Post session - Quick review

Indian equity markets went through a volatile day of trade, though the major indices remained in a narrow range throughout the day but lost their direction in the latter part of the day, dragged down by the selling in auto, metal and power stocks. There were some result disappointments that added pressure to the downside of the markets, the PSU lender Allahabad Bank reported a fall of 52.01% in its net profit at Rs 234.20 crore for the quarter ended September 30, 2012 as compared to Rs 488.02 crore for the same quarter in the previous year, its NPA too increased to 2.95% for the quarter as against 1.77% in the previous quarter. During the weekend CG major Crompton Greaves reported a 64% dip in consolidated net profit for the July-September quarter. The weakness in rupee that slipped to its one month low, too weighed on the sentiments of the markets.

The mood of the markets remained cautious since morning tailing sluggish global cues as the US markets slumped on Friday and the Asian markets too remained mostly in red ahead of the US Presedential election. However, the major pressure to the domestic markets came from the weak start of the European markets, which declined on concern that Greece will struggle to secure a bailout. The Greek Prime Minister Antonis Samaras is facing resistance from his coalition partners before lawmakers vote this week on measures required to receive aid. Also UK’s services PMI came at lowest since December 2010.

Back home, the domestic markets made a comeback in last half an hour of trade, though it was not a broad based recovery and the markets again remained in tight range and barely managed to end in green. Though, both the benchmarks, Sensex and Nifty were able to conserve their psychological levels of 18750 and 5700 respectively. The mood of the marketmen were dampened by the weak Services PMI data that came to six month low and the statement of Finance Minister P. Chidambaram that India's economic growth could slow to as little as 5.5 percent this fiscal year. He further said that we will be able to contain the fiscal deficit at 5.3 percent against the budget estimates of 5.1 percent and added that the revision in the fiscal deficit target will result in additional market borrowing up to the new level. On the sectoral front only the defensive FMCG sector was able to make some mark with gain of over a percent, otherwise all other sectors kept struggling, healthcare supported by some good results and bankex aided by late hour spurt in PSU banks, were the other gauges that managed a green close. On the same time power auto and metal remained the worst performers of the day.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1347:1498 while 139 scrips remained unchanged. (Provisional)

The BSE Sensex gained 8.69 points or 0.05% and settled at 18,764.14. The index touched a high and a low of 18,794.63 and 18,683.25 respectively. 12 stocks were seen advancing while 18 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.29% while Small-cap index was down by 0.16%. (Provisional)

On the BSE Sectoral front, FMCG was up by 1.10%, Health Care up by 0.34% and Bankex up by 0.11% were the only gainers, while Power down by 0.68%, Auto down by 0.58%, Metal down by 0.51%, Capital Goods down by 0.29% and IT down by 0.24% were the top losers in the space.

The top gainers on the Sensex were ITC up by 1.71%, Dr. Reddy’s Lab up 1.15%, Cipla up 1.02%, Coal India up by 0.78% and Maruti Suzuki up 0.77%, while, Hindalco Industries down by 2.72%, Bajaj Auto down by 2.38%, Jindal Steel down by 2.11%, Tata Power down by 1.36% and Tata Steel down by 0.95% were the top losers in the index. (Provisional)

Meanwhile, amid peaking inflation rate in line with global financial ill health, Finance Minister P Chidambaram has expressed optimism to attain 5.5% to 6.0% financial growth this fiscal, while expecting it to return to 7% growth by 2013 and 8% by 2014-15.

Last month, the International Monetary Fund had scaled down India’s economic growth estimate for 2012-13 to 4.9% from 6.1% previous year. Chidambaram also expressed his concerns over the inflation rate, which had hit a 10-month high of 7.8% in September.

Reserve Bank of India had left interest rates unchanged at 8% last week, without considering government’s pressure to lower rates for the first time since April. While, the central bank had trimmed India’s GDP growth forecast to 5.8% from previous 6.5%. It also scaled up its inflation projection in March to 7.5% from a previous 7%.

However, Chidambaram emphasized that a combination of effective monetary policy, spending cuts, and a tightening of tax collection is necessary to pare the fiscal deficit and to trigger growth. He also denied the chance for India to face a credit rating downgrade, after the rating agency Standard & Poor's recent comments that the nation holds one third chance to be rated to junk over the next two years.

India VIX, a gauge for markets short term expectation of volatility gained 7.10% at 14.63 from its previous close of 13.66 on Friday. (Provisional)

The S&P CNX Nifty gained 4.55 points or 0.08% to settle at 5,702.25. The index touched high and low of 5,709.20 and 5,679.50 respectively. 20 stocks advanced against 29 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Kotak Bank up 2.08%, ITC up 1.75%, ACC up 1.72%, Asian Paints up 1.63% and Dr. Reddy’s Lab up 1.26%. On the other hand, Hindalco Industries down 2.85%, Bajaj Auto down by 2.31%, Jindal Steel down by 2.30%, JP Associates down by 1.69% and DLF down by 1.36% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down 1.09%, Germany’s DAX down 0.66% and the United Kingdom’s FTSE 100 down 0.63%.

Following Friday's sharp losses on Wall Street, Asian markets went home with red mark on Monday, as investors were not ready to take any strong positions before a series of key events this week, such as US presidential election and China's leadership transition. Hong Kong markets closed lower, tracking two sets of services sector data. While Japan's Nikkei, also ended in negative territory due to profit-taking after last week's healthy gains. Moreover, market players waited for developments surrounding Spain that whether the debt-strapped country will request a bailout from its euro zone partners.