Post session - Quick review

A session after showcasing spectacular rally, Indian equity markets got pummeled in today’s trading session as jitteriness ahead of crucial events kept investors on periphery. Marketmen were reluctant to open fresh position ahead of the earnings announcement of IT major Infosys and Tata Consultancy Service (TCS) on July 12, which would officially kick start the first quarter earnings season of the current fiscal.  Some sense of caution was also drawn ahead of the release of India’s industrial output, which is estimated to have accelerated by a modest pace in May on an annual basis from barely any growth in April’s 0.1% figure. Drag of index heavyweights such as Reliance Industries, Wipro, ITC, mainly activated the snoring bears. Meanwhile, lack of positive surprises by home loan major giant HDFC in its Q1 earning, also added to the downside triggers for the markets. HDFC shares lost over half a percentage points despite reporting expected earnings. Non-banking finance company registered 19% rise in April-June quarter net profit at Rs 1001.91 crore as compared to Rs 844.50 crore in the similar quarter a period ago.

The barometer gauges, lacking any significant upside trigger, listlessly gyrated in the negative terrain for the entire trading session, only to finish near intra-day’s low. 30 scrip sensitive barometer index of Bombay Stock Exchange (BSE)-Sensex- after ending past 17600 in the previous session, offloaded over a century of points, to shut shop below the 17500 bastion. Similarly, the widely followed index of National Stock Exchange (NSE) - Nifty- after getting battered over a half a percentage points, concluded near the 5300 level. The broader indices too succumbed to selling pressure, as both Midcap and Smallcap index, went home with loss of over 0.15%.

On the global front, Asian pacific shares after dilly-dallying for the entire trading session, managed to showcase some recovery by the end of the trade even as market remained unconvinced about the euro zone, decisively bringing down struggling member states' borrowing costs. Meanwhile, European shares wilted under pressure after profit warnings from US companies that compounded fears that the sluggish global economy will erode earnings, ate into investor’s risk appetite. The US future indices too indicated a green start of Wall Street.

Closer home, stocks from Capital Goods counters only showcased resilience as rest 12 sectoral indices languished in the red terrain; prominent losers among them were stocks from rate sensitive Realty, Auto and high beta Metal pivotal. Positive updates on Monsoon limited the losses of the bourses to some extent, as Indian Meteorological Department reported that rainfall deficit over the past week dwindled to 23%, a sign that monsoon has revived. Meanwhille, appreciation of Rupee too curbed the downfall. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1190:1637 while 113 scrips remained unchanged. (Provisional)

The BSE Sensex lost 134.46 points or 0.76% and settled at 17,483.89. The index touched a high and a low of 17,582.99 and 17,466.99 respectively. 3 stocks were seen advancing against 26 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index lost 0.17% while Small-cap index was down 0.28%. (Provisional)

On the BSE Sectoral front, Capital Goods up 0.29% was the sole gainer while, Realty down 1.24%, Auto down 1.21%, Metal down 1.12%, Oil & Gas down 1.03% and FMCG down 1.03% were the top losers.

The top gainers on the Sensex were L&T up 1.18%, HDFC Bank up 0.25% and NTPC up 0.25% while, Hindalco Industries down 2.94%, Wipro down 2.22%, Tata Motors down 2.11%, Reliance Industries down 1.94% and Sterlite Industries down 1.94% were the top losers in the index. (Provisional)

Meanwhile, the much deferred Empowered Group of Ministers (EGoM) meet on Telecom will be held on July 12 to decide on the controversial issue of spectrum pricing. Crucial aspects like pricing of spectrum, one-time fee, roll-out obligations, terms of payment and the timeline for selecting the auctioneer, will be taken on board for discussion, by the EGoM under the chairmanship of Union Home Minister P Chidambaram who was asked to head the EGoM on spectrum auction after Agriculture Minister Sharad Pawar declined the job, apprehending controversy.

With the industry crying foul, the Telecom Regulatory Authority of India (TRAI), the sector regulator, proposed a near 10-fold rise in the auction’s starting price compared to what carriers paid in 2008. The regulator recommended 2G spectrum reserve price at Rs 3,622 crore per unit of spectrum in the 1800 MHz band, which translates to an amount of over Rs 18,000 crore for pan-India license, i.e. 13x of current base price of 2G and equivalent to 3G spectrum cost, where radio airwaves were vacated following the Supreme Court’s verdict on February 2 cancelling all the 122 spectrum licenses allotted in 2008 during the tenure of the former telecom minister A Raja. 

Importantly, the issue on the one-time fee to be paid by the incumbent players, which does not augurs well with the Finance Ministry and the Planning Commission, too would be discussed upon.  Towards this development, Department of Telecom (DoT) in a move aimed at making the playing field level, wants to charge all operators a fee for the entire spectrum they hold.

Meanwhile, the EGoM is also expected to approve a new deadline for the auction process as well. Making the deadline date of August 31 set by Supreme Court, unattainable, the Department of Telecom (DoT) for the second time extended the timeline for receiving bids from companies for the auctioneer’s job to July 20 instead of the earlier date of July 5, which in turn implies that the all important information memorandum detailing the auction guidelines will now only be issued on August 22 instead of August 6, 2012.

India VIX, a gauge for market’s short term expectation of volatility gained 3.14% at 18.39 from its previous close of 17.83 on Tuesday. (Provisional)

The S&P CNX Nifty lost 40.40 points or 0.76% to settle at 5,304.95. The index touched high and low of 5,336.45 and 5,300.25 respectively. 8 stocks advanced against 42 declining ones on the index. (Provisional)

The top gainers on the Nifty were Kotak Bank up 1.34%, L&T up 1.32%, BPCL up 1.04%, Bank of Baroda up 0.71% and Power Grid up 0.66%. On the other hand, Hindalco Industries down 3.25%, Reliance Infrastructure down 2.59%, Wipro down 2.21%, Tata Motors down 2.19% and Siemens down 2.13% were the top losers. (Provisional)

The European markets were trading mixed, with France's CAC 40 down 0.63%, Germany's DAX up 0.03% and Britain’s FTSE 100 down 0.40%.

Most of the Asian markets closed in green on Wednesday as it went up in the latter part of the day from the bearish zone offsetting some of the earlier losses, due to fall in US indices and concerned about Italy’s financial problem which sparked fresh fear in investors mind. The stocks had plunged to new low after Germany delayed to launch a permanent bailout fund to rescue debt ridden euro zone.

Nikkei fell to two weeks low and Kospi Composite Index continued to lose its market value for fourth consecutive day of trading. While Shanghai Composite ended its day’s trade on a positive note after making loses in two of its consecutive sessions; cement coal and machinery shares made gains on the hopes of government led-investments as China seek to boost its declining economic growth. Hang Seng Index after starting in red, due to slide in US markets adding to worries related to Europe and China will Bank and property developers taking the hit, managed to shut in green.