Post session - Quick review

Snapping six long sessions winning streak, benchmark equity indices after getting a dismal start on account of feeble global cues failed to stage turnaround show on Thursday. Worries over looming “fiscal cliff” debate and Europe’s economic troubles, which returned to the forefront, a day after the re-election of US President Barack Obama, and weak Q2 corporate earnings domestically, mainly led to risk-aversion at D-street. However, barometer gauges, which cut short substantial losses by the closing deals on account of recovery which emerged in noon deals thanks to positive European counterparts, led to less disappointing session of trade. 30 share index, Sensex, on Bombay Stock Exchange (BSE), despite losing over 50 points, managed to end above 18800 level. Similarly, widely followed index, Nifty, on National Stock Exchange (NSE), too sliding close to quarter of points managed to negotiate a close above the crucial 5700 level. The broader indices, meanwhile, exhibited mixed close, with Midcap index outperforming not only Smallcap index but also frontline equity indices. Barring the trend, telecom stock such as Bharti Airtel, Idea Cellular and Reliance Communications, rang loud after the Cabinet approved one-time spectrum charges on all mobile phone companies, a move that will give the exchequer a minimum of Rs 30,927 crore.

On the global front, Asian stock markets dropped more than a percent on Thursday, following a drop of  two percent in Wall Street shares as focus turned to impending U.S. fiscal tightening with this week’s presidential election, now out of the way. The U.S. economy faces the possibility of $600 billion worth of automatic spending cuts and tax hikes at the start of 2013 unless Congress can reach a deal to mitigate the impact. This could lead the U.S. into recession, the prospect of which is driving investors to exit U.S equities. On the flip side, European stocks rebounded from the biggest drop in two weeks as companies including Hermes International SCA and Swiss Re posted results that exceeded expectations.

Closer home, much of the street’s gains belong the Realty, Auto and Fast Moving Consumer Goods counters, which were on buyer’s radar. Interest rate sensitive continued their northbound journey for third straight session on expectations of rate cut from the central bank in the first quarter of 2013. On the other hand, Capital Goods, Healthcare, Power and Oil & Gas counters, were beaten blue by investor’s.

Plunge of Pharmaceutical firm, Cadila by over 3%, mainly was drag on Health Care counter. The stocks witnessed nasty laceration on positing 7.34% fall in its net profit at Rs 95.14 crore for the quarter ended September 30, 2012, due to forex loss, which was at Rs 75.6 crore for the quarter. However, even Ranbaxy Lab plunged despite beating estimates and reported net profit of Rs 552.19 crore for the quarter as compared to a net loss of Rs 439.20 crore for the same quarter in the previous year, thanks to stronger demand for its generic drugs in its key North American market and also ballooned foreign exchange gains. Further, disappointment also crept in healthcare counters after Sun Pharmaceuticals stocks fell over 3/4 percent on reporting 46.53% fall in its net profit at Rs 319.64 crore for the quarter.

On the flip side, Tata Motors traded jubilantly on reporting over 8-fold rise in Q2 net profit. The company reported 749.94% rise in its net profit at Rs 867.11 crore for the quarter as compared to Rs 102.02 crore for the same quarter in the previous year. Healthy sales by its British brand Jaguar Land Rover (JLR), primarily in China, once again came to the rescue of Tata Motors which on Thursday reported a 10.5% rise in consolidated net profit at Rs 2,075 crore for the second quarter ended September 30. On the flip side, SAIL stocks got hammered down after leading state-run steel producing company, reported below expectation rise of 11.92% in net profit at Rs 543.11 crore for the quarter ended September, 2012. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1374:1454 while 133 scrips remained unchanged. (Provisional)

The BSE Sensex lost 66.98 points or 0.35% and settled at 18,835.43. The index touched a high and a low of 18,865.21 and 18,736.45 respectively. 9 stocks were seen advancing while 21 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.18% while Small-cap index was down by 0.21%. (Provisional)

On the BSE Sectoral front, Realty was up by 2.30%, Auto up by 0.91%, TECk up by 0.07%, FMCG up by 0.06% and Consumer Durables up 0.03% were the top gainers, while Capital Goods down by 1.47%, Health Care down by 0.84%, Power down by 0.74%, Oil & Gas down by 0.57% and Bankex down by 0.39% were the top losers in the space.

The top gainers on the Sensex were Tata Motors up by 5.53%, Wipro up 1.77%, Bharti Airtel up by 1.68%, SBI up by 1.29% and Tata Steel up 0.51%, while, Gail India down by 2.17%, L&T down by 2.13%, Tata Power down by 1.88%, ICICI Bank down by 1.52% and Dr. Reddy’s Lab down by 1.35% were the top losers in the index. (Provisional)

Meanwhile, in an attempt to create level playing field between old and new operators, Union Cabinet headed by Prime Minister Manmohan Singh Cabinet on Nov 8 approving the empowered group of minister’s (EGoM’s) recommendations, levied about Rs 31,000 crore as a one-time fee on spectrum held by incumbent telecom firms such as Bharti Airtel and Vodafone.

Last month, the EGoM headed by finance minister P Chidambaram decided that all existing operators would have to pay a one-time spectrum charge. This one-time spectrum fee is divided into two components. First, telcom companies have to pay for all their 2G spectrum holdings beyond 4.4 MHz and 2.5 MHz in the case of CDMA players prospectively for the remaining period of their licences. This charge will be linked to the spectrum price in the upcoming auctions scheduled to begin on November 12. Meanwhile, the second component is that incumbent GSM operators such as Bharti, Vodafone, Idea and BSNL will be charged a one-time fee retrospectively for all 2G airwaves they hold beyond the 6.2 MHz mark from July 2008 to December 2012.

In the meeting, though the Cabinet approved the levy of spectrum discovered price for the GSM operators, for CDMA players Department of Telecom (DOT) will come out with a benchmark later, in absence of any company being in fray to buy CDMA spectrum.

Meanwhile, the DoT had previously estimated that the levy to fetch the government Rs 30,927 crore, but with the exact quantum of levy on CDMA operators not yet clear, the government's net take could not be immediately ascertained.

India VIX, a gauge for markets short term expectation of volatility lost 1.99% at 14.22 from its previous close of 14.51 on Wednesday. (Provisional)

The S&P CNX Nifty lost 23.70 points or 0.41% to settle at 5,736.40. The index touched high and low of 5,744.50 and 5,693.95 respectively. 15 stocks advanced against 35 declining ones on the index. (Provisional)

The top gainers on the Nifty were Tata Motors was up 5.51%, Bharti Airtel up 2.10%, Wipro up 1.83%, Asian Paints up 1.32% and SBI was up 1.26%. On the other hand, L&T down 1.97%, Gail India down by 1.91%, IDFC down by 1.86%, Reliance Infrastructure down by 1.74% and Tata Power down by 1.64% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 0.22%, Germany’s DAX up 0.55% and the United Kingdom’s FTSE 100 up 0.36%.

Asian markets tumbled on Thursday as concerns as the U.S. fiscal cliff made investors nervous merely a day after the U.S. presidential election results. Japan’s Nikkei closed in negative territory with the stronger yen pressuring Japanese exporters. Chinese markets went home with red mark ahead of announcement of the next generation of leaders later today. Meanwhile, market sentiments were pressured after the European Union slashed its economic forecast.