Post session - Quick review

Benchmark equity indices after consolidating for previous four trading sessions finally showcased fervor to put up a smart show at Dalal Street. Slew of positive news flow from both domestic as well as global front mainly prompted investors to go long on risky equities on the last trading session of the week, which co-incidentally also turn out to be first trading session of the new month F&O series. Equity markets, which remained tightly in the bulls grip, in today’s trading session, saw 30 share barometer index of BSE, Sensex, puffing up gains of over a percent to conclude above 18700 psychological level and widely followed index of  NSE, Nifty, too ending above the 5700 crucial level, a level last seen on July 7, 2011. Meanwhile, broader indices too enticing traction, ended with gains of over a percent (Midcap index) and over 3/4 percent (Smallcap index). However, for the week, benchmark equity indices, managed to negotiate a flat close, with a larger degree of outperformance being shown by broader indices, as NSE Midcap Index clocked gains of over 2%, while BSE Small cap index registered profit of over 3%.

SC decision vindicating UPA’s free hands in allocating natural resource combined with inline estimates, government’s announcement of H2FY13 borrowing calendar, mainly gave the required fillip to the lackluster equity markets. However, even positive global set up after recession-hit Spain pledge to cut spending by $51 billion, drove the markets across the globe. Spain, whose banks have been hobbled by toxic assets and has so far been reluctant to ask for help, on Thursday unveiled a program of spending cuts and tax hikes that raised expectations it soon could ask for financial help from its neighbors.

Closer home, release of slower core sector growth data also emerged as non-event for bourses, which sanguine with recent happening chose to ignore the same. Confirming a slow-down in economy, growth in the eight core industries which occupies 37.9% of weightage in the overall Index of Industrial Production (IIP), slipped to 2.1% in August as against 3.8% in the same month last year, weighed down by contraction in natural gas, fertilizers and cement. However, much of the strength emerged from the stocks belonging from Auto, Consumer Durable and Fast Moving Consumer Goods counters, which enticed maximum buying interest on BSE sectoral font. Meanwhile, by the end of the trade, Realty counter only emerged as the spoil-sport. However, even shares of pharmaceutical companies were subdued after the Group of Ministers (GoM) recommended retail prices of 348 essential drugs to be fixed at the weighted average price of brands that have more than 1 per cent market share.

In stock-specific action, Kingfisher Airlines was locked down after falling 5 per cent after promoter Vijay Mallya said that the United Breweries Group will be not use proceeds from a possible stake sale in United Spirits to infuse funds into the debt laden carrier.  Additionally, Tata Group shares were among the top Sensex gainers after the group's holding company Tata Sons invested Rs 220 crore in Infiniti on Wednesday, which will enable the company to buy out Woolworths Wholesale and expand the Croma business. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1606:1286 while 151 scrips remained unchanged. (Provisional)

The BSE Sensex gained 175.11 points or 0.94% and settled at 18,754.61. The index touched a high and a low of 18,869.94 and 18,698.51 respectively. 23 stocks were seen advancing while 7 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 1.25% while Small-cap index was up 0.92%. (Provisional)

On the BSE Sectoral front, Auto up by 1.89%, Consumer Durables was up 1.68%, Health Care was up 1.54%, FMCG up by 1.48% and Power was up 1.38% were the top gainers, while Realty down 0.55% was the only loser in the space.

The top gainers on the Sensex were Hindalco Industries up 3.52%, Sun Pharma up 3.06%, Tata Motors up by 2.91%, Cipla up 2.72% and Tata Power up 2.30% while, BHEL down by 0.58%, Infosys down by 0.46%, Gail India down by 0.34%, SBI down by 0.29% and Hero MotoCorp down by 0.27% were the top losers in the index. (Provisional)

Meanwhile, amid the growing concern of rising fiscal deficit the government has retained its H2FY13 borrowing target and will borrow Rs 2 lakh crore in remaining period of the current fiscal. The government budgeted to borrow Rs 5.7 lakh crore this fiscal, or 5.1 per cent of the Gross Domestic Product (GDP), including repayments. In the first six months, it has already borrowed Rs 3.7 lakh crore.

Though, the finance ministry admitted that the fiscal deficit could overshoot the target of 5.1 per cent of GDP but hoping that government’s recent efforts to cut down spends would show results, it stick to its Budgeted borrowing plan of Rs 2 lakh crore for the second half of the fiscal. In the October-March period last financial year, it had borrowed Rs 2.6 lakh crore.

Finance ministry is expecting the fiscal deficit to be maximum of 5.2 to 5.3 per cent, which according to it is doable, however the general expectation is that it may rise to 5.8 per cent of GDP and the government would have to announce extra borrowing to meet that, as the government is unlikely to cut further spending with slower tax revenue generation amid weaker domestic growth.

Although the government is looking to reduce its subsidy burden, attract foreign flows and sell stakes in state owned companies but its previous policies of high subsidy expenditure has led to overshooting of government finances and to meet that the government has been relying on market borrowing, which has been crowding out private investors and lowering growth prospects.

India VIX, a gauge for markets short term expectation of volatility lost 4.43% at 16.16 from its previous close of 16.91 on Thursday. (Provisional)

The S&P CNX Nifty gained 47.85 points or 0.85% to settle at 5,697.35. The index touched high and low of 5,735.15 and 5,683.45 respectively. 39 stocks advanced against 11 declining ones on the index. (Provisional)

The top gainers on the Nifty were Hindalco Industries was up 3.69%, Power Grid up 2.96%, Sun Pharma up 2.96%, Tata Motors up 2.79% and JP Associates was up 2.42%. On the other hand, Reliance Infrastructure down 1.50%, IDFC down by 1.38%, DLF down by 1.35%, HCL Tech down by 1.28% and BHEL down 0.60% were the top losers. (Provisional)

The European markets were trading on mixed note with, France’s CAC 40 down 0.29%, Germany’s DAX up 0.14% and the United Kingdom’s FTSE 100 up 0.23%. 

Tracking global rally, Asian markets closed shutters with green mark on last trading day of the third quarter, barring Japanese market, which hit a two-week closing low on Friday amid worries about falling revenues for Japanese companies in China. Markets added gains as Eurozone debt worries were eased after Spain unveiled swingeing cuts in a budget that is expected to pave the way for a bailout. Hong Kong shares ended higher as hopes that Chinese authorities will take steps to boost the slowing economy and easing by global central banks fueled a rebound in stock markets.