Post session - Quick review

Expiry day of August series futures and options (F&O) contract brought back cheer into the Indian equity markets, as bourses after grinding lower for most part of the session, shot up unexpectedly by the close of the trade. Despite lack of major breakthrough over the deadlock with respect to coal block issue in winter session of Parliament, markets clocked in gains of over massive 5% (both Nifty and Sensex) in the August F&O series. Market-men showcased immense resilience going ahead of the crucial Q1FY13 GDP data, and also ahead of Jackson meet on Friday, as Indian equity markets after staggering lower for four consecutive sessions, unexpectedly staged recovery in the dying hours of the trade. 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, after dipping its heads below the 17400 level, recuperated substantial ground, to end above 17500 level, with gains of over 50 points. Similarly, the widely followed index of National Stock Exchange (NSE), Nifty, after adding over half a percentage gains, ended above 5300 crucial mark. Meanwhile, the broader indices too ended on sanguine note, as both Midcap and Smallcap index went home with gains of over 0.50% and 0.25% respectively.

On the global front, Asian shares hit a one-month low on growth concerns as investors waited to see whether U.S. Federal Reserve Chairman Ben Bernanke will give any hint about further U.S. stimulus in a speech to fellow central bankers on Friday. Fed Chairman Bernanke’s Friday speech will be the highlight of the event, after European Central Bank chief Mario Draghi on Tuesday cancelled his scheduled appearance in Jackson Hole. Meanwhile, uncertainty over central bank action to fight slower global growth also pulled European shares lower on Thursday. A slight improvement in recent U.S. economic data has tempered QE3 hopes, however, some in the skeptics have even begun to doubt whether quantitative easing (QE) by the Fed would do much to help growth.

Closer home, local equity markets slug to bounce back in green in light of sluggish reports, which made investor’s ponder over whether stubborn inflation, elevated interest rates, a weak global economy and political gridlock and policy stagnation had actually began to bleak India’s economic growth outlook. Research firm Moody, is expecting Asia’s third largest economy to grow at 5.2 percent on year on year (y-o-y) basis, its lowest pace of growth since early 2009. Meanwhile, thoroughly rejecting the government’s overly positive outlook for 7.6 per cent growth across the 2012-2013 fiscal year, the research firm has forecasted India’s economy to grow at 5.5 percent for current fiscal. Sectorally, Realty, Health Care and Information Technology emerged as pillar of strength for the bourses, while Metal, Oil & Gas and Auto counters topping the list from behind emerged as top laggards.

On the F&O front, August series Nifty and Sensex staged a stellar performance by garnering over 5% each, after losing over 2% in July series. Moreover, the broader markets underperformed their larger peers by a fat margin as by the end of series as the CNX Mid Cap index garnered gains of over 0.20% while BSE Smallcap index lost 0.70% respectively.

From the expiry perspective, market wide rollover of 63.57% was observed, which was lower than the three month average of 64.58% while Nifty rollovers were at 50.06%, higher than three month average of 51.67%. Sectorally, Finance, Power and Capital Goods counters witnessed high rollovers, while sectors like Cement, Pharma and Infrastructure pockets observed relatively low rolls. Among individual stocks, HDFC (32%), ACC (43%) and Dr Reddy’s (45%) witnessed low rolls while BHEL (80%), Maruti (73%) and Power Grid (70%) observed better rollover into the September series. Meanwhile, the session ended on overall volumes of over Rs 3.30 lakh crore, highest value ever, while the turnover for NSE F&O segment without any doubts remained on the higher side as compared to that on Wednesday at over Rs 2.56 lakh crore on F&O expiry.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1414:1321, while 144 scrips remained unchanged. (Provisional)

The BSE Sensex gained 81.00 points or 0.46% and settled at 17,571.81. The index touched a high and a low of 17,605.51 and 17,367.55 respectively. 21 stocks were seen advancing against 9 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.67% while Small-cap index was up 0.31%. (Provisional)

On the BSE Sectoral front, Realty up 1.65%, Health Care up 0.76%, Bankex up 0.74%, FMCG up 0.70% and Consumer Durables up 0.58% were the top gainers, while Metal down 0.29% and Oil & Gas down 0.04% were the only losers in the space.

The top gainers on the Sensex were Hindalco Industries up 2.60%, HDFC up 1.68%, Cipla up by 1.56%, Tata Motors up 1.50% and BHEL up 1.43% while, Gail India down 2.38%, Jindal Steel down 2.32%, Tata Steel down 2.00%, Maruti Suzuki down 1.42% and Sterlite Industries down 1.41% were the top losers in the index. (Provisional)

Meanwhile, in a latest study by CRISIL it has been revealed that for the first time in two decades Consumption in rural India is growing at a faster pace than in cities and towns. It was reported that between 2009-10 and 2011-12, additional spending by rural India was Rs 375,000 crore, much higher compared to Rs 299,400 crore by urbanites in the same period. The CRISIL study also noted a shift in spending patterns in rural areas, with consumers moving beyond necessities such as toothpaste and soap to so-called discretionary products such as televisions and mobile phones.

Growth in rural consumption was fuelled by a rise in household incomes due to greater non-farm job opportunities and government initiated employment generation schemes. As per National Sample Survey Organisation (NSSO) data, during 2004-05 to 2009-10, rural construction jobs rose 88 per cent, while the number of people employed in agriculture fell from 249 million to 229 million.  Migrants from villages to urban areas, who benefited from job opportunities in infrastructure and construction projects, increased remittances to their families in rural India, which has boosted consumption.

CRISIL’s study showed that nearly 42% of rural households owned a television in 2009-10, up from 26% five years earlier, while 14% of rural households had a scooter or motorbike in 2009-10, almost double to that in 2004-05.

The study has also lauded the efforts of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which fuelled job creation on an unprecedented scale and nearly 27 per cent of rural households availed themselves of employment under MGNREGS in 2009-10. However, it also said that despite the positive impacts of these schemes, pressure on public finances will make it difficult to significantly hike such spending in future

India VIX, a gauge for markets short term expectation of volatility lost 0.41% at 16.67 from its previous close of 16.74 on Wednesday. (Provisional)

The S&P CNX Nifty gained 32.40 points or 0.61% to settle at 5,320.20. The index touched high and low of 5,342.80 and 5,255.05 respectively. 33 stocks advanced against 17 declining ones on the index. (Provisional)

The top gainers on the Nifty were DLF up 4.01%, IDFC up 2.89%, Hindalco Industries up 2.84%, JP Associates up 2.34% and HUL was up 2.19%. On the other hand, Tata Steel down 2.28%, Gail India down 2.25%, Jindal Steel down 2.11%, BPCL down 1.60% and Reliance Infrastructure down 1.27% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 descending 0.17%, Germany’s DAX dropped 0.54% and the United Kingdom’s FTSE 100 lost 0.12%.

Asian stocks fell broadly on Thursday as weak economic data from Australia, Japan and South Korea stoked global growth worries. Investors risk appetite faded as further evidence of a rebound in the U.S. housing market and positive news on U.S. economic growth increases doubt on the Fed's willingness to embark on a third round of quantitative easing. Hang Seng Index ended lower on renewed concerns over the Chinese economy, while local property developers made heavy losses due to concerns that the government could intervene to cool the property market. South Korea's Kospi lost 1.5%, almost in line with index heavyweight Samsung Electronics, which also fell over 1%. Japan's Nikkei ended down 1% at 8983.78, below the 9,000 mark for the first time since August 15.