Post session - Quick review

The new month F&O series was received well by Indian equity markets, which protracting winning streak for third consecutive session on Friday in light of tepid yet in line with street estimates, Q2 GDP numbers suggested that new found strength of bourses was here to stay. Underscoring little signs of an early turnaround, despite reform steps taken by the government to lure back investors, the Indian economy slowed down to 5.3 per cent in the July-September period of the current financial year (2012-13) compared with three year’s low figure of 5.5 per cent in the first quarter. Nevertheless optimistic comments by PMEAC’s chairman, C Rangarajan, who said that “It is a little lower. But I still believe the overall growth rate for the year will be between 5.8 and 6 per cent”, got the bulls berserk on the bourses. Further, even positive global development, fuelled the uptrend of bourses. In the so far CY12’s best session of performance , 30 share index, Sensex, puffed up over 3/4 points, to conclude past 19300 psychological level, with widely followed index, Nifty, too ending past 5850 crucial levels. Meanwhile, broader indices clearly stole the show, with both Midcap and Smallcap indices, too surged close to percent. On the BSE sectoral front, Metal, Power and Public Sector Undertaking counters, were the shining stars of the trade, on the flip side, Auto, Fast Moving Consumer Goods and Realty counters witnessed the brunt of profit-booking. For the week, Sensex and Nifty, both accumulated over massive 4%. In broader space, CNX Midcap index, too gained over 4%, while BSE Smallcap index, too ending with gains of over 3%. Trade of over 1.5 lac crore was done in term of volume turnover. (Provisional)

On the global front, Asian shares rose to a nine-month peak on Friday, helped by firmer global equities overnight, but flows were largely dictated by month- and year-end position-squaring, with investors taking profits on the rises and buying on dip. Investors were seeking incentives to trade from data out of Asian countries on Friday and Saturday which could offer signals for the likely direction of global economic growth, amid unclear prospects for the U.S. budget talks and the apparently abating risk of an imminent Greece bankruptcy. Further, the stocks also got an impetus after Japan’s Cabinet approved an economic stimulus package and industrial production unexpectedly increased. Meanwhile, European shares traded around multi-month highs on Friday in what looked to set to be a turbulent session against a backdrop of mixed signals about U.S. budget talks.

Back home, the BSE Sensex gained 168.99 points or 0.88% and settled at 19339.90. The index touched a high and a low of 19372.70 and 19186.30 respectively. 21 stocks advances against 8 stocks declines and 1 remain unchanged on the index (Provisional). The market breadth on the BSE was positive; there were 1656 shares on the gaining side against 1305 shares on the losing side while 127 shares remain unchanged.

The BSE Mid cap and Small cap indices rose 1.10% and 0.80% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 2.07%, Power up by 1.77%, PSU up by 1.70%, Bankex up by 1.46% and CD up by 1.40% while, Auto down by 0.32% and FMCG down by 0.24%was the only losers on the index.

The top gainers on the Sensex were BHEL up by 5.22%, Jindal Steel up by 5.13%, ONGC up by 4.47%, Sterlite Inds up by 3.47% and Tata Steel up by 2.52%.

On the flip side, Bajaj Auto was down by 1.77%, Hindustan Unilever was down by 1.09%, Maruti Suzuki was down by 0.97%, Coal India was down by 0.95% and Tata Motors was down by 0.72% were the top losers on the Sensex.

Meanwhile, alarming the urgency of politically difficult reforms to spur a revival in Asia's third- largest economy, India's gross domestic product (GDP) growth further slowed down to 5.3% in the second quarter (June-September) of 2012-13 compared with three year’s low figure of 5.5 per cent in the first quarter.  

Further, quarterly GDP at factor cost at constant (2004-05) prices for Q2 of 2012-13 came at Rs 12, 93,922 crore as against Rs 12, 28,982 crore in Q2 of 2011-12, showing an increase of 13.6 per cent.  The gross domestic product (GDP) had expanded by 6.7 percent in the same period of last fiscal. The economic growth in the first six month of this fiscal (April-September) stood at 5.4 percent, lower than 7.3 percent growth clocked in the year-ago period.

Growth was mainly dragged down by subdued manufacturing and farming output growth. During the three-month period ended September 30, the manufacturing sector grew marginally by 0.8 percent, against 2.9 percent growth in the same period of 2011-12. Further, farm sector output expanded by just 1.2 percent in the July-September period this fiscal against 3.1 percent in the same period last year. Meanwhile, for the other economic activities, the growth rate of electricity, gas and water supply dipped to 3.4 percent in the second quarter, from 9.8 percent witnessed in the corresponding period a year ago.

Further even growth rate of services sector, including insurance and real estate, slowed down at 9.4 percent in the second quarter, against 9.9 percent recorded in same quarter last fiscal. On the flip side, mining and quarrying sector, however, showed some improvement and recorded a growth of 1.9 percent during the quarter, as against a contraction of 5.4 percent in the second quarter of 2011-12. Additionally, construction sector expanded by 6.7 percent in Q2 of 2012-13, as against 6.3 percent in the year-ago period.

Meanwhile, the gross fixed capital formation (GFCF), a measure of investments, at current and constant (2004-05) prices during Q2 of 2012-13 are estimated at 30.6 per cent and 33.8 per cent, respectively, as against the corresponding rates of 30.9 per cent and 33.4 per cent, respectively in Q2 of 2011-12. In terms of GDP at market prices, the rates of Private Final Consumption Expenditure (PFCE) at current and constant (2004-05) prices during Q2 of 2012-13 are estimated at 58.3 per cent and 60.8 per cent, respectively, as against the corresponding rate of 57.8 per cent and 60.3 per cent, respectively in Q2 of 2011-12.

Battling with weak consumer demand in overseas and domestic markets, the economy’s growth figures although has come more or less in line with estimates, but are still stuck near three year low. The slowing economy has already battered government revenues, leaving the government scrambling for ways to balance the budget and avert a credit rating downgrade threatened by ratings agencies Standard & Poor's and Fitch. Further, this slump also makes it difficult for Prime Minister Manmohan Singh to fund flagship welfare programmes ahead of the general elections due in mid-2014.

India VIX, a gauge for markets short term expectation of volatility lost 1.43% at 15.15 from its previous close of 15.37 on Thursday. (Provisional)

The S&P CNX Nifty gained 54.85 points or 0.94% to settle at 5,879.85. The index touched high and low of 5,885.25 and 5,827.85 respectively.  40 stocks advanced against 10 declines on the index. (Provisional)

The top gainers of the Nifty were Ultratech Cement up by 5.49%, Jindal Steel up by 5.47%, BHEL up by 5.33%, ONGC up by 4.41% and IDFC up by 3.32%.

On the flip side, Ranbaxy was down by 1.73%, Hindustan Unilever was down by 1.66%, Tata Motors was down by 1.31%, Maruti Suzuki was down by 1.24% and Bajaj Auto was down by 0.89% were the top losers on the Nifty.

The European markets were trading in green with, France’s CAC 40 up by 0.14%, Germany’s DAX down by 0.28% and the United Kingdom’s FTSE 100 down by 0.10%.

Asian markets mostly climbed to end the week driven by month- and year-end position-squaring. Shanghai markets ended higher and set for their first gain this week after declining to their lowest in nearly four years earlier in the week, while Hong Kong shares closed up after touching 19 months high. Meanwhile, Japan's Nikkei went home with gains registering its best month since February with a 5.8% gain.