Post session - Quick review

It turned out to be another session of consolidation for benchmark equity indices at Indian equity markets, which registering four consecutive session of losses, yet again failed to gain any steam on Wednesday. Concerns over RBI’s anti-inflationary stance in its upcoming monetary policy on December 18, owing to high CPI and IIP figures, mainly damped the sentiment at D-street. Annual rate of inflation, based on the consumer prices index (CPI) in India, which accelerated at the fastest pace in three months to 9.90 percent in November, 2012 combined with 16 months high IIP figures, mainly strengthened the case for RBI’s hawkish stance. Meanwhile, India’s index of industrial production (IIP), a key measure of industrial output, expanded at its fastest pace since June 2011 at 8.2% in October versus a contraction of 0.4% in September. Although markets showcased some fervor in the early afternoon deals after reports suggested government of reaching an agreement with the opposition for passing the banking amendment bill in parliament, which lifted the banking shares. However, the gains turning momentarily dragged benchmark equity indices into negative terrain due to overall gloomy sentiment on account of dampened rate cut hopes. Investors also squared off their position ahead of November wholesale price index data, which the Reserve Bank of India gives more weight to in setting policy than the relatively new consumer price index, is due for release on Friday. Infact much of damage, which came to the bourses in the last hour of trade, led to yet another session of downtrend. In the third session of the week, 30 share barometer index, Sensex, lost quarter percent, to shut shop below crucial 5400 bastion. Similarly, widely followed index, Nifty, too concluding near pre closing levels, ended sub 5900 mark. However, broader indices, buckled the trend, with BSE Smallcap index showing a degree of outperformance and finishing with gains of over quarter percent, while BSE Midcap index, managed to negotiate a flat close if not a positive one. Meanwhile, trade of over Rs 1.70 lac core was done in terms of volume turnover.

Positive global-set up failed to buoy the spirit at D- Street. Asian pacific shares climbed on Wednesday - with Japan, Hong Kong and Australia concluding near multi-month highs - helped by positive signs from both the U.S. and Europe, while investors shrugged off the launch of a missile by North Korea. Stocks across the region moved higher, as markets continued to focus on the latest developments related to the U.S. fiscal cliff. Reports suggested that President Barack Obama and House Speaker John Boehner made new offers on taxes and spending on Tuesday, adding to progress made during recent behind-the-scenes negotiations. Additionally, European shares edged higher in early trade on Wednesday, extending a steep three-week rally as investors bet the Federal Reserve will unveil a new round of bond-buying to support the U.S. economy. Closer home, stocks from Capital Goods, Public Sector Undertaking (PSU) and Metal counters witnessing nasty laceration, went home with loss of over half a percent, while stocks from Consumer Durables, interest sensitive-Information Technology and Oil & Gas counters mainly capped the losses of benchmark equity indices. However, banking shares ended down in red terrain on dampened rate cut hopes. Additionally, shares of public sector oil marketing companies too lost steam after reports suggested of government considering an option for raising the cap on the number of subsidised LPG cylinders available to households to nine per year.

The BSE Sensex lost 31.88 points or 0.16% and settled at 19355.26. The index touched a high and a low of 19478.79 and 19317.23 respectively. 9 stocks were seen advancing while 20 stocks were declining on the index, while 1 stock ended unchanged (Provisional)

The overall market breadth on BSE ended in the favour of declines which outnumbered advances in the ratio of 1498:1431, while 134 shares remained unchanged. (Provisional)

The BSE Mid-cap and Small-cap indices ended higher by 0.06% and 0.24% respectively (Provisional)

