Post session - Quick review

Five months low Inflation data failed to turn corner for Indian equity markets, which started the fresh week, on awful note, as monsoon worries and depreciating rupee, fizzled the early Euphoria seen on possible rate cut hopes. The wholesale price index (WPI), India's main inflation gauge, despite coming at five months low of 7.25 percent for the month of June as compared to 7.55% (Provisional) for the previous month, emerged as damp squib.

30 scrip sensitive index Sensex, losing over century points, shut below the psychological 17100 level, while the widely followed index, Nifty, losing over quarter percent, ended below the 5250 bastion. The trade was no different for broader indices, however, the losses incurred by Smallcap and Midcap index, were limited to magnitude of 0.50%.

Bourses, managed to gyrate in green territory in the first half of the session, however, trade after that was complete wash-out, as investor’s growing cautious of the split views on a potential rate cut at the Reserve Bank of India policy review on July 31, slashed position in risky assets class such as equities. Further, Monsoon qualms also triggered sell-off into equity markets, as investors cashed their profit on reports, which stated that Monsoon deficit was still at 22%.

Bleak European leads also led to much of the distortion, European shares wilted under pressure as investors worried the European Central Bank had changed its stance on how some bondholders could be treated under Spain's bank bailout, with second-quarter earnings season sparking fresh signs that the euro zone crisis is hurting profit. On the flip side, Asian pacific shares pulled off well through the session as fears of an economic hard landing in China subsided, however, fears of profit warnings dented gains in Chinese, Tiwan and Singapore shares, highlighting the impact of the country's slowdown on local and multinational firms.

Closer home, stocks from Health Care, Consumer Durable and Oil & Gas counters, capped the downside of the bourses while stocks from IT, Metal and Realty emerged as the major pockets of weakness. Sector wise, Sugar stocks depicted a jubilant run on reports the Food Ministry has proposed imposing 10% import duty on sugar. Stocks of Shree Renuka Sugar, Rana Sugars, Sakthi Sugars and Balrampur Chini Mills all rallied in the range of 1-2%.  The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1177:1642 while 114 scrips remained unchanged. (Provisional)

The BSE Sensex lost 116.72 points or 0.68% to settle at 17,096.98. The index touched a high and a low of 17,282.30 and 17,079.63 respectively. 10 stocks were seen advancing against 20 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.69% while Small-cap index was down 0.68%. (Provisional)

On the BSE Sectoral front, Health Care up 1.03%, Consumer Durable up 0.78% and Oil & Gas up 0.10% were the only gainers while, IT down 2.59%, Metal down 2.10%, Realty down 1.92%, TECk down 1.48% and Power down 1.07% were the top losers.

The top gainers on the Sensex were Bharti Airtel up 3.83%, Dr. Reddy’s Lab up 1.81%, Maruti Suzuki up 1.38%, Cipla up 1.22% and Sun Pharma up 1.01% while, Tata Steel down 4.29%, TCS down 3.57%, Tata Motors down 2.85%, Jindal Steel down 2.85% and Infosys down 2.68% were the top losers in the index. (Provisional)

Meanwhile, Offering some relief to Reserve Bank of India (RBI), the wholesale price index (WPI), India's main inflation gauge, rose at surprisingly lower-than-expected 7.25 percent for the month of June, as compared to 7.55% (Provisional) for the previous month and 9.51 percent during the corresponding month of the previous year.

The much awaited figure, was also way below than the consensus estimates of 7.60 percent. Meanwhile, build up inflation in the financial year so far was reported at 1.99 percent as compared to a build-up of 2.41 percent in the corresponding period of the previous year. However, April month’s inflation figure was revised sharply higher from 7.23 percent to 7.50 percent.

The index for primary articles group, which has a weightage of 20.12 percent in overall WPI, rose 0.1 percent to 216.4 from 216.1 for the previous month, largely because of 1.4 percent jump in index of ‘Food Articles’.

The index for ‘Food Articles’ group rising to 209.2 from 206.3 for the previous month continued to drive the headline numbers.  Meanwhile, the index for ‘Non-Food Articles’ group declined by 2.6 percent to 193.5 (Provisional) from 198.6 (Provisional) for the previous month.

The index for fuel and power group with a weightage of 14.91percent in WPI too declined by 0.4 percent to 178.2 from 178.9 due to lower prices of  light diesel oil (7percent), aviation turbine fuel and furnace oil (6 percent each) and naphtha (4 percent).  However, the prices of petrol (7 percent) moved up. Meanwhile, the index for Manufactured Products, which carries weight of almost 65 percent in the WPI, rose by 0.5 percent to 144.3 from 143.6 for the previous month.

Although the numbers have come lower than expectation but still remains above the comfort level of the RBI. The connoisseur are of the beliefs that lower than expected numbers would cast no impact on World’s most aggressive Central bank’s anti-inflationary stance during its next mid-quarterly policy review on July 31. RBI, like previous Mid-Quarterly policy review, this time around also is expected to maintain its status Quo on key policy rates.

India VIX, a gauge for market’s short term expectation of volatility gained 2.79% at 18.77 from its previous close of 18.26 on Friday. (Provisional)

The S&P CNX Nifty lost 33.25 points or 0.64% to settle at 5,194.00. The index touched high and low of 5,246.85 and 5,190.45 respectively. 18 stocks advanced against 32 declining ones on the index. (Provisional)

The top gainers on the Nifty were Hero Bharti Airtel up 3.80%, Maruti Suzuki up 1.73%, Dr. Reddy’s Lab up 1.72%, Axis Bank up 1.35% and Bank of Baroda up 1.29%. On the other hand, Tata Steel down 4.26%, TCS down 3.69%, Tata Motors down 3.03%, Jindal Steel down 2.91% and Reliance Infrastructure down 2.84% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.20%, Germany's DAX down 0.18% and Britain’s FTSE 100 down 0.20%.

Asian stock markets ended mostly higher on Monday amid hopes of further stimulus measures from China after Premier Wen Jiabao warned Sunday that the recovery in the world’s second largest economy was not stable. Markets opened on a positive note on Monday, tracking positive cues from the rally of Wall Street on Friday. Meanwhile, euro and oil dropped ahead of inflation and confidence reports in Europe.

However, strong gains in Australia due to mining stocks rally supported the markets in good way, while China slid close to a six-month low on warnings over its economy. Investors are waiting for the trigger from Federal Reserve Chairman Ben Bernanke's testimony to Congress on Tuesday, which will be scrutinized to see whether the US central bank will introduce easing to stimulate the economy.

The Japanese market remained closed on Monday for a public holiday.