Post session - Quick review

Turbulence remained constant companion for D-street in the week gone by, where in the barometer gauges sliding for 4 out of 5 trading sessions, concluded the week with a nasty nick of over 3 percent. Barometer gauges, after showcasing dead cat bounce on GAAR deferment in the first trading session, pulsated with cut of close to percentage point on the last trading session of the week. The 30 share barometer index, Sensex, knocked off over century of points in today’s trading session to conclude below the 16300 crucial fortresses. Similarly, the widely followed index, Nifty, offloaded over 25 points to end sub 5000 bastion.

Relentless selling by foreign institutional investors and feeble rupee in absence of positive triggers from global front, were taxing Indian equity markets. The shocking de-growth in factory output data for the month of March, mainly took the markets by surprise, thereby pushing the barometer gauges near the low point of the day. Indicating sharp slowdown in the economy, industrial production declined by 3.5% in March due to contraction in manufacturing and mining output. Growth in the factory output, as measured by the Index of Industrial Production (IIP), was higher at 9.4 per cent in March last year and 4.1 per cent in February. Sharp contraction was witnessed in Capital Goods stocks post IIP data highlighted that capital goods production dipped 21.34% in March 2012 from a year earlier, compared with a 10.17% increase in February 2012. BGR Energy Systems (-3.03%), Punj Lloyd (-3%), Larsen & Toubro (- 2.38%), Siemens (-1.51%), were the prominent losers of the Capital Goods gauge.

Nevertheless, short covering emerged in the last minimized some losses of the bourses, as bounce back of Auto stocks, soothed sentiments. Auto stocks earlier in trade bore the brunt of after data showed passenger car sales in India witnessed slowest growth during April in 10 years. Maruti, Hero MotoCorp, Tata Motors and Bajaj Auto all tanked in the 1-3% range, however short covering that came in the last hours of trade, gave some solace. However, Aviation stocks ran out of the fuel with DGCA orders against fair hike. Spicejet, Kingfisher Airlines, Jet Airways, all got pounded in the range of 1.5-3.5% each.

Lack of support from global peers, also had its implication on Indian equity markets. Much of weakness was endorsed by regional counterparts, which spooked by JPMorgan's $2 billion loss from a failed hedging strategy, spawned declines on Friday, as deepening political turmoil in the euro zone fuelled concerns about global growth. However, even disappointing China economic data, sapped investors demand for risky assets. On the other hand, even European shares added to the pessimistic milieu as caution persisting ahead of further political developments in Greece and Spain's announcement of banking reforms, kept the trend subdued for European region shares.

Back on the home turf, sentiment were also pounded as country's third largest steel producer, JSW Steel plunged over 5% to end at Rs 627.05 after Supreme Court ordered for CBI probe into the alleged massive illegal mining activities in Karnataka and the roles of former Karnataka chief minister BS Yeddyurappa and two companies JSW Steel and Adani Enterprises, in the scandal.

On the result front, there were more misses than hits. Drug marker Dr Reddy's Laboratories shares dipped over 2% after the company missed the street estimates by reporting mere 2.46% rise in consolidated net profit at Rs 342.70 crore for the fourth quarter ended March 31,2012 as compared to Rs 334.47 crore for March quarter of previous fiscal. Shares of public sector lender Indian Bank plunged after March quarter earnings disappointed the Street. The lender's core income or the net interest income (NII) declined 2.5 per cent at Rs 1,082.6 crore in the fourth quarter against Rs 1,111 crore in the corresponding quarter last year. On the other hand, shares of Kerala-based private sector lender Federal Bank rallied as the bank beat Street estimates in the March quarter. Net interest income (NII), which is the core income for banks rose 9.7 per cent at Rs 491.21 crore in the January - March against Rs 447.64 crore a year ago.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 995:1744 while 132 scrips remained unchanged. (Provisional)

The BSE Sensex lost 119.63 points or 0.73% and settled at 16,300.42. The index touched a high and a low of 16,447.24 and 16,233.76 respectively. 7 stocks advanced against 22 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index lost 0.83% while Small-cap index was down 0.85%. (Provisional)

On the BSE Sectoral front, Auto up 0.66%, and Realty up 0.01% were the only gainers while Health Care was down 1.92%, Power down 1.57%, Metal down 1.16%, FMCG down 1.10% and IT down 1.08% were the top losers.

The top gainers on the Sensex were Bajaj Auto up 3.41%, Tata Motors up 2.57%, DLF up 0.91%, SBI up 0.83% and BHEL up 0.75% while, Tata Power down 5.56%, Sun Pharma down 3.81%, Hindalco Industries down 3.36%, Cipla down 2.67% and Coal India down 2.35% were the top losers in the index. (Provisional)

Meanwhile, the March IIP numbers, which contracted to -3.5%, has sent tremors across the Indian Economy. Although, economists were not expecting a good number, most were working with a 1% industrial growth assumption. The March IIP numbers are against the February numbers of 4.1%.

The IIP number clearly indicates that growth has not bottomed out and there could be surprises in store. C Rangarajan, Chairman of PMEAC has termed the IIP number as ‘very disappointing’. Given the dismal numbers, the GDP growth numbers will also need a downward revision.

The break up of the IIP shows that the capital goods sector has seen a sharp decline of -21.3% and manufacturing has also declined by -4.4%. These two numbers are a dampener on sentiment as they indicate a slowdown in investment and output and are likely to affect future growth. The capital goods sector had seen a growth of 10.6% in February and manufacturing had grown by 4% in the same month.

RBI’s stance on further chopping the interest rates is eyed as inflation will play a major role in that decision. Also, current account deficit of 4% may affect the central bank’s key decision.

India VIX, a gauge for market’s short term expectation of volatility lost 1.05% at 22.48 from its previous close of 22.72 on Thursday. (Provisional)

The S&P CNX Nifty lost 35.95 points or 0.72% to settle at 4,929.75. The index touched high and low of 4,976.25 and 4,906.15 respectively. 15 stocks advanced against 35 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 4.31%, Bajaj Auto up 3.74%, Tata Motors up 2.80%, Sesa Goa up 2.40% and IDFC up 1.77%.On the other hand, Tata Power down 5.70%, Sun Pharma down 3.78%, Grasim down 3.73%, Ranbaxy down 3.68% and Hindalco Industries down 3.62% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.79%, Germany's DAX down 0.41% and Britain’s FTSE 100 down 0.40%.

Stock markets in Asian region continued to reel under pressure and shut shop entirely in the red as investors remained worried over the euro-zone debt crisis Friday as politicians in Greece struggled to form a coalition after pro-austerity parties were lashed in weekend elections. However, the euro held its own in the morning following reports from Athens that the head of Greece’s socialist Pasok party was making tentative progress on building a government, after two other groups had failed. Moreover, in Athens Pasok leader Evangelos Venizelos is in talks with other parties to build a coalition after Sunday’s polls saw almost two-thirds of voters reject austerity policies imposed on the country in return for bailout cash.

Meanwhile, Singapore index Straits Times fell by 0.70 percent, dragged down by casino operator Genting Singapore PLC and investors retreating from risky assets on concerns about global growth. While, Hong Kong shares tumbled for a seventh straight day on Friday, after China’s April inflation figures were largely in line with estimates, further dousing hopes of near-term easing despite signs of a steeper slowdown in the world's second-largest economy. Mainland Chinese markets were also weaker and snapped the day’s trade with a cut of over half a percent.