Post session - Quick review

In the flip-flop session of trade, benchmark equity indices managed to showcase up-trend for second consecutive session of trade of Thursday. Importantly, the gains came with the commencement of Winter Session of Parliament, whereby 1st day was complete wash-out. Therefore, in a bid to break the political impasse, the government called for an all-party meeting on Monday. Support was mainly rendered to the bourses by the fact of Trinamool Congress (TMC) failing to get its No-Confidence Motion against the Manmohan Singh government in the Lok Sabha today, which would now lead to the latter hunkering down to battle the opposition on the Foreign Direct Investment (FDI) in multi-brand retail issue. Additionally, positive global-developments buttressed investor’s mood. In the choppy, range-bound session of trade, 30 share barometer index, Sensex, escalating to intra-day high level, pierced past the 18500 level, and closed the session with gains of over 50 points. Similarly, widely followed index, Nifty, too creeping higher by quarter percent, ended past 5600 bastion. Broader indices, too luring traction, went home with gains of over 3/10 percent. Trade of over 1.5 lac core was done in terms of volume turn-over (Provisional)

On the global front, Asian stock markets concluded higher on Thursday after Chinese manufacturing data came out in expansionary territory, while further softening of the yen pushed Japanese shares to their highest level in more than six months. The main data point for Thursday was HSBC's preliminary Chinese manufacturing data for November. The purchasing managers index (PMI) for November came out at 50.4, compared with a final reading for October of 49.5, indicating an expansion for the first time in 13 months.  In addition, European shares extended a week-long rally on Thursday as manufacturing surveys in China and the United States re-instilled trader’s confidence over the global economic recovery.

Closer home, Capital Goods, Information Technology, Bankex counters, toppling investor’s buyer list, mainly lifted the barometer gauges higher. On the flip side, Oil & Gas, Consumer Durable (CD) and Auto counters enticing massive profit-booking, turned out to be top laggards. Banking stocks beefed up gains on hopes the winter session of parliament will pass bills to liberalize the insurance, pension and banking sector. While, state run public bank and also index heavyweight, State Bank of India (SBI) scooped up gains on likely capital infusion. Banking Secretary reported that the State Bank of India would get funds under capital infusion plan. Further, telecom stocks, namely, Reliance Communication, Bharti Airtel, Idea Cellular and MTNL, rang-loud after Planning Commission Deputy Chairman Montek Singh Ahluwalia, a week after flop 2G spectrum auction, accepted that it was a mistake to fix such a high reserve price for the 2G spectrum auction, which kept leading telecom companies away from the bidding. Additionally, Metal stocks too were sparkling with gains encouraged by World’s largest metal consumer - China’s good economic report. Furthermore, depreciating Rupee provided strength to software companies. On the flip side, shares of drug-makers dipped on speculation the government's final decision on the pricing policy for the sector might be more disruptive than expected. As per reports, Panel of ministers agreed to settle on a market-based pricing mechanism, as expected, but capping drug prices at a simple average price of brands as opposed to the initial proposal of using a weighted average, a move if implemented would be negative for the sector. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1400:1376 while 154 scrips remained unchanged. (Provisional)

The BSE Sensex gained 54.50 points or 0.30% and settled at 18514.88. The index touched a high and a low of 18567.68 and 18456.20 respectively. 14 stocks were seen advancing and 16 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.27% while Small-cap index was up by 0.35%. (Provisional)

On the BSE Sectoral front, IT up 1.08%, CG up by 1.07%, TECk up by 0.96%, FMCG up 0.57% and PSU up by 0.56% were the gainers, while Oil & Gas down by 0.52%, Auto down by 0.31%, CD down by 0.30% and Realty down by 0.06% were the only losers in the space.

The top gainers on the Sensex were L&T up 1.92%, SBI up by 1.76%, Infosys up 1.68%, NTPC up 1.36% and ITC up 1.33%, while, Tata Motors down by 2.62%, ICICI Bank down by 1.13%, RIL down by 0.76%, Cipla down by 0.74% and Sun Pharma down by 0.62% were the top losers in the index. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty on Nov 21 maintained that while high interest rate was not alone responsible for the economic slowdown, high inflation was ‘definitely’ one of the reasons for the slow economic growth. Further, he also reiterated that inflation would have to ease further for interest rates to be eased.

The remarks assume significance in the backdrop of the widening overhang between the Finance Ministry and the RBI over the issue of reducing lending rates. Highlighting that lower core inflation was essential for tackling trade deficit, he said ‘trade deficit, can be tackled only if core inflation is brought down to 1 per cent.’ Core inflation is currently running at 5 per cent. However, he further underscored that slowdown in the growth is for a variety of reasons. To that extent monetary policy is not able to control the inflation and not effective, hence it is responsible.

India’s WPI inflation rate in October eased to 7.45 percent in October 2012 (over October, 2011) as compared to 7.81 percent (Provisional) for the previous month and 9.87 percent during the corresponding month of the previous year. Meanwhile, poor showing by the manufacturing sector pulled down the GDP growth to 5.5 percent in the first quarter, the decade's worst Q1 performance, prompting the government to press for quick decisions to boost investments.

Separately, urging banks should not to shy away from giving loans to productive sectors, Chakrabarty reiterated that ‘on account of NPA fear, banks should not stop lending but must improve their credit management capability for which there is enough room’, he said, adding, banks need to pay more attention to the credit needs of agriculture, SME and retail.

India VIX, a gauge for markets short term expectation of volatility lost 3.55% at 14.91 from its previous close of 15.46 on Wednesday. (Provisional)

The S&P CNX Nifty gained 12.95 points or 0.23% to settle at 5,627.75. The index touched high and low of 5,643.35 and 5,608.00 respectively. 27 stocks advanced against 23 declining ones on the index. (Provisional)

The top gainers on the Nifty were Grasim was up 2.29%, L&T up 1.87%, SBI up 1.80%, HCL Tech up 1.70% and NTPC was up 1.67%. On the other hand, Tata Motors down 2.79%, Siemens down by 2.12%, Ultra Cement down by 1.80%, ICICI Bank down by 1.29% and IDFC down by 1.17% were the top losers. (Provisional)

The European markets were trading in Green with, France’s CAC 40 up by 0.38%, Germany’s DAX up by 0.72% and the United Kingdom’s FTSE 100 up by 0.43%

Most Asian markets went home with green mark on Thursday, amid advancing Chinese manufacturing data, which expanded for the first time in more than a year last month. Hang Seng index ended with strong gains, pulled by Hong Kong-listed firms linked to China’s economic health. Moreover Japan’s Nikkei closed higher after touching 7-month high, due to yen’s ongoing weakness which continued to boost exporters. Furthermore, Seoul shares gained on hopes that the Greek crisis will be resolved despite the IMF and EU ministers delaying the decision on granting further aid to debt-stricken Greece until next week.