Post session - Quick review

Barometer gauges of Indian markets staged surprising reversal of trade to end near the high point of the day. Snapping three day’s losing streak, frontline indices, recuperated from the sharp plunge on sustained buying activities near support levels at the recent downtrend. Benchmark in early deals slumped near a five months low level on concerns of US and Chinese economy slowdown adding to ongoing crisis in Europe that compelled investors to retract their gains. However, by the close of trade, 30 scrip sensitive index, marginally shied away from the 16000 psychological level, while the 50 share index, Nifty, after bouncing into green, concluded above the 4850 bastion.

Comments of ‘elbow room of rate cut’ of RBI by its deputy governor provided a shot of Adrenaline for Indian equity markets, as this sharpened the expectation of rate cut in the upcoming RBI’s monetary policy review on June 18,2012. Subir Gokarn, the deputy governor of the bank said that the Reserve Bank of India has some room to reduce policy rates following moderate core inflation and decline in global oil prices. Reacting to this banking pivotal rose over half a percentage point to conclude above the 7,400 levels.  However, maximum gains were gathered by Capital Goods counter, closely followed by Realty and Oil & Gas stocks.

Oil Marketing companies which in the morning deals were sulking on petrol rate cut by Rs 2.50, were seen cheerful on reports of  Brent crude oil prices dipping  to 16 month low level, sub $100 per barrel mark. On the flip side, high beta, Consumer Durable (CD) and Metal counters along with defensive Fast moving Consumer Goods (FMCG), staggered at the bottom. However, shares of fertilizer manufacturers gained ahead of arrival of the monsoon season, as monsoon season generally boost demand for fertilizers. The Indian Meteorological Department stated that the weather conditions are 'becoming favorable' for the arrival of monsoon rains over the Kerala coast in 48 hours.

Indian equity markets managed to outperform the globe as Asian counterparts slumped on Monday with Japan's Topix Index, tumbling to its lowest since 1983 and after poor unemployment data in the US casted further doubts over the health of the global economy. US reported nonfarm payrolls rose 69,000 in May, the smallest increase for a year, while unemployment in the world's largest economy edged up to 8.2%. However, European shares traded flat on Monday after opening lower in the wake of murky economic data across the globe last week, which prompted some investors to bet on the greater likelihood of policy action from global central banks. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1163:1467 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex gained 42.65 points or 0.27% and settled at 16,007.81. The index touched a high and a low of 16,012.84 and 15,748.98 respectively. 13 stocks advanced against 17 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.13% while Small-cap index was down 0.12%. (Provisional)

On the BSE Sectoral front, Capital Goods up 2.21%, Realty up 1.56%, Bankex up 1.39%, Oil & Gas up 1.35% and Auto up 0.74% were the top gainers, while Consumer Durables was down 2.93%, FMCG down 1.48%, Health Care down 0.56%, Metal down 0.49% and TECk down 0.46% were the top losers.

There top gainers on the Sensex were L&T up 3.47%, ONGC up 3.00%, DLF up 2.25%, Tata Motors up 2.00% and RIL up 1.80% while, GAIL India down 3.47%, Jindal Steel down 2.38%, Bharti Airtel down 2.26%, Tata Power down 2.22% and Sterlite Industries down 2.14% were the top losers in the index. (Provisional)

Meanwhile, the depreciation of rupee, high levels of inflation and a substantial fiscal deficit are expected to pull down growth in most sectors of the economy in the April-June quarter, says a survey by the Confederation of India Industries (CII). The survey which was conducted across 114 sectors involving 35,000 companies found that almost all sectors of the economy expect deceleration in the first quarter of the current fiscal.  

Sectors like electronic motors, earthmoving and construction equipment, rubber goods, tyres and crude are all expected to register a low growth in the range of 0 to 10%. The share of such sectors has moved up from 42.2% in Q1 of 2011 to 52.6% in the Q1 of 2013.

Sectors expected to have negative growth rate are textile machinery, transformer and pumps and their share too is expected to go up from 5.2% in Q1 2011 to 15.7% in Q1 2013. Sectors such as automobile, energy meters, ball and roller bearings and scooters are expected to experience growth rates in the range of 10-20% but their share in the overall growth scenario too is expected to decrease to 24.5% in the quarter under review from 31.8% in the like period of the previous financial year. Sectors foreseen to witness excellent growth rate i.e. in the range of more than 20% include LCD, LED, and microwave ovens.

As per the survey, slowdown in growth is due to the rate cuts made by the Reserve Bank of India (RBI) in its attempt to control inflation and the global slowdown. Hence it has been suggested that the government and the RBI come up with a concrete recovery plan to put the economy back on the path of growth.

India VIX, a gauge for market’s short term expectation of volatility lost 4.37% at 25.60 from its previous close of 26.77 on Friday. (Provisional)

The S&P CNX Nifty gain 14.95 points or 0.31% to settle at 4,856.55. The index touched high and low of 4,858.30 and 4,770.35 respectively. 27 stocks advanced against 23 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 5.43%, Siemens up 4.58%, Bank of Baroda up 3.78%, L&T up 3.63% and ONGC up 3.19%.On the other hand, GAIL India down 3.13%, Tata Power down 3.06%, Jindal Steel down 2.91%, Asian Paints down 2.64% and Cairn India down 2.62% were the top losers. (Provisional)

The European markets were trading on a mix note, with France's CAC 40 up 0.49% and Germany's DAX down 1.28%. Stock markets in the United Kingdom remained closed on Monday for a national holiday.

Sentiments remained subdued in the Asian region for fourth consecutive day of trade and all the Asian counters snapped the day’s trade in the negative terrain on Monday on concern of slowing global economic growth, triggered by poor US employment data. On Friday that the US economy added a meager 69,000 jobs in May, the slowest rise for 12 months while, the unemployment rate rose for the first time in almost a year to 8.2 percent. The Labour Department also slashed its estimate of April job gains by 33 percent to 77,000. Moreover, deepening debt woes for the euro zone and slowing Chinese growth too weighed on the sentiments in the region.

Meanwhile, Chinese market tumbled over two and half a percent, as country’s non-manufacturing industries expanded at the slowest pace in more than a year and the purchasing managers’ index fell to 55.2 in May from 56.1 in April. In addition, Hang Seng and Nikkei crumbled 2.01 percent and 1.71 percent respectively as weak US data added to worries about Europe’s deepening debt crisis, driving investors out of riskier assets. Moreover, Taiwan Weighted crashed about three percent hit by a regional sell-off on fears of a global economic downturn, and by concerns about a planned capital gains tax plan.