Post session - Quick review

The local equity markets were finally able to buck the declining trend and regained some lost ground in the closing deals on Monday on the back of some bargain hunting and short-covering in a few front line stocks. Though, the fears of a marked slowdown in economic growth and fall in earnings due to high interest rates and more monetary tightening moves by the central bank prompted investors to go on a selling spree in the early deals but some investor’s taking the advantage of the oversold market went for inexpensive and fundamental strong stock. However, the day’s high volatility could also be attributed to the expiry of August month contract of F& O series this Thursday. 

Meanwhile, some respite also came to the markets post Finance Minister Pranab Mukherjee statement on Friday that Indian stock markets had been affected by the US market sentiments but the country's economy was robust and the growth story was intact. Worsening tribulations in developed economies and lack of clarity about domestic growth (amid rising inflation, tightening monetary policy and uncertainty over policymaking) are among the major factors playing the malice behind the downtrend of the equity markets off lately. However, investment in safe heaven securities has become the new order of the day as these instruments are being more preferred over equities given the bleak global outlook post the Europe's plagued banking system threatened to implode and the US economy stares at the possibility of another recession. Additionally, acting as saving grace for the markets are the dwindling prices of the Oil. Brent crude fell almost $2 on Monday toward $106 a barrel with traders and investors anticipating the resumption of oil exports from OPEC-member Libya as a six-month civil war there appeared close to an end.

On the global front, the US markets lost about an average one and half a percent on Friday, while the Asian shares surrendered gains to end lower on Monday as worries about the European debt crisis and global economic outlook kept investors on edge. However, the European shares lent some support to the Indian equity markets extending gains in the end, the largest foreign oil operator in Libya, leading the energy sector higher after the entry of Libyan rebels into the capital Tripoli raised hopes of an end of the conflict.

Back home, stocks from Oil & Gas, Power and Metal counters led to the positive climax of the equity markets, while stocks from Information Technology and banking remained the weak spells. The 30 scrip sensitive index -Sensex-which clocked fourth straight weekly loss in the previous session - its longest such streak since the 2008 collapse Lehman Brothers, ended up with gains of over 200 points at a level above the 16300. Similarly the 50 share index Nifty gaining over 50 points, too settled close to 4900 mark. Similarly, the broader indices with no exception clocked gains in line with the larger counterparts. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1753:1052 while 117 scrips remained unchanged.

The BSE Sensex gained 200.84 points or 1.24% and settled at 16,342.51. The index touched a high and a low of 16,370.46 and 16,046.48 respectively. 24 stocks advanced against 6 declining ones on the index (Provisional)

The BSE Mid-cap index gain 1.42% while Small-cap index was up by 1.71%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 2.55%, Metal up 2.16%, Power up 2.09%, FMCG up 1.70% and Capital Goods up 1.69% were the major gainer.On the flip side, IT down 0.82% and Bankex down 0.08% was the only losers.

The gainer on the Sensex were JP Associates up 5.71%, Bajaj Auto up 4.09%, Tata Power up 3.92%, Hindalco up 3.91% and ONGC up 3.68%. (Provisional)

On the flip side, HDFC Bank down 2.15%, DLF down 1.98%, Infosys down 1.73%, TCS down 1.48% and M&M down 0.81% were the top loser on the index. (Provisional)

Meanwhile, the Planning Commission, which has pegged the growth target for the 12th Five Year Plan (2012-17) at 9% despite the ongoing global financial turmoil. Quoting 9% economic growth rate as ‘very ambitious’, Prime Minister Manmohan Singh said, given the current state of the global economy, the target can be achieved if India overcome problems of inadequate infrastructure and managed its resources better.

'Since we have already achieved about 8.2 per cent in the 11th plan period, it may seem that a transition to 9 per cent growth is not difficult,' the Prime Minister said. Despite the global financial crisis in 2008, and ongoing uncertainty in Europe and US over the issue of debt crisis, the performance of Indian economy has been better than the other emerging economies. 'However, it is in fact a very ambitious target given the current global economic situation, which is full of uncertainties about the prospects in industrialized countries and their implications for global capital markets,' he added.

The fear of economic slowdown occurred when the leading global rating agency Standard and Poor’s downgraded the United States sovereign debt and ongoing debt crisis in European nation, which affected the stock market sentiment across the globe.  Accepting the adverse impact of ongoing global crisis, Prime Minster said 'Our own economy has also slowed down compared to last year, and this year's growth may be around 8% or a little more, at best'.

'Despite this sobering environment, we should aim at 9 per cent growth. This is because we are not planning for today, or even for the rest of this year. We are planning for the five year period from 2012-13 to 2016-17,' he added.

With reference to the growth trend of Asian nations such as Japan, Korea in past and China in last two decades, Manmohan Singh said India too could grow at a rapid rate provided it could scale up infrastructure and bring out wide-spread reforms. 'India is now capable of repeating the performance of this group of Asian countries. But we must remember that it will not happen automatically, by simply proceeding on a business as usual basis. There are many difficult challenges we must overcome to achieve the transition to 9 per cent growth,' he said.

India VIX, a gauge for market’s short term expectation of volatility lost 7.22% at 27.08 from its previous close of 29.19 on Friday. (Provisional)

The S&P CNX Nifty gained 59.40 points or 1.23% to settle at 4,905.05. The index touched high and low of 4,910.05 and 4,808.75 respectively. 36 stocks advanced against 14 declining ones on the index. (Provisional)

The top gainers on the Nifty were SAIL up 7.49%, RCOM up 6.90%, IDFC up 6.64%, Reliance Infra up 6.50%, and JP Associates up 5.72%. (Provisional)

On the other hand, GAIL down 3.87%, DLF down 2.09%, HDFC Bank down 1.81%, Infosys down 1.69% and TCS down 1.34% were the top losers. (Provisional)

The European markets are trading in green, with the France's CAC 40 up 1.38%, Germany's DAX up 0.31% and FTSE 100 up 1.46%.

Asian equity indices continued their southbound journey for third consecutive session and snapped the day’s trade mostly in the negative terrain on Monday as traders remained worried over the possibility of a new global recession. Meanwhile, Japanese Nikkei declined over a percent in the trade after exporters tumbled due to concerns over the strong yen. Moreover, South Korean index Seoul Composite remained the top loser losing about two percent as fears of global economic downturn prompted investors to sell risky assets. However, Hang Seng remained the lone gainer amongst the Asian peers gained about half a percent, reversing all its earlier losses, thanks to late buying following two sessions of heavy selling at the end of last week.