Post session - Quick review

Indian equity markets acted fairly robust across risky asset class despite the increasingly negative news flow across the globe. Local bourses after taking a breather in the previous session showcased immense optimism in the face of global uncertainties as S&P lowered Italy’s credit rating from ‘A+’ to ‘A’ on concern that weaker growth and a “fragile” government mean the country won’t be able to reduce the euro-region’s second-largest debt load. Meanwhile, renewed worries over Greece sovereign crisis amid signs that the beleaguered nation could be forced to default on its debt obligation also led to risk aversion overseas.

Local equity markets trading in the fine-fettle just went on capturing gains as optimistic investor’s picked up stocks available at attractive valuations after bourses stalled the three days winning streak in the previous session and also after the early consolidation of bourses tracing the dismal regional counterparts.

Asian equity market ended in red on Tuesday as investors digested a credit downgrade slapped on Italy even as the investors awaited the outcome of a two-day Federal Reserve meeting amidst the hopes that new measures to boost US growth will be announced. Meanwhile, US markets tumbled on Monday as growing fears of a Greek debt default prompted investors to sell risky assets and put an end to a week-long rally on Wall Street. However, the European markets bolstering the momentum at Dalal Street were trading in green. European stocks climbed, erasing earlier losses, as technology and construction companies rose.

Back home, bourses also resumed the upward trajectory as they drew some positive from the  comments offered by central bank deputy governor, suggesting the rate rise cycle was near a peak. “India faces inflation of close to 10 per cent in the September-November period but price pressure should moderate from December, meaning the peak of an 18-month rate rise cycle is near”, Reserve Bank of India Subir Gokarn said on Monday.  However, spirit at the Indian equity markets remained undeterred after the comments offered by the prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan, who projected the economic growth in this financial year to slow to about 8% from 8.6 per cent a year ago.

Although buying was witnessed across the board, however, stocks from Information Technology, TECk and Consumer Durables counters showcasing splendid performance enlarged gains of the bourses. IT stocks lead to the upmove as rupee tumbled a 2-year low. A weak rupee boosts revenue of IT companies in rupee terms as the sector derives a lion's share of revenue from exports. Meanwhile, stocks from TECk and Consumer Durable followed the suite.

The 30 share sensitive index-Sensex- reclaiming its 17000 mark, ended above it with gains of over 300 points. Meanwhile, the broadly followed 50 share index- Nifty-registering over 100 points ended above the 5100 level. The broader indices too did a lot for the day’s gain as they ended the trade above 0.75% each. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1843:968 while 94 scrips remained unchanged.

The BSE Sensex accumulated 376.18 points or 2.25% and settled at 17,121.53. The index touched a high and a low of 17,122.39 and 16,758.69 respectively. 28 stocks advanced against 2 declining ones on the index. (Provisional)

The BSE Mid-cap index gained 0.93% while Small-cap index was up by 1.29%. (Provisional)

On the BSE Sectoral front, IT was up 3.34%, TECk was up 2.87%, Consumer Durables was up 2.66%, Bankex was up 2.55% and Metal up 2.08% were the top gainers while, there were no losers.

The top gainers on the Sensex were Hindalco up 4.55%, TCS up 4.38%, SBI up 3.96%, RIL up 3.87% and DLF up 3.73%. (Provisional)

On the flip side, ONGC down 2.73%and BHEL down 0.69% were the only loser on the index. (Provisional)

Meanwhile, the government has cleared 12 proposals for Foreign Direct Investment (FDI) in the country worth a total Rs 242.88 crore, including one from Indian Rotorcraft to carry out the assembly of both military and civil helicopters. The Foreign Investment Promotion Board (FIPB), however, delayed decisions on 15 FDI proposals, including those of Vodafone-Essar and Bangladesh-based Rahimafrooz Batteries, and rejected 7 applications.

Based on the recommendations of FIPB, the government has approved 12 proposals for FDI amounting to Rs 242.88 crore. Mumbai-based Indian Rotorcraft had sought permission to induct foreign equity to carry out the business of final assembly of both military and civil versions of helicopters. The proposal, if executed, would attract Rs 17.42 crore in FDI.

The Board, headed by Economic Affairs Secretary R Gopalan, also gave nod to an Allcargo Global Logistics' proposal for FDI worth Rs 141.36 crore. The firm had sought ex-post facto approval for the issuance and allotment of optionally convertible warrants to raise funds for setting up multi-modal transport operations and inland container depot/container freight stations as part of its logistics business.

Another major FDI application that was cleared in the FIPB meeting held on September 2 was of Checkmate Services. The Gujarat-based firm had sought the government's permission for initiation of foreign equity in its private security services business, the proposal was worth Rs 66 crore. Other proposal of PTC India Financial Services, Delhi and Haryana, for transfer of shares by way of a share swap to carry out the business of power generation, as well as Honda Siel Cars India's application for FDI in a vocational training institute on automobiles and related fields were also cleared.

The Board, however, delayed a decision on Bangladesh-based Rahimafrooz Batteries' proposal to set up a wholly owned subsidiary to undertake the import and wholesale distribution of batteries and provide services in India. The decision on Vodafone Essar's request to transfer shares from a resident to a non-resident to carry out activities relating to its telecommunications business was also deferred. Walt Disney Company (Southeast) Asia Pte, InterCall Asia Pacific Holdings, Singapore, 9X Media and Cordia International Corp, USA is among others on which decisions were not taken.

The proposals of Jadoli Systems, Bangalore and AOS Holding India SAS France were rejected. FDI proposals worth Rs 122.79 crore were approved in August. The next meeting of the FIPB is scheduled on September 30.

India VIX, a gauge for market’s short term expectation of volatility lost 7.93% at 27.25 from its previous close of 29.60 on Monday. (Provisional)

The S&P CNX Nifty gained 116.40 points or 2.31% to settle at 5,148.35. The index touched high and low of 5,149.90 and 5,035.25 respectively. 45 stocks advanced against 5 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Capital up 5.27%, Reliance Power up 5.01%, Cairn up 4.83%, TCS up 4.51% and RCOM up 4.32%. (Provisional)

On the other hand, ONGC down 2.76%, BHEL down 0.60%, Hero MotoCorp down 0.05%, Ranbaxy down 0.02% and BPCL down 0.02% were the losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 1.67%, Germany's DAX up 2.42% and FTSE 100 up 1.64%.

Most of the Asian equity indices finished the day’s trade in the positive terrain on Tuesday after a subdued opening as short-covering witnessed in most of the Asian peers. Chinese Shanghai Composite ended the session with again of 0.4 percent in lackluster turnover, as gains in beaten down financials outweighed losses in underperforming property plays. However, Japanese Nikkei closed over one and half a percent as investors fretted over Europe’s stability after a major ratings agency downgraded Italy’s sovereign debt. S&P late on Monday cut Italy’s sovereign-debt rating by one investment grade notch to A from A+, saying that the nation's weak economic growth and fragile government coalition will make it harder to head off the growing crisis sweeping the euro zone.