Post session - Quick review

Indian equity markets ended in raptures on the penultimate day of June month’s F&O expiry, as local barometer gauges added onto previous session’s gains after trader’s apparently rolled over their position to next month F&O series. Increased buying by funds and retail investors amid covering-up of short positions by speculators spurred gains at Dalal Street. However, even sanguine global leads, triggered buying in home markets. The 30 scrip sensitive index, Sensex, after accumulating gains of over 0.25%, ended above the 19650 mark, while the widely followed 50 share index, Nifty, concluded above the 5100 psychological mark. The broader indices, also delivered performance at par with the frontline indices, Midcap and Smallcap index, added over 0.25% in their kitty.

On the global front, Asian pacific shares snapped a four- days losing streak as speculation that China may step up economic stimulus tempered concern that the 19th summit on Europe’s debt crisis in three years won’t result in progress toward a resolution. A report showing that U.S. home prices rose 1.3% in April, indicating an uptick a sector closely tied to the health of the overall economy, not only helped send Wall Street higher on Tuesday, but also aided regional counterparts in capturing gains. Meanwhile, European shares too managed a slight uptick after three days of losses.

Closer home, sentiments were bolstered early in trade on rally of power utility firms, viz, Reliance Infrastructure and Tata Power after the Delhi Electricity Regulatory Commission (DERC) approved a steep tariff hike for power distributed by power utility firm in the national capital. Tariff for domestic consumption has been hiked by 24%, while commercial power tariff will be higher by 19.5%. In the second line shares, sugar stocks were on buyers' radar. Bajaj Hindusthan, Balrampur Chini, Dhampur Sugar and Shree Renuka shot up 1.5-4%. State-owned non-banking finance companies like PFC, REC and PTC India gained 2% each.

In stock specific action, Reliance Industries gained 0.6% in early deals after the oil & gas major demanded tripling of its KG-D6 gas price from April 1, 2014, after the current below-market rate of $4.205 per mmBtu expires. Meanwhile, Kingfisher lost over 8% after reports surfaced that lessors have taken back 34 aircrafts of the company as it has failed to pay Rs 1000 crore lease rentals. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1454:1302 while 151 scrips remained unchanged. (Provisional)

The BSE Sensex gained 52.47 points or 0.31% and settled at 16,959.05. The index touched a high and a low of 17,029.27 and 16,930.80 respectively. 23 stocks were seen advancing against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.35% while Small-cap index was up 0.29%. (Provisional)

On the BSE Sectoral front, Metal up 1.48%, Power up 1.05%, IT up 0.75%, TECk up 0.62% and Health Care up 0.52% were the top gainers while, Auto down 0.71% and Consumer durables down 0.70% were the only losers. (Provisional)

The top gainers on the Sensex were Tata Steel up 2.46%, Tata Power up 2.41%, Sterlite Industries up 1.74%, Hindalco Industries up 1.26% and Infosys up 1.04% while, Tata Motors down 3.12%, Bharti Airtel down 0.42%, Wipro down 0.31%, SBI down 0.19% and Jindal Steel down 0.08% were the top losers in the index. (Provisional)

Meanwhile, the revenue growth of leading companies is expected to be the weakest quarterly numbers since past 6-quarters, as per the credit rating agency - CRISIL. Higher interest cost and declining sales is likely to impact the revenue growth of 15 out of 26 sectors in the current quarter. The report is based on the analysis of collective financial performance of 247 large companies across 26 key sectors, apart from banks and oil & gas companies and makes up around 65% of the BSE 500 Index.

As per the report, revenue growth in the first quarter of 2012-13 is estimated to decline to about 14% from 17% recorded a year ago. EBIDTA (earnings before interest, taxes, depreciation and amortization) margins are forecasted to drop by 1-1.5 percentage points on year-on-year (y-o-y) basis, however, will remain flat on a quarter-on-quarter (q-o-q) basis.  The revenue growth in first quarter of 2012-13 is expected to be much weaker due to a sharp deceleration in airlines, auto components, commercial vehicles, hotels, metals, organized retail, real estate and textiles.

Sectors like commercial vehicles, cement, construction, and real estate are likely to see EBIDTA margins contract by 100-200 basis points on q-o-q basis, mainly on the back of high input cost and slow demand. On the other hand, export-oriented sectors like IT services and pharma are expected to witness strong growth due to rupee depreciation. Similarly, telecom sector is also likely to witness a modest expansion in margins on account of lower competition along with cost control measures adopted by the companies.

Poor investment scenario, policy paralysis and higher cost of capital along with rising inflation and lending rates and slowing FY12 fourth quarter economic growth have severely impacted the investment cycle and thereby the consumer sentiment. Further, as per CRISIL, ‘demand growth will continue to remain weak going forward, as interest rates are likely to remain high for longer than anticipated. The deceleration in fixed capital investments growth may lead to further slowing of consumption demand.’

India VIX, a gauge for market’s short term expectation of volatility gained 0.69% at 20.37 from its previous close of 20.23 on Tuesday. (Provisional)

The S&P CNX Nifty gained 22.25 points or 0.43% to settle at 5,143.05. The index touched high and low of 5,160.10 and 5,129.25 respectively. 36 stocks advanced against 14 declining ones on the index. (Provisional)

The top gainers on the Nifty were Sesa Goa up 3.71%, IDFC up 3.64%, Tata Steel up 2.51%, Tata Power up 2.35% and Reliance Infrastructure up 1.99%.On the other hand, Tata Motors down 3.22%, Kotak Bank down 1.58%, Cairn India down 1.29%, ACC down 1.25% and JP Associates down 0.57% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.30%, Germany's DAX up 0.08% and Britain’s FTSE 100 up 0.32%.

Most of the Asian market ended in green today after four days of losing streak due to overnight up move in the US market but gains were reduced as doubt over the upcoming Euro Summit that the world leaders will not be able to tackle the crisis effectively.

Nikkei today rose after three days of incurring losses as investors bought shares of construction and real estate sector on the expectation that this share price will rise ahead of the sales tax increase in 2014. Shares in Hang Seng fluctuated in narrow range as decline in Chinese resource and banking centre was countered with buying shares in mainland property and consumer firm. Jakarta Composite rose for the second day due to gains in stocks of banking sector as Indonesian largest bank rose 1.4 percent and is planning to expand its business in Myanmar, Vietnam and Thailand. Shanghai Composite closed today down by 0.2 percent for the 6th consecutive day. Strait Times gained 1.1 percent after falling for the past four days as countries big and small cap stocks rose. Kospi fell due to loss incurred by the country’s biggest blue chip company Samsung Electronics.