Post session - Quick review

The Indian markets extended their fall for the second straight day to the new week. The memories of flash crash in last session still looked haunting the markets, though some of the blue chips were the major drag for the markets but the global cues too remained sluggish and could not lend any support to the markets. Instead there were some positive triggers from the domestic front but they too were unable to help the markets from sliding further.

Meanwhile, Finance Minister P. Chidambaram tried to soothe the investors’ worries about passing of different FDI bills and said that he will approach the opposition for the same. Chidambaram also said that he plans to unveil a path to credible and feasible fiscal consolidation, following Kelkar panel’s warning that the country was on the edge of a fiscal cliff because of high subsidies. The finance minister said that fiscal and monetary policy must act in tandem to promote growth. He pointed that due to global problems the GDP has slowed and high inflation and declining investments were responsible for slow growth.

The global markets too traded precariously and most of the Asian markets ended with cut of about a percent after World Bank cut its growth outlook for China, saying that the world's second biggest economy would grow by 7.7 per cent from its earlier May's estimates of 8.2 per cent. In Europe too, the situation remained grim ahead of the euro-area finance ministers meet to discuss the region’s debt crisis.

Back home, the mood of the markets remained somber since morning with realty and oil & gas continuously putting pressure. While, oil major and market heavyweight Reliance Industries plunged on downgrade by a global mortgage and as petroleum ministry rejected its plea of any immediate revision in gas price before April 2014. RIL has sought more than a three-time increase in the price of natural gas being produced from its KG-D6 field on the eastern coast. The other market heavyweight DLF dragged the whole realty index after being embroiled in the issue of favoring Robert Vadra, son-in-law of Congress chief. However, it was broad based selling pressure that got intensified with the weak start of the European markets. The broader indices that held strong till most part of the day too lost their momentum in the last and ended lower by over a quarter percent. But cuts were seen in the blue chip stocks and traders opted to book profit fearing more decline. However, one gauge that made a good bounce back in the last hour was telecom; it gained traders fervor after the EGoM, headed by Finance Minister P. Chidambaram considering levy of a one-time spectrum fee, decided to send all its recommendations to the Cabinet, which is expected to take up the matter on October 16. It was also decided that one-time fee will be charged from all telecom companies having spectrum beyond 4.4 MHz. Apart from telecom, only FMCG stocks ended in green, the volume too remained low.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1386:1490 while 137 scrips remained unchanged. (Provisional)

The BSE Sensex lost 245.99 points or 1.30% and settled at 18,692.47. The index touched a high and a low of 18,969.19 and 18,684.40 respectively. 8 stocks were seen advancing while 22 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.49% while Small-cap index was down 0.17%. (Provisional)

On the BSE Sectoral front, Health Care was up 1.09% and FMCG up 0.01% were the only gainers, while Realty down by 3.69%, Oil & Gas down by 3.05%, Capital Goods down by 2.82%, IT down by 1.46% and Power down by 1.42% were the top losers in the space.

The top gainers on the Sensex were Sun Pharma was up 3.44%, Bharti Airtel up 1.49%, Cipla up by 0.80%, Jindal Steel up 0.77% and ITC up 0.69%, while, Reliance Industries down by 4.75%, Hindalco Industries down by 3.84%, BHEL down by 3.50%, L&T down by 3.36% and SBI down by 3.01% were the top losers in the index. (Provisional)

Meanwhile, notwithstanding strong opposition from allies of UPA government on its decision allowing foreign direct investments (FDI) in multi-brand retail, the Competition Commission of India (CCI) chairman Ashok Chawla pointed out that the entry of big players in the retail market would trigger competition, ensuring innovative and much cheaper products with better quality. He also suggested that the retail sector in India has to be regulated with no special dynamics like any other sector.

UPA ally Trinamool Congress had withdrawn support to the government opposing its decision allowing 51% FDI in multi-brand retail, while other political parties including opposition BJP and Left parties also expressed its strong protest by stamping it as anti-people decision by pointing that it would affect business of small retailers. However, the industry has welcomed the reform and hopes that it would be a huge mood lifter and also expects that it would benefit all stakeholders -farmers, small manufacturers as well as customers.

The Consumer organization CUTS Secretary General Pradeep Mehta opined that there is less room for anti-competitive practices of predatory pricing and abuse of dominance by big retail players due to low entry barriers for un-organized retail. Global retail giants - Walmart and Carrefour which have been approaching government with high interest to FDI in multi-brand retail, would now be allowed to up to 51% to open stores in 10 states and UTs in India. US-based Walmart has expressed its hopes to open its first store within 18 months.

Competition Commission of India (CCI) is a statutory body of Government of India responsible to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

India VIX, a gauge for markets short term expectation of volatility gained 2.32% at 17.17 from its previous close of 16.78 on Friday. (Provisional)

The S&P CNX Nifty lost 75.15 points or 1.31% to settle at 5,671.80. The index touched high and low of 5,751.85 and 5,666.20 respectively. 12 stocks advanced against 38 declining ones on the index. (Provisional)

The top gainers on the Nifty were Sun Pharma was up 3.73%, Asian Paints up 2.33%, Ultratech Cement up 1.62%, Bharti Airtel up 1.56% and Cairn India was up 1.33%. On the other hand, DLF down 7.46%, Reliance Infrastructure down by 4.82%, Reliance Industries down by 4.76%, Hindalco Industries down by 3.96% and BHEL down by 3.75% were the top losers. (Provisional)

The European markets were trading on a mixed note with, France’s CAC 40 down 1.20%, Germany’s DAX down 1.38% and the United Kingdom’s FTSE 100 up 0.06%.

Asian stocks ended weak on Monday as World Bank slashed its growth forecasts for East Asia, emphasizing worries over the global economic outlook, and caution set in about the coming corporate earnings season. An underwhelming return for Shanghai after a week-long holiday added to the negative stand of the day. Investors traded cautiously ahead of Europe’s finance ministers meet in Luxembourg to discuss closer banking cooperation. Hang Seng Index ended lower amid decline in retailers and telecoms companies. Meanwhile, Market volumes were lower than usual, with Japan shut for a public holiday.