Post session - Quick review

Indian equity markets snapping two days gaining streak ended lower on Monday as uncertainties over European sovereign debt crisis prompted “risk aversion” at Dalal Street. Lack of major buying activities at current levels in absence of supportive cues from global peers after Reserve Bank of India hiked key rates by 25 basis points. World’s most aggressive central bank-RBI- in order to quell surging inflation had raised rates for the 12th time in 18 months on Friday and signaled more was to come, confounding expectations that it was coming to the end of its tightening cycle.

However, Indian equity markets right from the beginning of the trade showed signs of weakness in line with the regional counterparts reacting to an unproductive European finance ministers’ meeting in Poland on Saturday as the European policymakers failed to come up with a plan to stem the region’s debt crisis. Euro zone finance chiefs said last week that “there is no room for tax cuts or extra spending to spur an economy on the brink of stagnation. Further, cancellation of a visit by Greek Prime Minister George Papandreou to the United States to chair an emergency meeting and a regional election defeat for Germany's chancellor Angela Merkel also added to the investor’s angst.

Local bourses shrugging off the positive close of Wall Street on Friday picked up gloomy leads from European markets after dismal close of Asian markets. US stocks rose for a fifth day in a row on Friday and the S&P 500 scored its best week since early July on signs euro zone leaders were acting together to limit any damage from its sovereign debt crisis. Meanwhile, European markets slumped in early trade as Greece prepared to convince international leaders that it was able to avoid defaulting on its debt. However, the stockiest also opted to stay at the bay ahead of Greece's finance minister teleconference with eurozone and IMF officials later in the day to decide on extra steps by Athens to meet conditions for urgently needed rescue funds. The US future indices also pointed to red start of Wall Street on Monday.

Back home, stocks from Consumer Durable and Auto counters toiled a lot to turnaround the losses of the bourses, however, stocks from Capital Goods, Bankex and Power counters along with the rest of the 8 sectoral indices on the BSE reversed the good work. The 30 share index shedding over 150 points ended sub 16800 level. Meanwhile the 50 share index -Nifty-despite plummeting over 50 points settled above the 5000 level. The broader indices ended in red along with larger peers. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1339:1428 while 117 scrips remained unchanged.

The BSE Sensex lost 183.59 points or 1.08% and settled at 16,750.24. The index touched a high and a low of 16,865.93 and 16,709.41 respectively. 9 stocks advanced against 21 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.41% while Small-cap index was down by 0.05%. (Provisional)

On the BSE Sectoral front, Consumer Durables was up 0.51% and Auto up 0.32% were the only gainers while, Capital goods down 2.25%, Metal down 1.24%, Power down by 1.22%, Bankex down by 1.14% and PSU down by 1.09% were the top losers.

The gainers on the Sensex were Maruti Suzuki up 2.85%, JP Associates up 2.17%, Wipro up 1.24%, Bharti Airtel up 0.54% and HDFC Bank up 0.49%. (Provisional)

On the flip side, Sterlite Industries down 4.09%, L&T down 3.08%, Sun Pharma down 2.68%, ICICI Bank down 2.45% and DLF down 2.32% were the top loser on the index. (Provisional)

Meanwhile, during the first four months of current financial year, India’s import of sensitive items, which includes pulses and edible oils, surged by 34.5% to Rs 21.537 crore from Rs 16,016 crore in April to June 2011. In April to June 2011, India’s pulses imports increased by 27.2% to Rs 2,016.26 crore from Rs 15.85.57 crore in April to June 2010. India is net importer of pluses.

Items like foodgrains, automobiles, milk and beverages comes under the sensitive category and government monitors the import of these items to see if they are negatively affecting the domestic industry.

India’s import of edible oil surged by 51% to Rs 9,145.39 crore in April to June 2011 from Rs 6,055.6 crore in the same period of last year. India is one of the biggest consumer and importer of edible oils. This surge in import of edible oil is due to significant increase in imports of crude palm oil and its fractions. 

In the April to June 2011, items like alcoholic beverages and spices also showed surge in imports, it increased by 45.2% and 41.7% respectively. India’s import of products like small scale industries like umbrellas, locks, toys and glassware also increased by 53.9% to 483.07 crore during April to July 2011. India’s imports of automobile jumped by 128.8% to Rs 999.2 64 crore in April to June 2011 from Rs 433.89 crore in same period during last fiscal.

However, in the first quarter of 2011-12, India’s imports of foodgrains, milk and milk products, and tea and coffee declined by 85.2%, 57.9%, and 36.4%, respectively. The import of milk and dairy products also declined by Rs 142.84 crore in the first quarter of current fiscal from Rs 339.43 crore in April-June 2010 quarter.

During April to June 2011, imports of sensitive items accounted for 4.4% of the country’s total imports. The gross imports of all commodities in April-June 2011, surged by 33.65% to Rs 4,94,763.07 crore from Rs 3,70,182.12 crore in April-June 2010.

India’s import sensitive items from Indonesia, China, Malaysia, Germany, the US, Canada, Japan, Thailand, the UK, Australia and Italy have increased whereas imports of sensitive items from Korea, Argentina and Myanmar have declined.

India VIX, a gauge for market’s short term expectation of volatility gained 4.04% at 29.60 from its previous close of 28.45 on Friday. (Provisional)

The S&P CNX Nifty lost 51.70 points or 1.02% to settle at 5,032.55. The index touched high and low of 5,068.40 and 5,019.25 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 3.22%, Maruti Suzuki up 2.75%, GAIL up 2.34%, HCL Tech up 1.92% and Wipro up 1.55%. (Provisional)

On the other hand, Reliance Infra down 4.29%, Sterlite Industries down 4.26%, L&T down 3.00%, ICICI Bank down 2.99% and Axis Bank down 2.94% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 2.71%, Germany's DAX down 2.81% and FTSE 100 down 1.86%.

All the Asian equity indices finished the day’s trade in the negative terrain on Monday after European finance heads failed to agree a plan to solve the region’s debt woes, while they also put off a decision on releasing rescue funds to Greece. European finance ministers meeting Friday in Poland said they would push back a decision on whether Greece should get its next payment from last year's $151 billion bailout package until next month. Moreover, China's benchmark index Shanghai Composite ended at a 14-month closing low with a cut of 1.79 percent, weighed by cyclical names in thin turnover on fears of tight money supply, as a $2.7 billion IPO by Sinohydro Group is set to be launched this week. However, Japanese equity markets remained closed for the trade in observance of a public holiday.