Post session - Quick review

Local bourses after flip-flopping for the entire session ended with a loss of over a percent on Friday as investors remained heedful amid this week's turmoil slashing out their position in the riskier assets before going for a long weekend. Global markets vacillated wildly this week as signs the US might be headed toward recession, rattled investors which were already unnerved by Europe's worsening debt crisis. Meanwhile in Indian markets today, the bourses botched to show any sign of revival despite the dramatically higher finish on Wall Street and somewhat positive close of the Asian markets prompted by a slight drop in US unemployment claims. Overnight, a fall in the number of people seeking unemployment benefits triggered a 423 points surge on the Dow, helping the benchmark regain the 11,000 mark, which also marked the fourth consecutive day when the Dow swung over 400 points either ways. Meanwhile, sentiments improved on the Wall Street as European stocks gained on France's reaffirmation that it will not be downgraded.

Back on Dalal Street, boisterous IIP data also failed to provided the much needed fillip as the investor’s discounting the strong IIP numbers fell prey to the fears that strong reading on IIP would prompt RBI to go for at least one more rate hike in its upcoming monetary policy review, thereby leading the whammy for the rate sensitive’s such as Auto, banking and Realty stocks. India’s industrial production measured by the Index of Industrial Production (IIP) registered growth of 8.8% in June 2011 as compared to 7.4% in June 2010 primarily due to robust growth in the manufacturing sector -- especially capital goods production.

Meanwhile, negative opening of the European markets too led to the drubbing in the Indian equity markets. However, the market sentiment improved in the European markets after France, Spain, Italy and Belgium imposed bans on short- selling from today to stabilize markets after Societe Generale SA dropped to its lowest price since March 2009 on Aug. 10. Also, sentiment improved after the France’s gross domestic product remained unchanged from the first quarter, when it rose 0.9 percent, the Insee statistics office said today in Paris, which was much higher than the economists forecast a 0.3 percent gain.

Asian markets ended mostly higher but pared their early gains on Friday, as investors remained cautious amid this week's turmoil in markets, while losses for auto makers and computer-chip producers sent Tokyo and Seoul into the loss column. Back in India, on the result front, most of the earning were a pleasant surprise for the investor’s as Housing Development & Infrastructure ended  over 0.50% despite the company’s consolidated net profit fell 12.45% at Rs 189.43 crore as compared to Rs 216.36 crore for the quarter ended June 30, 2010. Meanwhile, stocks of Jaiprakash Power Ventures finished with gains despite the company’s consolidated net profit declining by 33.09% at Rs 161.77 crore as compared to Rs 241.79 crore for the previous year. However, also comforting were the stocks of sugar companies that gained today on reports that the government might allow further sugar exports this year. An empowered group of ministers (eGoM) is scheduled to meet late today to discuss allowing additional exports of sugar. The government has already allowed exports of one million tonnes of sugar this year in two tranches, but industry officials are demanding permission to export another 0.5-1 million tonnes to clear pending stocks ahead of the next crop season starting from this October 1.

However, despite some positives, the 30 scrip sensitive index Sensex, tanked over 200 points and closed sub 17000 level. The 50 share broadly followed index Nifty too surrendering over 50 points ended below its 5100 mark. Meanwhile, the broader indices paring some losses ended with a cut of over 0.25%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1254:1563 while 133 scrips remained unchanged.

The BSE Sensex lost 243.73 points or 1.43% and settled at 16,815.67. The index touched a high and a low of 17,246.88 and 16,784.56 respectively. 8 stocks advanced against 22 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.68% while Small-cap index was down by 0.51%. (Provisional) .On the BSE Sectoral front, there were no gainers.

On the flip side, IT down 2.53%, TECk down 2.46%, Bankex down 1.78%, Realty down 1.47% and Metal down 1.39% were the top losers.

The gainer on the Sensex was Jindal Steel up 2.24%, M&M up 1.95%, Hero MotoCorp up 1.74%, ONGC up 1.33% and HUL up 0.29%. (Provisional)

On the flip side, Tata Motors down 5.51%, Hindalco down 4.58%, JP Associates down 3.75%, DLF down 3.10% and Tata Power down 2.88% were the top loser on the index. (Provisional)

Meanwhile, the industrial growth for the month of June has allied the fear of slowdown in the industrial output. India’s industrial production measured by the Index of Industrial Production (IIP) shows growth of 8.8% in June 2011 as compared to 7.4% in June 2010. This increase in growth of the IIP is due to increase in manufacturing and electricity sector which grew by 10% and 7.9% respectively, however, the mining segment of IIP saw moderation in growth, it grew by 0.6% in June 2011 from 6.9% in corresponding month of last fiscal. However, the industrial production from April to June 2011 stood at 6.8% which is less than the same period of corresponding period. This fall in growth on Q-on-Q basis is due to decline in mining and manufacturing which stood 1% and 7.5% respectively during the said period. However, electricity sector surged during the same period to 8.2%.