On the BSE Sectoral front, Consumer Durables up by 0.95%, Auto up by 0.94%, Information technology up by 0.38%, Technology up by 0.34% and Oil & Gas up by 0.31% while Capital Goods down by 0.99%, PSU down by 0.81%, Metal down by 0.71%, Power down by 0.65% and Bankex down by 0.32% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 2.57%, M&M up by 2.20%, Hero MotoCorp up by 1.92%, RIL up by 1.53% and Sun Pharma up 1.35%, while, HUL down by 2.65%, BHEL down by 1.98%, Gail India down by 1.67%, Jindal Steel down by 1.55%and ONGC down by 1.44% were the top losers in the index. (Provisional)

Meanwhile, bringing the much-needed relief to a battered economy, India’s index of industrial production (IIP), a key measure of industrial output, expanded at its fastest pace in 16 months at 8.2% in October versus a contraction of 0.4% in September. This is the highest growth that the IIP has touched since June 2011, when the indicator came in at 9.5%. The cumulative growth for the period April-October 2012-13 over the corresponding period of the previous year stands at 1.2 per cent. However, September output growth was revised down to a contraction of 0.7 percent from a contraction of 0.4 percent.

The industrial output has mostly remained sluggish in the previous few months, with an exception being August, as growth in all three sectors viz. mining, manufacturing and electricity remained subdued.

After staging contraction in the previous month, the manufacturing sector, which constitutes about 75.53 percent of industrial production, rose by 9.6 percent from a year earlier. Mining sector, which constitutes about 14.6 percent of industrial production, witnessed contraction of 0.1 per cent as against growth of 5.5 per cent in September. Further, growth in electricity sector too rose to 5.5 percent versus a 3.9 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 (-) 0.7%, 1.0% and 4.7% respectively.

Importantly, Capital goods output, a key investment indicator, snapping the declining trend, staged remarkable improvement of 7.5 percent in October, as against a massive contraction of 26.5 percent in October 2011. Consumer goods, too witnessed double digit expansion of 13.2% as against contraction of 0.3 per cent, driven by growth of Consumer durables and Consumer non-durables at 16.5% and 10.1% respectively.

However, many economists are attributing robust factory output growth in October to a weak statistical base from a year ago when it shrank 5 per cent, rather than an improvement in actual production. October of 2011 was a terrible time for the industry due to a contraction caused in the output primarily because Diwali fell in that month, which meant lesser number of working days. Most companies produced a lot for restocking in September for sales in the Diwali month. However, this time around Diwali fell around in November, with a lot of output actually being worked out in the month of October.

India VIX, a gauge for markets short term expectation lost 1.09% at 14.51 from its previous close of 14.67 on Monday. (Provisional)

The S&P CNX Nifty lost 10.80 points or 0.18% to settle at 5,888.00. The index touched high and low of 5,924.60 and 5,874.25 respectively. 17 stocks advanced against 33 declining on the index. (Provisional)

The top gainers on the Nifty were M&M up 2.18%, Bajaj-Auto up 1.96%, HeroMoto Corp up 1.93%, Reliance up 1.58% and IDFC was up 1.55%. On the other hand, Hindustan Unilver down 2.96%, BHEL down by 2.34%, Grasim down by 2.22%, Jindal Stell down by 2.13% and HDFC down by 1.89% were the top losers. (Provisional)

The most of the European markets were trading in green with, Germany’s DAX up 0.22% and the United Kingdom’s FTSE 100 up by 0.21%. On the other hand France’s CAC 40 was trading lower by 0.12% amongst European pack.

Tracking positive global markets, Asian shares ended higher on Wednesday amid hopes of a deal from US budget talks. Meanwhile, investors were expecting more stimulus measures from the Federal Reserve, when it ends its two-day policy meeting later in the day. Chinese markets went home with green mark ahead of annual Central Economic Work Conference, while Hong Kong’s market closed higher after hovering around a fresh 16-month high, as city's biggest mover Guoco Corp. was surged by 30.6%. Moreover, Japan’s Nikkei ended higher as some exporters supported by a weaker yen, while South Korea's Kospi closed shutter with green mark, after its largest constituent, Samsung Electronics continued to gain after rising 5.0% month on Tuesday.