Surprise recovery in late trade help bourses to regain their psychological levels

The August series futures and options expiry session turned out to be a bolt from the blue for the domestic frontline indices as they staged a surprise intraday come-back in the last leg of trade recapturing the psychological 5,300 (Nifty) and 17,500 (Sensex) levels. Moreover, the gauges gained a massive over five percent gains in the August F&O series as traders were keen to roll-over their position to fresh month F&O contract despite mounting worries over policy paralysis in the wake of the parliamentary logjam over controversial CAG report on coal blocks.

However, the markets traded lower for the entire day as investors remained on the safer side ahead of first quarter GDP numbers scheduled to be announced on Aug 31, also the RBI’s governor stating that high inflation and wrecked government finances leave little room for either the central bank or the government to throw policy lifeline, pressurized the market sentiments. The indices, although, witnessed an unexpected recovery in the final half an hour of trade and clocked gains of over half a percent led by recovery in Banking, Auto and software stocks. Realty space emerged as a strong pillar of strength for the bourses garnering over a gain of about two percent as short covering was seen in the counter after few days of continues fall.

Global cues too remained unsupportive as uncertainty over central banks’ action to fight slower global growth sent world shares and industrial commodity prices lower on Thursday, while nervousness ahead of a meeting of central bankers in the United States also curbed risk appetite. In addition, investors remained on the sideline waiting to see whether US Federal Reserve Chairman Ben Bernanke will provide any hints of a third round of monetary easing in a speech at the meeting in Jackson Hole, Wyoming, on Friday. Asian markets fell on Thursday as weakness in resources pushed Australia to a two-week low.

Back home, media shares surged on renewed buying ahead of the October 31, 2012 deadline for cable TV digitization in four metro cities of Delhi, Mumbai, Kolkata and Chennai. The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switchover of the existing analogue Cable TV networks to Digital Addressable System (DAS) by December 2014 in the entire country in four phases. However, the gains remain capped as financial shares remained down after hopes of a rate cut remained elusive on the back of a hawkish stance by the central bank.

The NSE’s 50-share broadly followed index Nifty, rose by about thirty points to settle above the psychological 5,300 support level while Bombay Stock Exchange’s Sensitive Index - Sensex moved up by over fifty points to finish above the psychological 17,500 mark. Moreover, the broader markets too settled in the red with about half a percent gains.

The markets rose on overall volumes of over Rs 3.30 lakh crore while the turnover for NSE F&O segment too remained on the higher side as compared to that on Wednesday at over Rs 2.56 lakh crore. Moreover, the market breadth remained in favor of advances as there were 1,401 shares on the gaining side against 1,327 shares on the losing side while 151 shares remain unchanged.

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 the CNX Mid Cap index garnered gains of over 0.20% while BSE Small cap 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 50.83 points or 0.29% to settle at 17,541.64, while the S&P CNX Nifty rose by 27.25 points or 0.52% to close at 5,315.05.

The BSE Sensex touched a high and a low of 17,605.51 and 17,367.55 respectively. However, the BSE Mid cap index was up by 0.57% and Small cap index up by 0.27%.

Hindalco Industries up by 2.27%, TCS up by 1.68%, Cipla up by 1.57%, Tata Motors up by 1.26% and Wipro up by 1.23% were top gainers on the Sensex, while Gail India down by 2.32%, Maruti Suzuki down by 2.13%, Tata Steel down by 2.06%, Jindal Steel down by 2.03% and Sterlite Industries down by 1.46% were top losers on the index.

The major gainers on the BSE sectoral space were, Realty up by 1.83%, Health Care up by 0.74%, IT up by 0.70%, TECk up by 0.61% and Bankex up 0.55%, while Metal down 0.41%, Oil & Gas down 0.23% and Auto down 0.04% were major losers on the BSE sectoral space.  

Meanwhile, with GDP growth data for April-June quarter due for release on Aug 31, Research firm Moody’s, 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. Further, supporting this view, the research firm added that, ‘the difference this time around behind the sluggish growth would be largely domestic factors and not developments abroad, which emerged as the primary reason behind the 2009 slowdown.

Moody’s Analytics underscored weak business confidence, which was weighed down by stubborn inflation, elevated interest rates, a weak global economy, political gridlock and policy stagnation at the national level, as the primary reason for this forecast. Highlighting that the slowdown was well entrenched in all the sector and broader economy clearly growing below potential, the research firm forecasted India’s economy to grow at 5.5 percent for current fiscal, thoroughly rejecting the government’s overly positive outlook for 7.6 per cent growth across the 2012-2013 fiscal year.

Meanwhile, hit by high interest rates and the global downturn, India’s GDP growth slumped to a nine-year low of 5.3% in the January-March quarter, while that for the entire fiscal, dropped to 6.5 percent, lower than the government's initial estimate of 6.9 per cent and far below the 8.4 per cent logged the previous year.

The S&P CNX Nifty touched a high and low of 5,342.80 and 5,255.05 respectively.

The top gainers on the Nifty were DLF up by 4.01%, IDFC up by 2.89%, Hindalco up by 2.84%, JP Associates up by 2.34% and HUL up by 2.19%. On the flip side, Tata Steel down by 2.28%, GAIL down by 2.25%, Jindal Steel down by 2.11%, BPCL down by 1.60 and Reliance Infra down by 1.27% were the major losers.

The European markets were trading in red, France's CAC 40 down by 0.46%, Germany's DAX was down by 0.82% and United Kingdom’s FTSE 100 was down by 0.20%.

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.