Post session - Quick review

What started as a promising start to the June series futures and options (F&O) contract expiry week, turned out be nothing sort of disappointment for investors’ at Dalal Street after government fell short on announcing reforms for stimulating the faltering rupee and the economy. The move of hiking external commercial borrowing (ECB) norms, upping FII investment cap in corporate bonds up to $ 20 billion, did not auger well for the investor’s who were expecting more aggressive steps from Reserve Bank of India, which maintained a status quo on key policy rates in its last Mid-quarterly policy review on June 18, 2012. Meanwhile, announced reforms also did not do much for the staggering Indian currency, which after rebounding sub ‘56.40/$’ psychological level, depreciated again in proximity to its record low level. Benchmark indices shrugging off the all the early gains, took a nasty laceration of over 0.50 percentage points each. The 30 scrip sensitive index, Sensex, on BSE knocked off over a century of points to shut shop sub 16900 level. Similarly, the widely followed index, Nifty, too after appearing increasingly close to the 5200 level, settled around the 5100 bastion. The broader indices, meanwhile, exhibited mixed trend.

Gloomy global leads also underpinned investor’s to go easy on the risky bets, further squaring off June month’s F&O series position, too spurred pessimism into Indian equity markets. Asian pacific shares ended in jitters as concerns about faltering global growth and Europe's intractable debt crisis continued to dampen investor confidence. Additionally, European shares declined for the third day as investors looked ahead to the meeting of EU leaders in Brussels on Thursday.

Closer home, selling witnessed was broad based, as Consumer Durable index, managed to evade out with gains of over 0.15%, while, stocks from  Bankex, Power and  Public Sector Undertaking counters, were the prominent losers. Early in trade, bourses were jaunty as investor’s drew some sense of relief after Moody’s Investors Service said it is maintaining a stable outlook on India's sovereign credit rating. It averred that credit challenges such as weak fiscal performance, inflationary trends and uncertain investment policy environment have been part of the Indian economy for decades and were therefore previously factored into India’s current Baa3 rating. On the flip side, stocks from the retail sector concluded on a positive note amid growing speculations that the narrowing window of opportunity to act will likely force the government to undertake some long-overdue economic reforms like implementing FDI in multi-brand retail within the next three to six months. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1431:1321 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex lost 112.48 points or 0.66% and settled at 16,860.03. The index touched a high and a low of 17,131.15 and 16,853.05 respectively. 7 stocks were seen advancing against 23 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.05% while Small-cap index was up 0.19%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 0.13% was the sole gainer while, Bankex down 1.23%, Power down 1.06%, Metal down 0.96%, Realty down 0.95% and PSU down 0.92% were the top losers. (Provisional)

The top gainers on the Sensex were GAIL India up 0.95%, Reliance Industries up 0.87%, Maruti Suzuki up 0.76%, HDFC up 0.51% and Dr. Reddy’s Lab up 0.24% while, Hero MotoCorp down 2.80%, Hindalco Industries down 2.30%, Cipla down 2.28%, SBI down 2.21% and ONGC down 2.09% were the top losers in the index. (Provisional)

Meanwhile, Global rating agency, Moody’s Investor Services has maintained a ‘Stable’ outlook on India’s sovereign debt rating of Baa3 in spite of problems such as high inflation, slowing economic growth, weak fiscal performance and feeble investment scenario, which are hurting the economic growth of the country. The global rating agency, however, voiced its concern by stating that the global and domestic factors coupled with low agricultural production could negatively impact India’s growth and keep it below trends in the next few quarters.

At the same time, Moody’s said the negative trends like low growth and slowing investment will neither be permanent nor will it be there in the medium term features of the Indian economy. Although the impact of India’s lower growth and high inflation will deteriorate the credit metrics in the short term but it will not become irreconcilable with India’s current rating.

The rating agency’s decision will give the government a much needed relief as it has come in the face of a cut in outlook from Fitch from ‘stable’ to ‘negative’.  While, Standard and Poor's warning that India could become the first ‘fallen angel’ among the BRIC countries, if it lost its investment grade rating, mainly on the back of slowing GDP growth and political roadblocks in policymaking.

India’s widening fiscal deficit has sharply increased its current account deficit and has sent the rupee to its fresh all time lows against the dollar. Moody’s also highlighted that India’s limited foreign currency debt will protect the government from any external increase in its debt burden due to sharp fall in rupee.

India’s economic growth slowed to 6.5% in 2011-12, while growth for the March quarter registered 5.3%, the lowest in 9-years. Further, the fiscal deficit for the current financial has been pegged at 5.1% of GDP, after having climbed to 5.9% in FY-12 from a estimated 4.6%.

India VIX, a gauge for market’s short term expectation of volatility gained 4.81% at 21.57 from its previous close of 20.58 on Friday. (Provisional)

The S&P CNX Nifty lost 34.70 points or 0.67% to settle at 5,111.35. The index touched high and low of 5,194.60 and 5,105.65 respectively. 11 stocks advanced against 38 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Cairn India up 1.27%, GAIL India up 1.13%, Reliance Industries up 0.79%, Maruti Suzuki up 0.77% and Ambuja Cement up 0.72%.On the other hand, Hero MotoCorp down 3.07%, Cipla down 2.47%, Siemens down 2.35%, Power Grid down 2.32% and JP Associates down 2.31% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.82%, Germany's DAX down 1.40% and Britain’s FTSE 100 down 0.84%.

All the Asian markets ended day’s trade in negative territory due to low global growth prospect  and increasing tension of the Euro zone debt crisis that is spreading across  southern Europe. The demand for the US dollar raised against the other major currencies as investor’s rushed to invest their money in the safe heaven. Demand for Commodities increased as oil, grain and corn outperform.

The MSCI across the Asia Pacific fell to 0.6 percent MSCIs broadest index of Asia-Pacific shares outside Japan fell 0.6 percent, while Kospi losing more than 1 percent .Mainland China's Shanghai Composite Index fell as did benchmarks in Singapore and Taiwan.

The only index in green was KLSA Composite which was up to 0.05 per cent at the time of the close.