the increase has largely been on account of large imports of petroleum, gold, silver and coal besides machinery inputs.  Oil imports were up by a whopping 47% and stood at $155.63 billion during 2011-12 over the previous year's $105.9 billion. The non-oil imports grew 26% to $333 billion over the previous year’s $263.8 billion.

For the month of March 2012, exports fell by 5.7% and stood at $28.6 billion ($30.4 billion). Imports during March grew 24% to $42.5 billion ($34.2 billion). The oil imports during March rose by a good 32.45% to $15.83 billion over $11.95 billion in corresponding last year. The non-oil imports also went up by 20% to $26.7 billion in March. The trade figures have come in at worrisome levels especially after the recent revision in outlook on long-term credit rating by Standard and Poor's. However, the rise has been chiefly due to the surge in the ‘relatively inelastic’ oil imports.

Going forward, as per Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO), the deficit can be bridged by increasing exports through market and product diversification. The government can also provide incentives to exporters through policy measures like lowering of interest rates on credit and providing rebate on State and local taxes. Greater marketing support to micro and small enterprises through creation of an Export Development Fund can also help in improving the export figures.

India VIX, a gauge for market’s short term expectation of volatility gain 4.04% at 18.54 from its previous close of 17.82 on Monday. (Provisional)

The S&P CNX Nifty lost 17.60 points or 0.34% to settle at 5,230.55. The index touched high and low of 5,279.60 and 5,226.45 respectively. 14 stocks advanced against 36 declining ones on the index. (Provisional)

The top gainers on the Nifty were DLF up 2.89%, Bharti Airtel up 2.51%, Cipla up 1.97%, HUL up 1.96% and PNB up 1.86%.On the other hand, Tata Motors down 3.55%, Maruti Suzuki down 3.42%, Grasim down 2.63%, ACC down 2.45% and Ambuja Cement down 2.39% were the top losers. (Provisional)

The European markets were trading mixed, with France's CAC 40 up 0.73%, Germany's DAX up 0.31% and Britain’s FTSE 100 down 0.43%.

Buoyed by strong US factory activity data, Asian equity indices rallied on Wednesday as it raised hopes that the world’s biggest economy remained on a recovery track. Moreover, the sentiment also got some boost after growth in Asian manufacturing improved broader sentiment. The HSBC China Purchasing Managers’ Index (PMI), geared to smaller firms, improved to 49.3 in April from 48.3 in March, showing that the rate of deterioration had slowed following a difficult first quarter.

Meanwhile, China shares climbed 1.76 percent to highest closing level in seven weeks, after the country’s securities regulator said it would reduce transaction fees for trades on the Shanghai and Shenzhen stock exchanges. The China Securities Regulatory Commission said on Monday that it would reduce transactions fees collected by both the stock exchanges and the official clearing house starting June 1. It estimated the combined impact would be 3 billion yuan ($475.42 million) less fees collected in a year, a reduction of 25 percent.

South Korean KOSPI surged about a percentage point after South Korea’s manufacturing activity expanded for a third straight month in April, but at a slower pace than in March, backed by a continued rise in new export orders. The PMI was at a seasonally adjusted 51.9 in April, down from 52.0 in March. However, the Taiwan PMI fell to 51.2 in April from 54.1 in March as manufacturers reduced output prices in line with softening demand conditions, despite registering continued cost inflation. A reading above 50 indicates expansion in manufacturing activity.