Post session - Quick review

After managing to eke out slender gains in the previous session, Indian equity markets ran out of fuel on the last trading session of the week, as investors were reluctant to carry over their positions, going forward in the F&O expiry week, which will be high in terms of volatility. However, parliament impasse over on coal block issue, where BJP stuck to its stand of demanding resignation from Prime Minister Manmohan Singh, also prompted market-men to book their profits. Further, even negative global set up, which mainly triggered the risk off sentiment, could be mainly blamed for the bourses’ blues. 50 share barometer index, Sensex, after holding on to its 5400 bastion for previous three trading session, finally lost the level and settled with a cut of close to 0.50%.  Meanwhile, the 30 share barometer index, Sensex, too surrendered over quarter of percentage to shut shop sub 17800 level. Meanwhile, broader indices went home with huger loss, as both Midcap and SmallCap index lost over 0.50%. For the holiday truncated week, bourses registered fourth week of gains, where both Sensex and Nifty ended with gains of over 0.35%. However, trend was exceptional broader indices, as both Midcap and SmallCap index lost over 0.50% for the week too.

On the global front, Asian shares ended down in dumps on Friday as hopes for a strong policy action from the U.S. Federal Reserve faded and disappointing economic reports on China and the euro zone revived concerns over the faltering global economy. Meanwhile, nervousness of market participants head of key meetings of Greece's prime minister with France and Germany, weighed on European equities.

Closer home, bout of weakness came in from the stocks belonging from Rate sensitives, viz, Realty, Bankex, following suit were Power and Capital Goods counters. Rate sensitive’s counter, especially banking, tottered under pressure, after Reserve Bank of India (RBI), pouring cold water on the hopes of rate cuts in upcoming mid-quarterly monetary policy review, in its Annual Report 2011-12’, stated that “lower interest rates alone are unlikely to jump-start the investment cycle”.  Meanwhile, Auto shares, too ran out of the fuel in early deals after Oil Ministry sought additional duty on diesel cars. The Ministry has sought Rs 1.70 lakh additional duty on small diesel cars and Rs 2.55 lakh on medium and large cars, averring that the huge difference of Rs 27.14 a litre between the price of petrol and diesel had led to an abnormal growth of diesel car.

Additionally, metal stocks too extended loss for second consecutive session after data released on Thursday, 23 August 2012, highlighted that China's factory activity in August shrank at its fastest pace in nine months. China is the World's largest consumer of copper and aluminum. Moreover, shares of power generation firms fell across the board. GMR Infrastructure, Lanco Infratech, JSW Energy, Reliance Power, Adani Power, Tata Power Company, GVK Power Infrastructure, NTPC and Reliance Infrastructure shed by between 0.45% to 3.82%. On the flip side, defensive buying in Fast Moving Consumer Goods and Health Care counters, slug hard to limit the downside of the bourses, leading to yet another day of consolidation, but this time around with negative bias. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1209:1612 while 145 scrips remained unchanged (Provisional).  Meanwhile, trade of over 1.85 lac crore, was done in terms of volume turnover (Provisional)

The BSE Sensex lost 55.08 points or 0.31% and settled at 17,795.14. The index touched a high and a low of 17,822.50 and 17,725.42 respectively. 14 stocks were seen advancing against 16 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.57% while Small-cap index was down 0.71%. (Provisional)

On the BSE Sectoral front, FMCG up 0.41%, Health Care up 0.27% and Auto up 0.07% were the only gainers, while Realty down 2.37%, Bankex down 1.15%, Power down 0.67%, Capital Goods down 0.63% and Metal down 0.48% were the top losers in the space.

The top gainers on the Sensex were ONGC up 2.18%, Coal India up 2.12%, Sterlite Industries up 0.90%, Maruti Suzuki up 0.86% and Cipla up 0.77% while, Tata Steel down 2.77%, Jindal Steel down 2.46%, Hindalco Industries down 1.90%, ICICI Bank down 1.84% and NTPC down 1.26% were the top losers in the index. (Provisional)

Meanwhile, pouring cold water on the hopes of rate cuts in upcoming mid-quarterly monetary policy review, the Reserve Bank of India (RBI), in its ‘Annual Report for 2011-12’, a review of the previous fiscal year's macroeconomic conditions and outlook for the current year, stated that “Lower interest rates alone are unlikely to jump-start the investment cycle”. Underscoring that fighting inflation remained the cornerstone of its monetary policy, even in light of sagging economic growth, India’s most aggressive central bank, urged the government to cut expenditure and revive capital expenditure to crowd-in private investment, stating the limited fiscal and monetary space it had to provide direct stimulus to growth.

The Reserve Bank of India, for 2012-13, is expecting the growth to remain below trend at around the previous year’s level of 6.5 per cent. India's growth has hobbled to a nine-year low of 5.3 percent in the March quarter, with many economists slashing their 2012/13 estimates to around 5.5 percent, lower than the RBI's downwardly revised projection of 6.5 percent. Further blearing this outlook, RBI highlighted that newer uncertainties for growth have emerged from unsatisfactory monsoon so far, which is likely to result in contraction in food grains output in 2012-13.

Meanwhile, blaming emergence of twin deficits, fiscal and trade, during 2011-12 a major cause of macro-economic weakness, current assessment of the Apex Bank suggested that the two demons would the keep their heads tall in 2012-13 in the absence of sufficient policy response and no improvement in business cycle conditions. “With growth remaining slow, budgetary targets are at risk. Shortfall in indirect tax revenue, decline in corporate earnings, difficulties with disinvestment and expenditure overshooting due to under-provision of petroleum subsidies are likely to put fiscal position under pressure,’’ the report said.

India VIX, a gauge for markets short term expectation of volatility gained 0.24% at 16.16 from its previous close of 16.12 on Thursday. (Provisional)

The S&P CNX Nifty lost 24.95 points or 0.46% to settle at 5,390.40. The index touched high and low of 5,399.65 and 5,371.00 respectively. 17 stocks advanced against 33 declining ones on the index. (Provisional)

The top gainers on the Nifty were ONGC up 2.13%, Coal India up 2.09%, BPCL up 1.20%, Maruti Suzuki up 1.00% and Sesa Goa was up 0.95%. On the other hand, Reliance Infrastructure down 3.01%, DLF down 2.92%, JP Associates down 2.91%, Jindal Steel down 2.78% and Tata Steel down 2.77% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.27%, Germany's DAX down 0.22% and Britain’s FTSE 100 down 0.03%.

Asian markets retreated from a two-week high and ended with red mark on Friday as investors trimmed down their expectations on disappointing weak economic indicators from the United States, China and Europe which offset hopes for more stimulus from central banks. Meanwhile, Hong Kong closed lower on Friday, as the investors digested earnings from large Chinese companies, while in Tokyo, the Nikkei tumbled amid global growth fears and ahead of a speech by Bank of Japan Governor Masaaki Shirakawa.