Post session - Quick review

It turned out to be modestly decent session of gains on the first trading day for the fresh month at Dalal Street, whereby Indian equity markets after getting a muted start, gathered sufficient traction to reclaim the lost psychological levels of 18500 (Sensex) and 5600 (Nifty) respectively. Good Auto sales figure for the month of October along with positive European counterparts mainly buttressed the sentiment at Dalal Street, which led to benchmarks gaining for second consecutive session. Additionally, slew of good economic reports, also encouraged the investor’s to go long on risky equities, which by now re-covered from RBI’s shocker of not slashing the key policy rates. Staging a turnaround in industrial growth, the growth in eight core sectors, which occupies 37.9% of weightage in the overall Index of Industrial Production (IIP), registered a seven-month high at 5.1% in September, faster than the upwardly revised 2.3% in August. Meanwhile, supported by a pick-up in new orders and an easing of price pressures, India’s manufacturing activity growth inched up in October from September's 10-month low.

However, the gains of local equity markets remained restricted on account of anxiety witnessed ahead of the outcome of Parthasarathi Shome committee’s final report on GAAR. As per some reports, Finance Ministry has indicated that the ministry may defer introduction of GAAR by a year, setting aside the Shome panel's proposal for a three year deferral.

On the global front, although Asian shares exhibited mixed trend on Thursday, losses were curbed as the region's factory activity surveys mostly improved, with China's official and private sector manufacturing PMIs confirming a recovery in the growth trend even if it lacked punch. China's October official PMI rose to 50.2 in October from 49.8 in September, pointing to expanded factory activity in the world's second-largest economy. The final reading of the HSBC PMI hit an 8-month high of 49.5. On the flip side, European shares were trading sanguine bolstered by relatively robust earnings reports despite economic weakness, while the euro inched lower as uncertainty over how the euro zone will handle crises in Spain and Greece dragged on.

Back home, string of sector-specific movement, mainly cushioned the up-move of Indian equity markets. Banking on festive season, Consumer Durable pivotal, mainly lifted the markets higher, by shooting up over massive 5%. Auto counter speed-drove too on reporting good October sales numbers, which were due to the start of the festive season. Top car maker Maruti Suzuki scaled 52 week high on reporting 85% spurt in October total sales figure. Additionally, commercial vehicle maker Tata Motors too has scooped up gains of over 4% percent on reporting good October sales figure. Further, even Auto major Mahindra & Mahindra, scaled a new high on reporting 8.74 percent increase in total sales at 53,438 units in October, its highest ever in a month.

Secondly, Telecom stocks, viz., Bharti Airtel, Idea Cellular and Reliance Communication, too rang loud ahead EGOM meet later in the evening to take a final call on the contentious issue of taking back the more efficient 900 MHz spectrum being used by the older telecom operators for reallocation at a later auction, a process commonly referred to as refarming.

Thirdly, Banking counter too soared on higher liquidity. Axis Bank, Canara Bank, IDBI Bank and Kotak Mahindra Bank all rallied over a percent. RBI in its second quarterly mid-quarterly review slashed CRR by 25 bps, thereby releasing Rs 17,500 crore of liquidity in the system.

Corporate earnings were mixed bag. On one hand, shares of state-owned electric utility, Power Grid Corporation of India amassed gains over two percent after the company reported higher than expected numbers on every count in the July-September quarter of current financial year. Net profit of Power Grid rose by 58.8 percent year-on-year to Rs 1,126 crore in the quarter, partly helped by a foreign exchange gain of Rs 105 crore. Additionally, stocks of GlaxoSmithkline Consumer Healthcare scooped up gains of over 3/10 percent after the company reported 24.77% rise in its net profit at Rs 128.55 crore for the quarter ended September 30, 2012.

