Post session - Quick review

Local stocks markets were again caught into the sea of red as flustered investors continued to flee stocks over the mounting concerns about the health of European banks and France’s debt rating. Local bourses much in line with the expectation resumed the downward trajectory after taking a breather from six day’s slide in the previous session. Besides, daunting global set up, development on domestic front were also quite nerve-racking for the investor’s in today’s trading session as prolonging the previous week's uptrend, India’s food inflation measured by Wholesale Price Index (WPI) spiked up at 4-1/2-month high of 9.90% for the week ended July 30 from 8.04% in the last week. Meanwhile, the index for Fuel & Power group which has the weightage of 14.91% in WPI rose by 0.1% to 165.7 (Provisional) from 165.6 for the previous week. Local equity markets also failed to derive some sense of comfort from the report stating the exports in July surged over 80%, as top official warning of bleak global economic outlook preventing the sector from achieving its annual growth target graved the sentiment. India's exports grew at a record 37.6 percent to $246 billion in the 2010-11 fiscal year as Asia's third-largest economy pulled away from the 2008 global financial crisis-led slowdown and set its sights on developing new export markets in the emerging world.

On the global front, Dow Jones industrial average closed down 519 points, with selling largely spurred by worries that debt problems in Europe might reach the United States. Meanwhile, initial optimism in the Asian markets got washed away as daunting global development deterred market men from indulging in value picking.  The European shares rebounded from two year’s closing low after bargain hunting in Asia helped cut losses, and with miners set to rise on higher metals prices after strong Chinese trade data. 

Back home, the session at Dalal Street was immensely volatile as the benchmark flip flopped between the red and green. Though the benchmarks strongly rebounded from their lows in the early deals as investor’s gaining some confidence from the positive opening of the European markets circled back into equities on attractive valuations. But the caution again popped up at Dalal Street, thereby letting the investor’s slashing their positions and sending the bourses closer to their day’s low. On the result front, Hotel Lela ventures tanked over 6% after the company reported net loss of Rs 26.49 crore for the first quarter ended June 30, 2011 against net profit of Rs 9.24 crore for the same quarter last year. Meanwhile, the stocks of Apollo Tyres sank 5.22% after company’s consolidated net profit rose marginally by 3.95% at Rs 77.13 crore as compared to Rs 74.19 crore for the quarter ended June 30, 2010.

However, on the flip side, Reliance Infrastructure rose over 2% after company’s Q1 net profit beat the forecast as income from its road and rail business soared on the back of infrastructure investment. On consolidated basis, the Group has posted a rise of 8.02% in its net profit after tax, share in associates and Minority Interest at Rs 405.39 crore as compared to Rs 375.29 crore for the quarter ended June 30, 2010. Meanwhile, Shree Renuka Sugars too captured gains of over 3% after the company reported stellar Q3 numbers. The company’s consolidated profit grew by 107.32% at Rs 187.00 crore as compared to Rs 90.20 crore for the quarter ended June 30, 2010.

The 30 scrip sensitive index-Sensex-after piercing through the 17200 mark, finally settled a little above the 17000 level with a loss of over 50 points. Meanwhile, the 50 share index on Nifty-NSE- settled above its 5100 level with a loss of over 15 points. However, the broader indices trimming their losses ended with a cut of over 0.15%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1319:1471 while 140 scrips remained unchanged.

The BSE Sensex lost 79.93 points or 0.47% and settled at 17,050.58. The index touched a high and a low of 17,207.82 and 17,012.95 respectively. 6 stocks advanced against 23 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index lost 0.19% while Small-cap index was down by 0.26%. (Provisional)

On the BSE Sectoral front, FMCG up 0.04% was the only gainer.

On the flip side, Bankex down 1.11%, Consumer Durables down 0.97%, Realty down 0.92%, TECk down 0.90% and Capital Good down 0.75% and Oil & Gas down 0.42% were the top losers.