According to data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, the General Index for the month of June 2011 stood at 170.3, which is 8.8% higher on year-on-year basis. The cumulative growth for the period April-June 2011-12 stands at 6.8% over the corresponding period of the previous year.

The IIP for the Mining, Manufacturing and Electricity sectors for the month of June 2011 stand at 126.0, 182.1 and 144.3 respectively, with the corresponding growth rates of 0.6%, 10.0% and 7.9% as compared to June 2010. The cumulative growth in the three sectors during April-June, 2011-12 over the corresponding period of 2010-11 have been 1.0%, 7.5% and 8.2% respectively, which moved the overall growth in the General Index to 6.8%.

During June 2011, in terms of industries 15 out of 22 industry groups in the manufacturing sector have shown positive growth in June 2011 from June 2010. The industry group ‘Electrical machinery and apparatus n.e.c.’ has shown the highest growth of 88.9%, followed by 19.1% in ‘Office, accounting and computing machinery’ and 18.6% in ‘Other transport equipment’. On the other hand, the industry group ‘Medical, precision and optical instruments, watches and clocks’ has shown a negative growth of 10.3% followed by 10.1% in ‘Radio, TV and communication equipment and apparatus’.

As per Use-based classification the growth rates in June 2011 as compared to the corresponding month of the previous year are 7.5% in Basic goods, 37.7% in Capital goods and 1.9% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 1.0% and 2.1% respectively, with the overall growth in Consumer goods being 1.6%. Some of the important items of capital goods showing high growth during the current month include ‘Cable, Rubber Insulated’ (232.4%), ‘Printing Machinery’ (81.1%), ‘Rubber Transmission and V Belts’ (57.0%), ‘Packaging Machinery’ (48.5%), ‘Textile Machinery’ (47.9%), ‘X-ray equipment’ (33.1%) and ‘Industrial Chains’ (32.0%).

The other important items showing highly positive growth during the month are: ‘Sugar’ (246.9%), ‘Molasses’ (179.5%), ‘Viscose staple fibre’ (72.9%), ‘Stainless/ alloy steel’ (72.4%), ‘GP/GC sheets’ (54.1%), ‘Tanned or Chrome Skins and Leathers’ (53.6%), ‘sponge iron’ (38.0%), ‘CR Sheets’ (33.4%) and ‘Indust. Alcohol (Rectified/Denatured Spirit)’ (31.0%).

The industrial production for the month of June 2011 is higher than May 2011 and June 2010, indicating that industrial activities have increased. However, the first quarter data are not so encouraging; the April to June 2011 IIP growth stood at 6.8% as compared to 9.6% during same period of previous fiscal. Almost 3% fall in industrial production is due to elevated inflation and RBI’s nonstop increase in its key policy rates. Since March 2010, RBI has increased its key policy rates by the 11 times, and it is further expected to increase it on the backdrop of recent development in international economy.

India VIX, a gauge for market’s short term expectation of volatility lost 7.11% at 27.02 from its previous close of 29.09 on Thursday. (Provisional)

The S&P CNX Nifty lost 66.90 points or 1.30% to settle at 5,071.40. The index touched high and low of 5,194.45 and 5,053.35 respectively. 14 stocks advanced against 36 declining ones on the index. (Provisional)

The top gainers on the Nifty were Jindal Steel up 2.74%, M&M up 1.72%, Hero MotoCorp up 1.65%, GAIL up 1.40% and Cairn up 1.07. (Provisional)

On the other hand, Tata Motors down 5.88%, Hindalco down 4.90%, Reliance Capital down 4.74%, JP Associates down 3.89% and Kotak Bank down 3.39% were the top losers. (Provisional)

The European markets are trading in green, with the France's CAC 40 up 2.37%, Germany's DAX up 2.70% and FTSE 100 up 1.76%.

Asian equity indices finished the day’s trade mostly in the positive terrain as sentiments remained strong in the region on the back of overnight rally on Wall Street, supported by unexpected drop in jobless claims and higher-than-estimated earnings coupled with trade deficit, which was smaller than expected. But, the Asian indices pared their early gains on the last trading day of the week as investors remained cautious amid a turbulent global market. Chinese Shanghai rose about half a percent as country allowed the Yuan to rise steadily against the dollar and pumping cash into its own banking system. Japanese index dipped further below the 9,000 line on Friday, extending hefty losses sustained during the most volatile week since the March 11 earthquake as the yen’s strength prompted foreigners to sell carmakers, pulling Toyota Motor to its lowest level this year.