On the other hand, JSW Steel, after edging higher on staging turnaround in Q2, succumbed to profit-booking and concluded with a cut of over half a percent. JSW Steel has reported a net profit of Rs 691 crore for the September quarter as against a net loss of Rs 669 it posted in the corresponding quarter last year, on account of forex gain of Rs 423 crore.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1608:1216 while 134 scrips remained unchanged. (Provisional)

The BSE Sensex gained 41.83 points or 0.23% and settled at 18,547.21. The index touched a high and a low of 18,589.13 and 18,445.18 respectively. 20 stocks were seen advancing while 10 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.79% while Small-cap index was up by 0.73%. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 5.26%, Auto up by 2.26%, Realty up by 1.66%, Power up by 1.05% and Health Care up by 0.91% were the top gainers, while FMCG down by 0.99% and Oil & Gas down by 0.30% were the only losers in the space.

The top gainers on the Sensex were Tata Motors up by 4.22%, Bharti Airtel up 4.18%, Cipla up 3.16%, Wipro up by 2.91% and M&M up 2.18%, while, HUL down by 2.09%, ONGC down by 1.55%, ITC down by 1.38%, HDFC Bank down by 1.03% and Gail India down by 0.95% were the top losers in the index. (Provisional)

Meanwhile, supported by a pick-up in new orders and an easing of price pressures, India’s manufacturing activity growth inched up in October from September's 10-month low. The new orders sub-index, an indicator of future output, increasing for forty-third consecutive month, jumped to 54.9 from 54.4 in September, while export orders registered growth for the second straight month although at a slightly slower pace.

However, the rate of expansion was solid and more or less in line with September’s four-month high. Stronger international demand, the launch of new products and favorable exchange rate conditions mainly was responsible for new export business growth.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at steady space of 52.9 in October, broadly unchanged from September reading of 52.8. A PMI reading above 50 indicates expansion in the sector, while one below suggests decline. The index has remained above 50 for over three and half years now. Meanwhile, data released last month showed manufacturing rose 2.9 percent in August from a year earlier after contracting 0.4 percent in the previous month.

Additionally eight successive month of growth was recorded for employment in the month of October, with payroll numbers too being raised to support new orders growth. The inflation picture notably eased with both output and input prices rising at a slower pace. While input prices inflation in the Indian goods-producing sector persisted in October, the pace of increase was the slowest in 25-months, output prices increased at slowest rate in 23-months.

The October reading of HSBC PMI points to a further improvement in the health of the manufacturing sector, which witnessed the weakest growth rate in ten months in September. However, going forward, the recovery in manufacturing sector, which accounts for around 15 percent of India's gross domestic product, is likely to be ‘slow’, HSBC said, adding that outstanding work in the Indian manufacturing sector was accumulated at a sharp rate during October mainly due to persistent power shortages

India VIX, a gauge for markets short term expectation of volatility lost 2.22% at 14.08 from its previous close of 14.40 on Wednesday. (Provisional)

The S&P CNX Nifty gained 23.10 points or 0.41% to settle at 5,642.80. The index touched high and low of 5,649.75 and 5,601.95 respectively. 38 stocks advanced against 11 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Tata Motors was up 4.44%, Bharti Airtel up 4.34%, Cipla up 3.45%, IDFC up 2.80% and Wipro was up 2.74%. On the other hand, HUL down 1.82%, ONGC down by 1.42%, ITC down by 1.27%, HDFC Bank down by 0.96% and Gail India down by 0.92% were the top losers. (Provisional)

The European markets were trading mixed in green with, France’s CAC 40 up 0.08%, Germany’s DAX up 0.07% and the United Kingdom’s FTSE 100 up 0.23%.

Asian markets ended mixed on the first day of November as losses were restricted with China's official and private sector manufacturing PMIs, which witnessed a recovery in the growth trend. However, Japan's Nikkei reversed early gains closed marginally higher following worse than expected earnings report from electronics major Panasonic Corp. Hang Seng Index went home with green mark with a mild recovery in Hong Kong property developers, which were on sellers radar following government’s measures to cool down the housing market. Meanwhile, Seoul markets ended lower after data showed that South Korea’s manufacturing activity contracted at a slower rate in October compared to that in the previous month.