Post session - Quick review

In the flip-flop session of trade, listless benchmark equity indices yet again witnessing consolidation for second consecutive session, settled on flattish note on Tuesday. Absence of buying interest ahead of the winter session of Parliament that knick starts on November 22, mainly led to downbeat trend at D-street. Further, even lack of positive cues from global front, dissuaded investor’s from investing into equities. In the choppy session of trade, 30 share index, Sensex, slipping into negative terrain, settled sub psychological 18400 mark. However, widely followed index, Nifty, despite managing a positive close, settled below 5600 crucial bastion. Meanwhile, broader indices witnessed brutal laceration, went home with loss of over 3/ 4 percent.

On the global front, Asian shares exhibited mixed close as investors weighed the hopes of a compromise in the U.S. fiscal crisis against Moody's Investors Service scrapping France's top-notch credit rating, which highlighted downside risk from the euro zone debt woes. Gains in Asia largely evaporated after the Bank of Japan concluded a policy meeting without new action. Meanwhile, European stocks traded lower on Tuesday after ratings agency yanked France's coveted AAA credit rating. . Moody's Investors Service on Monday downgraded France one notch to ‘Aa1’ due to its weak prospects for economic growth and its exposure to Europe's financial crisis. It kept the rating's outlook at negative, meaning it could face future downgrades.

Closer home, mere Auto and Consumer Durable stocks, staged resilience, while stocks from Realty, Oil & Gas and metal counters emerged as top laggards. Pharmaceuticals stocks too witnessed intense selling pressure, namely Cipla, Ranbaxy Laboratories witnessed a cut of over a percent. EGOM on the proposed National Pharmaceutical Pricing Policy, headed by Agriculture Minister Sharad Pawar, will meet on Wednesday to discuss concerns raised by the finance ministry. Additionally, Power stocks, namely, Reliance Infra, NTPC, Torrent Power ran out of fuel even after Power Minister Jyotiraditya Scindia said his immediate priority is to get coal linkages for the power plants. On pooling prices of coal, he said: 'Pooling of coal and fuel prices as pass-through is being deliberated. Moreover, PSU OMCs continued to their southbound journey as crude oil futures traded near the highest price in a month as concern that Middle East unrest will disrupt supplies countered speculation crude stockpiles rose for a third week in the US. Furthermore, shares in gold finance companies, namely, Manappuram Finance and Muthoot Finance fell on Tuesday after the Reserve Bank of India, in a bid to dissuade people from indulging in speculative activity banned banks from advancing any loans to its customers for purchasing gold in any form, which includes primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds.  The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1067:1781 while 127 scrips remained unchanged. (Provisional)

The BSE Sensex lost 3.61 points or 0.02% and settled at 18,335.39. The index touched a high and a low of 18,467.91 and 18,255.69 respectively. 14 stocks were seen advancing and 16 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.79% while Small-cap index was down by 0.94%. (Provisional)

On the BSE Sectoral front, Auto up 0.63%, Health Care up by 0.02% and Bankex up 0.02% were the only gainers, while Realty down by 3.24%, Oil & Gas down by 1.01%, Metal down by 0.80%, Capital Goods down by 0.58% and PSU down by 0.41% were the top losers in the space.

The top gainers on the Sensex were M&M up 3.43%, HDFC up by 1.94%, Tata Power up 1.81%, TCS up 1.63% and Wipro up 1.16%, while, Hindalco Industries down by 1.90%, Bajaj Auto down by 1.57%, SBI down by 1.45%, Infosys down by 1.42% and Reliance Industries down by 1.36% were the top losers in the index. (Provisional)

Meanwhile, in an effort to dissuade people from indulging in speculative activity, the Reserve Bank of India (RBI) on Nov 19 has directed a total ban on banks from advancing any loans to its customers for purchasing gold in any form, which includes primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds.

Country’s apex bank further clarified that, no advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilized for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion.

This decision comes in the wake of significant rise in imports of gold in recent years, which is putting pressure on Current Account Deficit (CAD). In the 2011-12 fiscal, country’s gold imports stood at $60 billion and the quantum of import was 1,067 tonnes. Many banks are providing loans to the customers to buy gold. These easily available loans are creating more demand for gold, further leading to increase in gold prices. Additionally, the huge demand created for gold is also triggering imports. However, the RBI has allowed banks to provide finance for genuine working capital requirements of jewelers.

Back in its Monetary Policy Statement of April 2012, RBI constituted a Working Group to study issues relating to gold imports and gold loans by Non-Banking Financial Companies (NBFCs) in India. The Working Group, submitted its draft report in August 2012, suggested that other than working capital finance, banks are not permitted to finance purchase of gold in any form.

India VIX, a gauge for markets short term expectation of volatility lost 5.21% at 15.81 from its previous close of 16.68 on Monday. (Provisional)

The S&P CNX Nifty gained 1.85 points or 0.03% to settle at 5,573.25. The index touched high and low of 5,613.70 and 5,548.35 respectively. 20 stocks advanced against 30 declining ones on the index. (Provisional)

The top gainers on the Nifty were M&M was up 3.28%, HDFC up 1.98%, Tata Power up 1.76%, IDFC up 1.65% and TCS was up 1.49%. On the other hand, JP Associates down 3.76%, DLF down by 2.44%, PNB down by 1.88%, Hindalco down by 1.86% and Reliance Infrastructure down by 1.61% were the top losers. (Provisional)

The European markets were trading mixed with, France’s CAC 40 down 0.41%, Germany’s DAX up 0.01% and the United Kingdom’s FTSE 100 down 0.25%.

Asian markets ended mixed on Tuesday amid worries over the US fiscal cliff, which lead to sell off in the markets. Chinese markets went home with red mark, dragging down Hong Kong markets amid weak foreign investment data in China, which fell for a 10th straight month. South Korean market closed marginally higher, as index heavyweight Samsung Electronics was up by 2.4%, which helped the overall market. Japan's Nikkei ended lower taking pause after last three sessions’ gains as the Bank of Japan didn't announce any fresh stimulus at the meeting.