The gainer on the Sensex was HDFC up 2.49%, NTPC up 1.40%, Coal India up 1.15%, Hindalco up 0.96% and ITC up 0.51%. (Provisional)On the flip side, Tata Power down 4.60%, Maruti Suzuki down 2.99%, Jindal Steel down 2.54%, Bharti Airtel down 2.45% and ICICI Bank down 2.10% were the top loser on the index. (Provisional)

Meanwhile, prolonging the previous week's uptrend, India’s food inflation measured by Wholesale Price Index (WPI) has spiked up at 4-1/2-month high of 9.90% for the week ended July 30 from 8.04% in the last week on the back of costlier onions, fruits, vegetables and protein-based items.

According to the data released by Ministry of Commerce and Industry, the index for Food Articles group rose by 1.6% to 195.3(Provisional)  from 192.2 for the previous week due to higher prices of fish-inland (17%), poultry chicken and fish-marine (4% each), ragi and fruits and vegetables (2% each) and rice, coffee and gram (1% each). However, the prices of egg, mutton, urad and arhar (1% each) declined.

Meanwhile, the index for 'Non-Food Articles' rose by 0.5% to 175.8 (Provisional) from 174.9 in the previous week due to higher prices of gaur seed and coir fibre (7% each), soyabean (5%), castor seed and gingelly seed (4% each), niger seed (3%), sunflower and rape and mustard seed (2% each) and copra, cotton seed and raw cotton (1% each). 

More importantly, the index for primary articles group which has the highest weightage of 20.12% in WPI rose by 1.2% for the week at 199.3 (Provisional) from 196.9 in the previous week. The annual rate of inflation, calculated on point to point basis, stood at 12.22% (Provisional) for the week ended June 30, 2011 as compared to 10.99% for the previous week ended July 23, 2011. 

Additionally, the index for Fuel & Power group which has the weightage of 14.91% in WPI rose by 0.1% to 165.7 (Provisional) from 165.6 for the previous week due to higher prices of lubricants (2%). Meanwhile, the annual rate of inflation, calculated on point to point basis, stood at 12.19% (Provisional) for the week as compared to 12.12% for the previous week.

The latest numbers are likely to put further pressure on the government and the Reserve Bank, who have been battling the high rate of price rise over a period of one-and-a-half years. Further to add on to the pressure, this is the highest rate of price rise in food items since the week ended March 12, when food inflation stood at 10.05%. India’s central bank so far has raised interest rates 11 times since March 2010 to tame headline inflation, which quickened to 9.44% in June.

Also, in its Economic Outlook for 2011-12 released earlier this month, the Prime Minister's Economic Advisory Council projected headline inflation to remain high at around 9% till October. He said that the rate of price rise will ease from November, declining to around 6.5% by March 2012. However, the report also stated that while pressure from food inflation has fallen in recent months, the rate of price rice still remains quite high, with the possibility of a further surge in coming months.India VIX, a gauge for market’s short term expectation of volatility gain 0.48% at 29.09 from its previous close of 28.95 on Wednesday. (Provisional)The S&P CNX Nifty lost 27.65 points or 0.54% to settle at 5,133.35. The index touched high and low of 5,184.95 and 5,121.00 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were HDFC up 2.68%, Reliance Infra up 2.65%, Reliance Capital up 2.42%, Kotak Bank up 2.16% and NTPC up 1.31. (Provisional)

On the other hand, Tata Power down 4.60%, Axis Bank down 3.05%, Maruti Suzuki down 2.95%, Bharti Airtel down 2.91% and BHEL down 2.27% were the top losers. (Provisional)

The European markets are trading in mix, with the France's CAC 40 down 0.39%, Germany's DAX up 0.37% and FTSE 100 up 0.20%.

Most of the Asian equity indices finished the day’s trade in the negative terrain on Thursday but closed off their early lows as bargain buyers circled back into equities on attractive valuations. Initially, the regional markets took a hit on opening after Wall Street slumped overnight -- with each of the three main indexes losing more than four percent -- while the sentiments also remained dampened after European woes reignited on Wednesday when rumours circulated that France was in danger of seeing its top-notch credit downgraded, following last week’s historic cut to the United States’ rating. Moreover, Singapore shares fell by midday on Thursday, weighed by oil rig builders on continuing worries about demand however, South Korean index Seoul Composite reversed course to close up by over half a percent after opening four percent lower in the trade, helped by steady institutional and pension fund buying.