Post session - Quick review

The Indian equity markets remained in subdued mood on Thursday. Coming after a day of break there was political jitters coupled with the sluggishness in the global markets that kept the local indices under pressure throughout the day. Both the benchmark indices made a gap-down start, as the government’s recent reform measures got a jolt after one of its allies Trinamool Congress, led by West Bengal Chief Minister, withdrew its support from the government on issue of fuel price hikes and FDI in retail. Though, government looked firm, ruling out any rollback writing off her differences as irreconcilable but it will have to depend upon outside support for survival and to ward off mid-term elections. Traders concern grew that if the government is depending upon outside support, the slew of reform that have been re-started may get a break and apart from some roll back the political crisis could even threaten future reforms in sectors such as pension and insurance. However, the government got the backing of industry body Ficci, which lauded the reform measures undertaken and said that the government should stick to its decisions for ensuring long term gains.

The global cues too remained sluggish on some weak economic reports, with the Japan reported that nation’s exports declined by 5.8 percent in August from a year earlier, the Chinese preliminary manufacturing data came marginally higher at 47.8 from 47.6 in August. Traders were concerned that China’s manufacturing may contract for an 11th month, as a number below 50 signals a contraction. European markets continued sluggish trade after making a weak start on concern that the global economic slowdown is deepening.

The Domestic markets made few valiant efforts of recovery during the day but widespread selling pulled the indices lower and they closed near the lowest point of the day. Maximum pressure was seen on the commodity stocks, as the concern of global economic weakness weighed heavily on the sentiments. Rupee too fell sharply during the day on worries the government may roll back key reforms and kept the markets under tizzy. Same was the situation in the beginning at the PSU oil marketing companies counter, but they managed to recover on government’s hard stand of not to roll back the reform measures and barring IOC rest of the two rose by over 2 percent. The sectors that managed to hold their head in green were IT and Technology, mainly on the back of rupee weakness. Defensive sector FMCG too closed with a quarter percent of gains, otherwise majority of the sectoral indices suffered cut of over a percent.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1192:1596 while 120 scrips remained unchanged. (Provisional)

The BSE Sensex lost 175.67 points or 0.95% and settled at 18,320.34. The index touched a high and a low of 18,443.92 and 18,291.93 respectively. 10 stocks were seen advancing while 20 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.77% while Small-cap index lost 0.65%. (Provisional)

On the BSE Sectoral front, IT was up 0.61%, TECk was up 0.53% and FMCG up 0.29% were the only gainers, while Metal down 2.38%, Capital Goods down by 2.09%, Power down by 1.94%, Oil & Gas down by 1.70% and Bankex down by 1.23%, were the top losers in the space.

The top gainers on the Sensex were Bajaj Auto up 2.11%, TCS up 1.26%, ITC up by 1.12%, ONGC up 0.84% and Wipro up 0.72% while, BHEL down by 4.27%, Gail India down by 3.58%, Coal India down by 3.08%, Reliance Industries down by 3.06% and Tata Steel down by 2.88% were the top losers in the index. (Provisional)

Meanwhile, praising the recent economic reform measures undertaken by the government, FICCI, besides, appealing the political parties for putting aside their differences said that the government should stick to its decisions as it is essential to bite the bullet for ensuring long term gain.

Further, the industry chamber, besides patting on government’s shoulders for accelerated pace of reforms, said the measures undertaken signaled only a start of a comprehensive reform package and there is a need for much deeper reforms. Moreover, FICCI president R V Kanoria added that government should not roll back, as this signals it’s incapability of taking decisions.

The financial market gave thumbs up to the government's move of raising diesel prices, capping the number of subsidized cylinders for households at six and opening up the aviation sector to foreign airlines and the multi-brand retail sector to foreign retailers such as Wal-Mart, Tesco, Carrefour and others.  However, the government with this move has enticed growing flak from crucial ally of UPA, Trinamool Congress (TMC), which warning its resignation has protested for roll-over of government’s decision.

Meanwhile, underscoring that there is an urgent need to address the negative environment that is discouraging decision making, FICCI averred that proactive investment steps are essential in the greater interest of the nation and consumers.

India VIX, a gauge for markets short term expectation of volatility gained 4.43% at 18.62 from its previous close of 17.83 on Tuesday. (Provisional)

The S&P CNX Nifty lost 57.35 points or 1.02% to settle at 5,542.70. The index touched high and low of 5,581.35 and 5,534.90 respectively. 14 stocks advanced against 36 declining ones on the index. (Provisional)

The top gainers on the Nifty were BPCL was up 2.53%, Bajaj Auto up 2.14%, TCS up 1.24%, ONGC up 1.19% and Ranbaxy Laboratories was up 1.06%. On the other hand, BHEL down 4.27%, GAIL India down by 3.89%, Reliance Infrastructure down by 3.39%, Tata Steel down 3.13% and Axis Bank down 3.11% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down 0.78%, Germany’s DAX down 0.57% and the United Kingdom’s FTSE 100 down 0.60%.

Following previous day’s impressive gains, Asian markets ended lower on Thursday amid weak manufacturing data of China, which increased worries over country’s economic condition. Japan’s Nikkei 225 ended in negative territory losing over 1% as Finance Ministry reported 5.8% decline in the exports from the world’s third-largest economy in August from a year earlier. Mixed U.S. housing data also pressurized the markets to an extent. Shanghai Composite closed in red losing over 2% to end at a more than three-and-a-half year low as the weak PMI data witnessed decline in demand in both domestic and overseas markets. Seoul market fell remarkably amid doubts over the outlook for growth in China, while benchmark Kospi was dragged down by profit booking in tech and oil stocks.