Post session - Quick review

It was yet again a lackluster session of performance for Indian equity markets, which despite gaining much of the lost ground in the second half of the session, managed to negotiate a flattish to positive close. After pricing in moves taken by the government to revive sluggish economic growth, local equity markets witnessed consolidation for second consecutive trading session in the F&O expiry week as investors started concentrating on weak economic fundamentals and weak global data. However, the gains in select blue chip stocks, viz, ITC, Reliance Industries (RIL) and HDFC, mainly acted as saving grace for Dalal Street. Thus, after dilly-dallying for the entire trading session, 30 share benchmark index of BSE, Sensex, managed a close sub psychological 18700 level, which proved to be tough resistance for the index. Similarly, widely followed index of NSE, Nifty, too after piercing through the crucial 5700 mark, cooled from its high points to settle a little above the 5650 level. Degree of outperformance was staged by broader indices, which went home with gains of over and close to 0.50%. Meanwhile, trade of over Rs 2.2 lac core was done in terms of volume turnover in the F&O expiry week (Provisional)

On the global front, global growth fears which overpowered remaining optimism over central bank stimulus efforts led to a mixed close in Asian pacific market. Meanwhile, European stocks too were trading sluggish as investors turned reluctant to make bold moves ahead of key events in Spain and Greece, as concerns about global growth simmered. Additionally, investors awaited reports on U.S. consumer confidence and house prices.

Closer home, stocks from high beta Realty, defensive Fast Moving Consumer Goods and Healthcare emerged as investor’s favorites in today’s trading session. On the flip side, stocks from Metal, Auto and Public Sector Undertaking counter, continuing to be on the seller’s radar, emerged as the top laggards. A lot of sector-specific action was witnessed in today’s traded session, shares exposed to India's state-owned electricity distributors gained in early trade on Tuesday before succumbing to profit-booking, after the government approved a bailout plan for the cash-strapped utilities. However, the move also benefited private power producers, who in the absence of payments, were operating below capacity and were facing difficulties in paying their installments to lenders. Beneficiaries were JSW Energy, Adani Power and Lanco Infra, which rallied in the range of 2-4%. Additionally, Sugar stocks viz, Bajaj Hindusthan , Shree Renuka Sugar and Balrampur Chini Mills too all lost sweetness after Government deferred a decision on scrapping subsidy on levy sugar under the public distribution system (PDS) quota, as removing the subsidy would have meant a steep hike in the price of the commodity to Rs 23 per kg from Rs 13.50/kg. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1555:1320 while 133 scrips remained unchanged. (Provisional)

The BSE Sensex gained 20.33 points or 0.11% and settled at 18,693.67. The index touched a high and a low of 18,790.01 and 18,636.16 respectively. 11 stocks were seen advancing while 19 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.50% while Small-cap index was up 0.60%. (Provisional)

On the BSE Sectoral front, Realty was up 2.35%, FMCG up by 2.13%, Consumer Durables was up 0.86%, Health Care up 0.60% and Power was up 0.54% were the top gainers, while Metal down 1.53%, Auto down by 0.61%, Oil & Gas down by 0.36% and PSU down by 0.19% were the only losers in the space.

The top gainers on the Sensex were BHEL up 3.07%, ITC up 2.07%, HUL up by 2.01%, Cipla up 1.92% and HDFC up 0.99% while, Jindal Steel down by 5.05%, Sterlite Industries down by 2.60%, Tata Motors down by 1.70%, Maruti Suzuki down by 1.69% and Tata Steel down by 1.56% were the top losers in the index. (Provisional)

Meanwhile, in a great respite for common man, the Centre has deferred its decision of slashing subsidy on sugar under the public distribution system (PDS) quota. Currently, the government is selling sugar at a subsidized rate of Rs 13.50 per kg through the PDS, which it buys at Rs 19.50 per kg from millers. The government has been selling about 27 lakh tonnes of sugar every year to the below poverty line (BPL) families through PDS.

The PDS rate of sugar remains same since 2002. With the rising procurement price of the sweetener in line with peaking sugarcane price, the Ministry of Food had proposed raising sugar prices through PDS so as to reduce the burden of the government fund. It also pointed out that if the prices are raised to Rs 25.37 per kg, for sugar sold at every rupee lower than this price, the government will have to incur a subsidy of Rs 270 crore a year.

Albeit, it has not suggested any specific amount of hike in sugar prices, but left the decision to the Cabinet Committee on Economic Affairs (CCEA). It is mandatory for mills to sell 10% of their output to the government at below cost rates for supply to ration shops. Against the country's annual sugar demand of 22 million tonnes, mills are estimated to have produced 26 million tonnes of sugar in the 2011-12 marketing year.

However, the Union Cabinet has extended a control order on commodities from October 2012 to September 2013, ensuring moderate prices of pulses, edible oils and oilseeds. It also has not passed the proposal to digitize ration cards, and fully computerize the supply management chain of the Food Corporation of India.

India VIX, a gauge for markets short term expectation of volatility lost 9.13% at 17.11 from its previous close of 18.83 on Monday. (Provisional)

The S&P CNX Nifty gained 7.15 points or 0.13% to settle at 5,676.75. The index touched high and low of 5,702.70 and 5,652.45 respectively. 23 stocks advanced against 27 declining ones on the index. (Provisional)

The top gainers on the Nifty were Kotak Bank was up 3.17%, BHEL up 2.70%, HUL up 2.29%, Cipla up 2.18% and ITC was up 2.09%. On the other hand, Jindal Steel down 4.70%, Cairn India down by 3.02%, JP Associates down by 2.72%, Sterlite Industries down by 2.65% and Axis Bank down 2.49% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down 0.42%, Germany’s DAX down 0.51% and the United Kingdom’s FTSE 100 down 0.12%.

Asian markets made a mixed closing on Tuesday, though the mood in the region remained subdued since morning but few of the indices showed good efforts to close in green in the dying hours. There was concern related to Europe that kept the markets under pressure, as Germany and France disagreed on when to introduce a banking union for the 17-nation single currency and attempts to resolve the region’s debt crisis seemed deadlocked. On the same time the reports from China remained discouraging, as a survey pointed out that manufacturers and retailers in the nation are less optimistic about sales than they were three months ago and are cutting jobs. Meanwhile, China’s overnight money-market rate climbed to a seven-month high on speculation cash shortages will worsen when the financial markets will remain closed for a week starting October 1.