Benchmarks continue to trade sanguine post inline estimates Q2 GDP data

Animal spirit continues to prevail at D-street, with barometer gauges trading sanguine and oscillating around intra-day high level thanks to sustained buying by funds and retail investors after India’s economic growth came in line with street estimates at 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, positive global set-up also continues to the fuel the newly found strength of bourses in previous two consecutive sessions. In the session, marking the start of new month F&O series, 30 share index, Sensex, gaining over 100 points, is trading above  crucial 19300 level and 50 share index, Nifty, too trading above the mental 5850 level. Undoubtedly, steeling the show is broader space, both Midcap and Smallcap index, ruling close to percent. Although rally is broad based, stocks from Metal, Power and Public Sector Undertaking counters are the main gainers on BSE sectoral front. On the flip side, defensive Fast Moving Consumer Goods counters are acting as the sole spoil sport.

On the global front, Asian pacific shares have hit a nine-month peak on Friday, as firmer overnight global equities created an upbeat tone, but flows were largely driven by month- and year-end position-squaring, with investors taking profits on the rises and buying on dips. Meanwhile, European stock futures were little changed as investors awaited a report on American consumer spending.

Back home, the BSE Sensex is currently trading at 19326.72, up by 155.81 or 0.81% and has touched a high and a low of 19332.35 and 19186.30 respectively. There were 23 stocks advancing against 7 declines on the index.  The market breadth on the BSE was positive; there were 1567 shares on the gaining side against 1038 shares on the losing side while 130 shares remain unchanged.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 1.18% and 0.91% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.84%, Power up by 1.64%, PSU up by 1.31%, Oil & Gas up by 1.25% and Bankex up by 1.13% while, FMCG down by 0.21% was the only losers on the index.

The top gainers on the Sensex were BHEL up by 4.41%, Sterlite Inds up by 3.85%, Jindal Steel up by 3.55%, ONGC up by 3.37% and Tata Steel up by 2.45%.

On the flip side, Hindustan Unilever was down by 1.09%, Coal India was down by 1.08%, Bajaj Auto was down by 1.01% , Maruti Suzuki was down by 0.50% and HDFC Bank was down by 0.23% 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.

The S&P CNX Nifty is currently trading at 5,870.85, up by 45.85 points or 0.79% and has touched a high and a low of 5,872.00 and 5,827.85 respectively. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were BHEL up by 4.79%, IDFC up by 4.04%, Jindal Steel up by 3.70%, ONGC up by 3.43% and Hindalco up by 2.05%.

On the flip side, Ranbaxy was down by 1.98%, Coal India was down by 1.32%, Hindustan Unilever was down by 1.17%, ACC Cement was down by 1.15% and Bajaj Auto was down by 0.88% were the top losers on the Nifty.

Most of the Asian markets were trading in green; Shanghai Composite was up by 0.76%, KLSE Composite up by 0.30%, Taiwan Weighted was up by 1.02%, Nikkei 225 gained 0.48%, Straits Times gained 1.09%, and Hang Seng was up by 0.69%.

On the other hand, Jakarta Composite was down by 0.68% and Seoul Composite down by 0.10% were the only losers of Asian pack.