Post session - Quick review

Second half of trading session proved to be quite a ‘game changer’ for benchmark equity indices at Dalal Street, which earlier reeling under intense selling pressure took a U-turn from losses to end near the high point of the day. The session’s up move could be widely attributed to the surge of European counterparts coupled with lower level buying in domestic equity markets. Further, even the hope of rate cut in RBI’s upcoming second quarterly policy review on October 30, provided cushion to the markets, after investor’s analyzed that core inflation for the month of September remained unchanged at 5.56% and statement from RBI Deputy Governor that current anti-inflationary policy stance could be ineffective if financial imbalances remain. Additionally, uptick of the market bellwether Reliance Industries ahead of its Q2 earnings provided impetus to the hibernating bulls. In a quarter led by refining, the company is expected to post an over 20 percent growth in profits sequentially.  Thus in the high volume session of trade, 30 share barometer index, Sensex, on BSE, mustered gains of over 2/10 percent to end above the mental 18700 level. Similarly, the widely followed index, Nifty, on NSE, too added over similar magnitude of gains, to conclude above the 5600 level.

On the global front, Asian markets ended mostly in green as better than expected data from China over the weekend, kept the mood upbeat. China’s trade surplus widened to $26.67 billion in September - beating expectations for an on-month decline to a $22.4 billion surplus. Additionally, European shares were trading in high spirits on renewed hopes of Spain bailout.

Closer home, benchmark equity indices, in a knee jerk-reaction, fell to lowest point after India's main inflation gauge wholesale price index (WPI) limiting the room for an interest-rate cut unexpectedly spurted to its 10 months high level at 7.81% for the month of September as compared to 7.55% (Provisional) for the previous month. However, risk appetite revisited Dalal Street in light of positive global set-up, mainly positive start of European counterparts. Prominent gainers on BSE sectoral chart emerged to be the stocks belonging to Fast Moving Consumer Goods, Oil & Gas, Realty and Bankex counters. Undoubtedly, hopes of rate cut did well for rate sensitive’s, while the surge of Reliance Industries lifted Oil & Gas counters. Additionally, shares of cement manufacturers, mainly mid-and-small sized companies, rallied on the bourses after Heidelberg Cement India reported a strong net profit growth for the quarter ended September 2012 (Q2FY13). Besides Heidelberg Cement India, Prism Cement, Madras Cements, JK Lakshmi Cement, India Cements and Dalmia Bharat Enterprises sneaked out gains higher in the range of 0.50-2.50%. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1457:1381 while 141 scrips remained unchanged. (Provisional)

The BSE Sensex gains 38.37 points or 0.21% and settled at 18713.55. The index touched a high and a low of 18726.38 and 18596.65 respectively. 19 stocks were seen advancing while 11 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.06% while Small-cap index was up 0.43%. (Provisional)

On the BSE Sectoral front, FMCG up by 0.75%, Oil&Gas up by 0.53%, Realty up by 0.52%, Bankex up by 0.37% and Power up by 0.35% were the top gainers, while CD down by 0.84%, IT down by 0.76%, TECk down by 0.49%, Auto down by 0.30% and CG down by 0.24% were the top loser in the space.

The top gainers on the Sensex were BHEL was up 2.26%, Cipla up 1.69%, Hindalco Industries  up by 1.61%, ONGC up by 1.05% and Bharti Airtel up 1.04%, while, Maruti Suzuki down by 2.69%, Infosys down by 1.35%, Sterlite Industries  down by 1.12%, L&T down by 0.93% and TCS down by 0.92% were the top losers in the index. (Provisional)

Meanwhile, limiting the room for an interest-rate cut to revive the economy, the wholesale price index (WPI), India's main inflation gauge, unexpectedly spurted to its 10 months high level at 7.81% for the month of September, as compared to 7.55% (Provisional) for the previous month, but lower than the rate of 10% during the corresponding month of the previous year.

The much awaited figure was worse than the consensus estimates of 7.70%. Build up inflation in the financial year so far was 4.60% compared to a buildup of 4.48% in the corresponding period of the previous year. Moreover, the annual reading for the month of July was revised sharply higher to 7.52% from earlier of 6.87%.

The murky figure comes in the wake of government increasing the prices of heavily subsidized diesel on September 13 to rein in spending, with the index for fuel and power group with a weightage of 14.91% in index blowing by 4.00% to 188.3 from 181.00 in the previous month, due to higher prices of aviation turbine fuel (13%), light diesel oil (11%), naphtha and high speed diesel (9% each), furnace oil (7%) and kerosene (1%).  However, the prices of bitumen (1%) declined.

Further, the index for Manufactured Products, which carries weight of almost 65% in the index, rose by 0.5% to 147.7 from 146.9 for the previous month. The index for ‘Food Articles’ group rose by 1.2% to 166.5 from 164.5 in the previous month.

Meanwhile, the index for primary articles group, which has a weightage of 20.12% in overall WPI and includes food, non-food and minerals group too rose by 0.5% to 220.7 from 219.5 for the previous month. The index for ‘Food Articles’ group rose by 0.6% to 212.7 from 211.4 in the previous month. However, the index for ‘Non Food Articles’ group declined by 2.1% at 202.4 (Provisional) from 206.8 (Provisional) for the previous month. Furthermore, the index for ‘Minerals’ group rose by 4.9% to 347.6 (Provisional) from 331.3 (Provisional) for the previous month.

Faced with a big hole in the budget and the prospect of losing its investment grade credit rating, the government hiked prices of heavily subsidized diesel on September 13, the impact of which is reflected on India’s main inflation guage, which has spurted to 10 months high level, which in turn seems to limiting RBI’s abilities of easing monetary policy. However, still there are minute chances that RBI temporarily dropping its fight against inflation, would reciprocate to the government gestures, by slashing rates in its upcoming second quarterly monetary policy review on October 30, 2012.

India VIX, a gauge for markets short term expectation of volatility lost 3.57% at 15.90 from its previous close of 16.49 on Friday. (Provisional)

The S&P CNX Nifty gains 11.20 points or 0.20% to settle at 5,687.25. The index touched high and low of 5,693.70 and 5,651.05 respectively. 27 stocks advanced against 23 declining ones on the index. (Provisional)

The top gainers on the Nifty were Siemens was up 1.91%, BHEL up1.77%, Hindalco up 1.74%, Cipla up 1.62% and Ranbaxy was up 1.58%. On the other hand, Maruti down 2.64%, Infosys down by 1.32%, Sesa Goa down by 1.29%, JP Associates down by 1.19% and Power Grid down by 1.00% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 1.28%, Germany’s DAX up 0.84% and the United Kingdom’s FTSE 100 up 0.48%.

Asian shares ended mixed on Monday amid growth concerns ahead of the third-quarter corporate earnings season. Meanwhile, world’s second-largest economy, China, reported 1.9% rise in September inflation, while exports rebounded at nearly twice the rate expected, ahead of Chinese gross domestic product (GDP) numbers in this week. Japan’s Nikkei ended higher, with Hitachi Construction Machinery climbing 2.9% in Tokyo.