Global weakness drag benchmarks lower; power, metal weigh

Erasing all their previous session’s gain, Indian equity indices exhibited a bleak session of performance and ended the session near low point of the day’s trade on Friday due to profit taking in select blue chip stocks. Both the frontline gauges lost their crucial 5,700 (Nifty) and 18,700 (Sensex) levels as investors kept themselves busy in offloading positions in sectors like power, metal and capital goods ahead of the F&O expiry week. Cut of about a percent in Index heavyweight Reliance Industry too dampened the sentiments. The company has said that there has been no significant improvement in ground-level decision making which has impacted the business environment.

Some amount of pessimism also came in from money markets as rupee fell to a fresh one-month low near 54 versus its previous close of 53.42 on the back of heavy dollar buying by oil firms, the largest buyers in the domestic currency market. The sentiments also got bashed after provisional data released by the stock exchanges showed that foreign institutional investors (FIIs) were net sellers of Indian stocks on October 18, 2012. FIIs sold shares worth a net Rs 68.87 crore on Thursday.

Also, weakness in global markets hit sentiment on the domestic bourses adversely and the frontline indicies extended their downfall. Most of the Asian equity indices ended the session in the red as traders cashed in profits after a week of upbeat data out of China and rising hopes for the future of the euro-zone. South Korean shares led the decline with a 0.9 percent fall as worries about corporate earnings due out next week returned to the fore. Meanwhile, European counters too traded in the red in early deals as investors maintained a cautious mode waiting for the outcome of the European Council summit that concludes in Brussels later in the day.

Back home, major blow came in from Capital goods space which edged lower by over one and a half percent on profit booking after recent gains. ABB, Crompton Greaves, Siemens, L&T and Bhel dropped by between 0.25 to 2.33 percent. Selling in Aviation sector too dampened the sentiment; stocks like Spicejet, Jet Airways and Kingfisher Airlines declined as the number of passengers carried by air carriers declined 0.9% to 438.39 lakh during January-September 2012 over January-September 2011. However, the losses remain capped as shares of companies engaged in gems and jewellery business have rallied on back of heavy volumes in otherwise weak market on hopes of higher demand in festive season. Shree Ganesh Jewellery House, Gitanajli Gems, Titan Industries, Tribuhovandas Bhimji Zaveri (TBZ), Thangamayil Jewellery and Renaissance Jewellery rallied up to 10 percent.

On the result front, there were more hits than misses. ITC reported a rise of 21.27% in its net profit at Rs 1836.42 crore in Q2, Zee Entertainment Enterprises posted a rise of 17.48% in its consolidated net profit at Rs 187.69 crore in the second quarter, Petronet LNG too reported a rise of 20.91% in its net profit at Rs 314.79 crore in Q2 while, Adani Ports registered a rise of 56.96% in its net profit at Rs 429.56 crore for the quarter ended September 30, 2012. However, eClerx Services posted a fall of 43.57% in its net profit at Rs 24.67 crore for the quarter ended September 30, 2012 as compared to Rs 43.72 crore for the same quarter in the previous year.

The NSE’s 50-share broadly followed index Nifty fell by over thirty points ending below its psychological 5,700 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex tumbled by over one hundred and twenty points to finish below the psychological 18,700 mark. The broader markets too traded in-line with benchmarks and ended the session with a cut of over half a percent. 

The overall volumes stood at over Rs 2 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth remained in favor of declines as there were 1, 1,275 shares on the gaining side against 1,586 shares on the losing side while 136 shares remain unchanged.

Finally, the BSE Sensex lost 109.62 points or 0.58% to settle at 18,682.31, while the S&P CNX Nifty decline by 34.45 points or 0.60% to end at 5,684.25.

The BSE Sensex touched a high and a low of 18,769.59 and 18,611.76, respectively. The BSE Mid-cap index was down by 0.52% and Small-cap index was down by 0.34%.

ITC up 2.09%, Hero MotoCorp up 0.54%, Dr Reddys Lab up 0.43%, Bharti Airtel up 0.34% and Infosys up 0.32% were the major gainers on the Sensex. On the flip side, Hindalco down 2.54%, Jindal Steel down 2.53%, Gail India down 2.31%, BHEL down 2.02% and Tata Power down 1.82% were the major losers on the index.

The only gainers on the BSE sectoral space were FMCG up 0.84% and Consumer Durables (CD) up 0.43%, while Power down 1.44%, Metal down 1.32%, Capital Goods (CG) down 1.09%, Auto down 0.90% and Bankex down 0.86% were top losers on the BSE sectoral space.

Meanwhile, continuing to shrink for fifth consecutive month, Air passenger traffic dropped by a record 12.4% in September, as exorbitant fares and a slowing economy dented demand. According to the Directorate General of Civil Aviation (DGCA), only 4.01 million passengers flew in September compared with 4.37 million in the previous month and 4.58 million in the same month last year. Air traffic has been on declining spree since May. It fell 0.87% in May, 3.84% in June and 3.70% in August from the corresponding year-earlier periods. Further, the civil aviation ministry data, showed the total passengers carried by all the domestic airlines in the January-September period declined by a marginal 0.86% at 4.38 million passengers from 4.42 million during the corresponding month of 2011.

On a stand-alone basis, Air India took over Jet Airways (India) in market share, a first in recent times. Air India’s market share was at 19.3% in September while Jet Airways was 18.1%. However, low cost carrier, IndiGo, once again emerged as the market leader, with the airline carrying the highest number of passengers and claiming the largest market share in September. The no-frill airline carried 10.94 lakh passengers and claimed 27.2% market share last month. Meanwhile, market share of SpiceJet was at 18.5%, GoAir at 7.6%, Jet Konnect at 5.7% and finally for the beleaguered Kingfisher Airlines stood at 3.5%.

However, the Air passenger traffic figures could further decline since Airfare in India are likely to rise in the winter season, one because domestic flight capacity is down 19% from a year earlier and secondly, on account of arrival of peak travel season that goes on till January. On one hand, Jet Airways and Air India will reduce flights by 10.9% by 6.2% respectively. On the other, SpiceJet, GoAir and IndiGo will increase flights by 8.87%, 14.8% and 30% respectively.

The S&P CNX Nifty touched a high and a low of 5,711.70 and 5,660.00 respectively.

The top gainers on the Nifty were ITC up 1.87%, Ambuja Cement up 1.48%, Dr Reddy up 0.53%, Infosys up 0.44% and Bharti Airtel up 0.41%.

The top losers on the index were Jindal Steel down 2.62%, Hindalco down 2.55%, BHEL down 2.37%, BPCL down 2.31% and Grasim down 2.12%.

European markets were trading in red. France’s CAC 40 down 0.50%, Germany’s DAX down 0.56% and Britain’s FTSE 100 down by 0.27%.

Asian markets ended mixed on Friday as investors booked some profit on the last day of the week after long rally fuelled by upbeat data out of China and rising hopes for the future of the eurozone. Japan’s Nikkei ended up for a fifth straight session, due to yen's continuous decline against the dollar and the euro on anticipations that the Bank of Japan will ease its monetary policy further at its policy meeting later this month. Hong Kong market closed marginally higher, helped by signs of stabilization in the mainland economy. However, Seoul shares went home with red mark amid weak results from Google and Microsoft, while Kospi fell with market heavyweight Samsung Electronics, which ended down 2.6 percent after four sessions of gains.