Post session - Quick review

No fireworks were witnessed at D-street ahead of the festive celebration for Diwali, a festival of lights and wealth, which marks the beginning of the new fiscal year for many businesses. Rather it was session of consolidation for barometer gauges, as market awaited cues from special Mahurat customary trading session on Tuesday and October month’s inflation data, for further direction. India's headline inflation likely accelerated to an 11-month high in October on costlier fuel and food. In a nothing sort of session, 30 share benchmark index, Sensex ended near its neutral line i.e., above 18650 psychological mark. Similar trend was staged by widely followed index, Nifty, which ended above 5650 crucial mark. Broader indices, staged outperformance in comparison to frontline equity indices, went home with gains of over quarter percent.

Couple of gloomy economic indicators, which pointed that the economy was not out of the woods yet, mainly discouraged investors from pouring their money in risky equities. In signs that the worst for Indian economy was not over yet, India’s index of industrial production (IIP), a key measure of industrial output witnessed contraction of 0.4 per cent in September 2012 at 163.6, way below the consensus estimates of 3 percent growth figure. Additionally, annual rate of inflation, based on the consumer prices index (CPI) in India, creeping a tad higher in the month of October, grew at 9.75 percent. Food inflation in the CPI dropped to 11.43 percent in October from 11.53 percent in September 2012.

Additionally, drop of index heavyweights, too added to the bearish sentiment. RIL stocks witnessed profit-booking post Arvind Kejriwal on Friday alleged that brothers Mukesh and Anil Ambani and Congress MP Annu Tandon, among others, have crores of black money deposited in banks in Switzerland.

Further, even feeble global cues added to the investor’s glum. Most of the Asian-pacific markets were beaten down in red on Monday as investors' concerns about the fiscal crisis in the United States and Greece's bailout programme eclipsed growth prospects of the world's two largest economies, the United States and China. Adding to the uncertainty, Japan reported that its economy shrank 0.9 percent in July-September from the previous quarter, the first contraction in three quarters, suggesting faltering global demand and weak consumer spending may push the world's third-largest economy into a mild recession.

Meanwhile, European shares trimmed opening losses as robust Chinese data offset growing concern over Greece. Investors took heart from numbers out of China showing its export growth climbed to a five-month high above 11 percent, adding to recent data suggesting the country's seven straight quarters of slowing economic growth have ended.

Closer home, Capital Goods, Metal and Auto counters, were amongst the worst hit of the session. Capital goods shares tumbled after the latest IIP data showed that capital goods production slumped 12.2% in September 2012 from a year earlier, compared with a 3.4% decline in August 2012. On the flip side, stocks from Consumer Durable, Realty and Bankex counters, enticed maximum investor’s attention. Further, even Information Technology stocks gathered steam after Indian rupee depreciated to two months low after data showing the a record trade deficit and a contraction in factory output re-ignited fears about economic growth at a time of continued high inflation. India's exports in October contracted 1.63% year-on-year, for the sixth month in a row, to $23.2 billion, mainly due to the demand slowdown in the US and European markets.

In stock specific action, shares of United Spirits soared close to 35 per cent to 52-week high on Monday after the UK-based Diageo Plc said it will buy 53.4 per cent stake in the company for Rs 11,166.5 crore in a multi-structured deal. On the flip side, Coal India shares slipped after the company narrowly missed estimates by reporting 19% growth in its net profit after taxes, minority interest and share of profit at Rs  3078.08 crore for the quarter ended September 30, 2012. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1340:1452 while 124 scrips remained unchanged. (Provisional)

The BSE Sensex lost 9.29 points or 0.05% and settled at 18,674.39. The index touched a high and a low of 18,750.92 and 18,607.66 respectively. 9 stocks were seen advancing and 20 stocks were declining while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index was up by 0.39% while Small-cap index was up by 0.26%. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 1.36%, Realty up 1.05%, Bankex up 1.01%, TECk up 0.57% and IT up 0.51% were the top gainers, while Capital Goods down by 0.72%, Metal down by 0.71%, Auto down by 0.44%, Power down by 0.27% and Oil & Gas down by 0.20% were the only losers in the space.

