Post session - Quick review

Indian equity markets showcased remarkable reversal in the latter part of the session to end the day, marred by volatility, in green. The recovery was noteworthy as Indian equity markets after witnessing nasty butchery in the first half of the day, recuperated substantial ground to emerge victorious. Solid earnings from country’s largest lender, State Bank of India (SBI), besides, spilling optimism in banking index, fortified the sentiment at D-street.  Reversal of Indian equity markets from intra-day’s low, pushed 30 scrip sensitive index, Sensex, above the 16200 level and widely followed index, Nifty, above the 4900 psychological level. However, despite rallying for 3 out of five sessions, Sensex, plunged over a percentage points, while, Nifty lost close to half a percent.

Indian equity markets, participating in global gut, witnessed an early carnage after Moody’s slashed debt ratings of 16 Spanish banks by one to three notches, citing the effects of the ongoing recession and the Spanish government’s own reduced creditworthiness. Adding to the list of risk for the Indian investor’s was the Retail Inflation data, which surged 10.36 per cent in April, compared to 9.38 per cent in the previous month due to a sharp increase in prices of vegetables, edible oil and milk products. On the global front, Asian shares ended the session on gloomy note, undermined by overnight plunge on Wall Street on a series of disappointing economic reports from the US where jobless claims held steady amid expectations of a decline, manufacturing in Philadelphia region surprisingly decelerated in May for the first time in eight months and US April leading economic index declined 0.1%.

However, the trend was exceptional for local equity markets after the second half of the session, which shrugging aside the shaky opening of European markets, focused on SBI’s earnings and short covering activities. Led by higher interest income and lower provisioning for non-performing loans, SBI on Friday reported a forecast beating net profit of Rs 4,050 crore for the fourth quarter (Jan-March) of FY12 as against Rs 21 crore a year ago.

Amidst sluggish trade, Aviation stocks flew high after hopes of clearance of 49% Foreign Direct Investment (FDI) in the aviation sector, gathered steam. Buoyant on this development were stocks of Kingfisher Airline, Spicejet and Jet Airways that rallied in the range of 2-4%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1255: 1431while 125 scrips remained unchanged. (Provisional)

The BSE Sensex gained 82.27 points or 0.51 % and settled at 16,152.75. The index touched a high and a low of 16,206.35 and 15,809.71 respectively. 20 stocks advanced against 10 declining one’s on the index (Provisional)

The BSE Mid-cap index lost 0.27 % while Small-cap index was down by 0.24%. (Provisional)

On the BSE Sectoral front, Bankex up by 1.75 %, Fast Moving Consumer Goods up by 1.14 %, Public Sector Undertaking (PSU) up by 0.79%, OIL&GAS up by 0.58% and METAL up by 0.40%, however, Auto down by 1.90%, Capital Goods down by 0.53 %, Realty down by 0.14 %, TECk down by 0.11 % and CD down 0.10 % were the top losers. (Provisional)

The top gainers on the Sensex were  SBI up 5.86 %, ICICI Bank up 2.86 %, ITC up 2.26 % and Sterlite Inds up 2.18% Gail India up 1.98%. While, Tata Motors down 3.54 %, Maruti Suzuki down 3.32 %, Bajaj Auto down 2.68%, BHEL down 1.73% and Tata Steel down 1.43% were the top losers. (Provisional)

Meanwhile, retail inflation, as measured by the Consumer Price Index (CPI) has moved up to 10.36% in April 2012 as compared to 9.38% in March. Cost of living has also become more expensive for the urban consumer in April as compared to the rural, as inflation in urban areas surged by 11.10% versus 9.86% in rural (y-o-y).

The major jump in prices came from vegetables that became dearer by a whopping 24.55% in April 2012 as compared to the same month last year. Other commodities that showed a substantial increase were edible oils, which increased by 17.63% followed by milk and products which went up by 14.9% in April 2012, y-o-y basis.

Overall food inflation stood at 10.18% y-o-y. ‘Fuel and light’ as well as ‘clothing bedding and footwear’ also witnessed double digit inflation and increased by 11.4% and 11.95% respectively.

The rising inflation, both the CPI and WPI (7.32% in April), are expected to be a cause of concern for the Reserve Bank of India (RBI) which has been trying to control the spiraling inflation since the last fiscal. Food inflation, in particular has been stubbornly high making the task of rate cuts and hence growth, difficult.

The government of India has recently moved to the practice of reporting the CPI numbers as it feels that they are more representative of the inflationary pressures borne by the common man. However since the Index is still very new, it will be a while before the RBI starts using it as the basis for policy decisions.

India VIX, a gauge for market’s short term expectation of volatility lost 0.16% at 23.55 from its previous close of 23.59 on Thursday. (Provisional)

The S&P CNX Nifty gained 21.25 points or 0.44 % to settle at 4,891.45. The index touched high and low of 4,908.50 and 4,788.95 respectively. 33 stocks advanced against 17 declining on the index. (Provisional)

The top gainers on the Nifty were  SBI up 5.82 %, Sesa Goa up 3.84 %, Grasim up 3.69 %, IDFC up 3.31 % and SAIL up 3.25 %.(Provisional)

On the other hand Tata Motors down 3.87 %, Ambuja Cement down 3.52 %, Maruti down 3.08 %, Bajaj-Auto down 2.88 % and BHEL down 2.35 % were the top losers. (Provisional)

The European markets too were trading in red zone, with France's CAC 40 down 0.11%, Germany's DAX down by 0.41% and Britain’s FTSE 100 down 0.91%.

Pressurized by eurozone turmoil and weak US data, all the Asian equity indices ended the day’s trade in the negative terrain on Friday. All the Asian counters butchered for second day in a row after Moody’s Investors Service cut the long-term debt and deposit ratings of the 16 Spanish banks, saying the government’s ability to support some banks had weakened while, feeble US data added to the pessimism. The nations’ conference board reported that the country’s leading economic indicators showed a decline of 0.1% in April after a gain of 0.3% in March. Also, the weekly claims for jobless benefits remained at same levels.

Meanwhile, Chinese shares fell over 1.4 percent to a one-month low on and Hong Kong shares suffered a third-straight loss on Friday, declining to a second weekly loss in a row as growing political instability in Europe pulled financial stocks down and underwhelming US economic data increased risk aversion. Moreover, Taiwan Weighted tumbled about three percent as market-men sold off Asian equities after further indication of rising instability among Spanish banks and political turmoil in Greece, but Ta Chong Bank surged on news it will be sold.

Stock market in Indonesia remained closed on Friday on account of a public holiday.