Post session - Quick review

Dominating bears held the fort for the fourth consecutive session, as cautious undertone of global equity markets combined with faded hopes of policy reforms in the monsoon session of Parliament at home markets, did much to sap the risk appetite of already cautious investors. No respite came to the Indian equity markets for the entire trading session, which continuing its free fall settled near the low point of the day. It was complete washout session for the Dalal Street, on all fronts viz., market breadth, volume, frontline or broader indices. Choppiness remained the constant companion of the bourses on the penultimate day of F&O expiry as most of the trader’s preferred to winding up of their position ahead of release of Q1 GDP data which is expected to be around 5.5 percent for the current fiscal year.

30 share barometer index of Bombay Stock Exchange (BSE), Sensex, after offloading over massive percentage points settled below the psychological 17500 level. Meanwhile the widely followed index of National Stock Exchange (NSE), Nifty, too sliding over 50 points settled sub 5300 level for the first time since August 10. Broader indices underwent intense torment, as both Midcap and Smallcap index went home with cuts of over half a percent. Meanwhile, trade of over Rs 2.30 lac crore was done in terms of volume turnover. (Provisional)

On the global front, European shares were in a state of limbo as investors remained reluctant to open any fresh bets ahead of a key speech by the U.S. Federal Reserve chairman on Friday. However, trading remained choppy in low volume over the past week, as investors weigh up whether the European Central Bank will launch sovereign bond purchases or cut interest rates in September, and whether the U.S. Federal Reserve will hint at new quantitative easing measures at Friday's Jackson Hole gathering. Meanwhile, Asian shares, after listlessly gyrating for the entire trading session, settled on mixed note.

Closer home, weakness was mainly endorsed from the stocks belonging to Realty, Metal and Auto counters, however, stocks from Fast Moving Consumer Goods,  Health Care emerged as knight in shining armor, as the counters slug hard behind limiting the losses of the bourses.  Banking shares held up for almost entire trading session, mainly on short-covering after previous four session’s slump and also on  reports which suggested that the Reserve Bank of India (RBI) may relax some of the priority sector target for banks, but on a case-to-case basis. In a meeting with RBI Deputy Governor K C Chakrabarty on Tuesday, bankers voiced their concern on the revised priority sector lending norms that had excluded some sectors from the priority list. On the flip side, Auto stocks ran out of the fuel on concerns that sales growth in August would remain subdued on account of high interest on auto loans and rising fuel price. Prominent losers on Auto pivotal were stocks of Bajaj Auto, Hero MotoCorp and Cummins India all lost in the range of 2-3% each. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1073:1705 while 151 scrips remained unchanged. (Provisional)

The BSE Sensex lost 139.70 points or 0.79% and settled at 17,492.01. The index touched a high and a low of 17,653.90 and 17,471.13 respectively. 8 stocks were seen advancing against 22 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.51% while Small-cap index was down 0.80%. (Provisional)

On the BSE Sectoral front, FMCG up 0.63% and Health Care up 0.26% were the only gainers, while Realty down 3.10%, Metal down 1.83%, Auto down 1.31%, Oil & Gas down 1.24% and Power down 1.13% were the top losers in the space.

The top gainers on the Sensex were Tata Power up 1.53%, ITC up 0.67%, Jindal Steel up by 0.66%, Wipro up 0.52% and Maruti Suzuki up 0.29% while, Sterlite Industries down 4.74%, Bajaj Auto down 4.00%, Hero MotoCorp down 3.18%, Bharti Airtel down 3.03% and BHEL down 2.94% were the top losers in the index. (Provisional)

Meanwhile, pouring cold water on rate cut hopes yet again, Reserve Bank of India’s (RBI) Governor Duvvuri Subbarao has said that inflation remains too high and needs to fall further or risk more damage to the economy. India’s most aggressive central bank, which has been in eye of storm, for maintaining a status quo stance  in previous few monetary policy review, also added that cutting interest rates may support growth only in the short-term, while stubbornly high inflation will harm the economy in the longer term.

Apex Bank last pruned its main interest rate in April by a bigger-than-expected 50 basis points to 8 percent and since then has maintained a hold on key rates. However, Governor Duvvuri Subbarao, underscored that with this given hawkish stance, India’s central bank has been successful in lowering the inflation rate to 7 percent from 11 percent. But, further adding to anti-inflationary tone, stated that, “battle against inflation has not ended yet, as the rates needs to fall below 5%.  RBI’s governor also highlighted that various factors, including high commodity prices, the fiscal deficit and the monsoon, were adding to the upside risk of inflation.

India's main inflation gauge, wholesale price index (WPI), unexpectedly slipped at 6.87% for the month of July, its lowest since January 2010, as compared to 7.25% (Provisional) for the previous month and 9.36% during the corresponding month of the previous year.

India’s central bank, which so far preferred to battle out the inflation demon at the cost of sacrificing growth, which plunged to a decade low of 5.3% in March quarter, remains to hold this view, as the governor accepted that “some sacrifice to growth is an inevitable price” to pay in order to reduce price pressures. Meanwhile, a number of economists expect gross domestic product growth to be around 5.5 percent for the current fiscal year in India, Asia’s third-largest economy. Central Statistics Office will announce the Q1 June 2012 India GDP data on Friday 31 August 2012.

India VIX, a gauge for markets short term expectation of volatility gained 2.38% at 16.74 from its previous close of 16.35 on Tuesday. (Provisional)

The S&P CNX Nifty lost 48.50 points or 0.91% to settle at 5,286.10. The index touched high and low of 5,345.50 and 5,282.70 respectively. 14 stocks advanced against 36 declining ones on the index. (Provisional)

The top gainers on the Nifty were Tata Power up 1.07%, Ambuja Cement up 0.67%, Kotak Bank up 0.62%, Jindal Steel up 0.60% and Ranbaxy Laboratories was up 0.46%. On the other hand, JP Associates down 9.58%, SAIL down 6.28%, Sesa Goa down 5.70%, DLF down 5.16% and Sterlite Industries down 4.75% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 descending 0.59%, Germany’s DAX dropped 0.58% and the United Kingdom’s FTSE 100 lost 0.46%.

Asian stock markets ended mixed on Wednesday ahead of Federal Reserve Chairman Ben Bernanke's speech to international central bankers gathering in Jackson Hole on Friday and European Central Bank’s meeting next week. The Conference Board's consumer confidence data Tuesday showed that the index fell to its lowest level since November 2011, which also added pressure on Bernanke to give some indication of a further round of quantitative easing during his speech. Hong Kong shares fell on Wednesday, dragged down by a 4.2% loss of foodmaker Want Want China, which was heavily traded on a turnover day. Japanese shares ended higher, with Renesas Electronics Corp surging 35% on the news that U.S. private equity fund KKR & Co plans to invest around $1.3 billion in the struggling chipmaker, while Shanghai declined to a three and half year low.