The top gainers on the Sensex were HDFC Bank up by 1.99%, Bharti Airtel up 1.62%, SBI up 1.51%, Infosys up 0.67% and TCS up 0.34%, while, Hero MotoCorp down by 1.86%, Tata Steel down by 1.78%, ITC down by 1.47%, Tata Power down by 1.38% and Gail India down by 0.98% were the top losers in the index. (Provisional)

Meanwhile, in signs that the economy is not out of woods, India’s index of industrial production (IIP), a key measure of industrial output witnessed contraction of 0.4 per cent in September 2012 at 163.6, way below the consensus estimates of 3 percent growth figure. Further, the number was below than August month’s growth figure of 2.7 per cent, which was later revised to 2.3 per cent. Meanwhile, the cumulative growth for the period April-September 2012-13 over the corresponding period of the previous year stands at 0.1 per cent.

The industrial output mostly has remained fragile in the previous few months, with an exception being August, as growth in all three sectors viz. mining, manufacturing and electricity got dampened. After taking a breather in the previous month, the manufacturing sector, which constitutes about 75.53 percent of industrial production, resumed its southbound journey, by witnessing contraction of 1.5 per cent for the month under review as against growth of 2.9 per cent in August.

However, mining sector, which constitutes about 14.6 percent of industrial production, grew at 5.5 per cent as against growth of 2 per cent in August. Further, growth in electricity sector too rose to 3.9 percent versus a 1.9 percent in the previous month. The cumulative growth in the three sectors during April-September 2012-13 over the corresponding period of 2011-12 has been 0.0 per cent, (-) 0.4 per cent and 4.6 per cent respectively.

Capital goods output, a key investment indicator, clearly continued to be a disappointment as capital goods production witnessed a massive decline of  12.2 percent on y-o-y basis highlighting that companies are wary of making investments in high-interest and uncertain economic climate. Consumer goods, on the other hand, witnessed contraction 0.3 per cent, driven by decline of 1.7 percent in consumer durables. Meanwhile, non consumer-durables, registered 1.1 percent growth.

Industrial output, which accounts for a little over 15 percent of gross domestic product (GDP), highlights continuing weakness for the economy, which languished near a three-year low of 5.5 percent annually in the three months to June.  However, the country has a long way to go before its springs back to the stellar growth rates of the past, after having slipped since February into a phase called stagnation that has become worst since the depths of a global crisis three years ago.

India VIX, a gauge for markets short term expectation of volatility gained 3.40% at 14.86 from its previous close of 14.37 on Friday. (Provisional)

The S&P CNX Nifty gained 0.55 points or 0.01% to settle at 5,686.80. The index touched high and low of 5,718.90 and 5,665.75 respectively. 24 stocks advanced against 26 declining ones on the index. (Provisional)

The top gainers on the Nifty were IDFC was up 3.31%, HDFC Bank up 2.15%, JP Associates up 2.03%, Bharti Airtel up 1.69% and SBI was up 1.57%. On the other hand, DLF down 2.68%, Ranbaxy down by 2.16%, Hero MotoCorp down by 2.03%, BPCL down by 2.01% and Siemens down by 1.85% were the top losers. (Provisional)

The European markets were trading mixed with, France’s CAC 40 down 0.15%, Germany’s DAX up 0.09% and the United Kingdom’s FTSE 100 up 0.13%.

Asian markets ended mostly lower on Monday as market sentiments were weighed down by concerns over U.S. fiscal crisis along with Greece's bailout, which spoiled optimism over world’s largest economy’s growth prospects. However Hong Kong and mainland Chinese stock markets closed in positive territory following Chinese Cabinet officials’ comments that the country’s economic slowdown has ended, although the economy is not ready to stage a recovery, and that exporters still face tough conditions. Japan’s Nikkei touched four-week low as the exporting nation registered its worst September trade figures for 30 years as exports slumped.