Post session - Quick review

Indian benchmark equity indices concluded last trading session of calendar year --2012 --on lackluster note, but bid adieu the year with gains of over 25%. In the range-bound session of trade, benchmark equity indices after trading listlessly for almost entire trading session, in absence of any positive trigger domestically, ended flattish with negative bias. Meanwhile, caution on concerns about the U.S. fiscal cliff, kept investor’s jittery of investing into risky asset class such as equities. However, this closing turned out of no surprise as most of the market-participants at D-street were expecting a dull session of trade since most markets across Asia and Western Europe were closed or were going to close early on the last day of Calendar Year 2012.

Even, in absence of any positive catalyst, 30 share barometer, Sensex, on BSE and 50 share widely followed index, Nifty, on NSE, settled above their crucial 19400 and 5900 bastions respectively, albeit with slender loss. Meanwhile, broader indices managing to keep their head above water for the entire trading session went home with gains of over quarter of percentage. For the year, CNX Midcap index and BSE Smallcap mustered massive gains of close to 30% each.

On the global front, most of the Asian markets, i.e., Indonesia, Japan, South Korea and Taiwan markets remained closed for trade, while the remaining one’s staged a mixed close. However, the advance in Shanghai came after HSBC's final reading of the China manufacturing Purchasing Managers' Index printed at 51.5, an upward revision from a preliminary measure of 50.9, marking an improvement over November's PMI of 50.5. Additionally, European shares were trading lower in the last session of the year on Monday as an impasse in US budget talks pushed the world's biggest economy to the edge of the 'fiscal cliff' of austerity measures that would curb global growth.

Meanwhile, back home, macro-economic data prompted some profit-booking at D-street. India's fiscal deficit during the April-November period was Rs 4.13 trillion, or 80.4 percent of the budgeted full fiscal year 2012/13 target, government data showed on Monday. However, during the same period in the previous fiscal year, the deficit was 85.6 percent of the budget target. In sector-specific activity, stocks from Realty, Consumer Durable and Public Sector Undertaking counters emerged as the top gainers, while defensive Fast Moving Consumer Goods and Health Counter combined with Capital Goods space turned out to be party poppers. Besides, Auto stocks managed to gain traction ahead of December sales data.

Despite volatile moves, the year 2012 has finally proved to be productive for the stock market with about 25 per cent appreciation in benchmark indices, but investors are looking forward to more stable times in 2013. For the coming year, implementations of key reforms, cut in interest rates, overhaul of tax regime and a stable global economy are some of the wishes that Dalal Street expects to come true.

For the session, the BSE Sensex lost 26.74 points or 0.14% and settled at 19418.10. The index touched a high and a low of 19491.58 and 19406.17 respectively. 15 stocks were seen advancing while 14 stocks were declining and 1 remained unchanged on the index (Provisional). The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1521:1354while 138 scrips remained unchanged. (Provisional)

The BSE Mid-cap index was up by 0.15% while Small-cap index was up by 0.48%. (Provisional)

On the BSE Sectoral front, Realty was up by 0.88%, PSU up by 0.59%, Consumer Durables up by 0.54% Power up by 0.51% and Auto up by 0.40% were the only gainers, while Capital Goods down by 0.43%, FMCG down by 0.32%, TECk down by 0.13%, IT down by 0.08% and Oil & Gas down by 0.07% were the top losers in the space.

The top gainers on the Sensex were Tata Power up by 1.33%, Wipro up 1.19%, Tata Motors up 1.03%, Hindalco Industries up by 1.00% and Gail India up 0.94%, while, ITC down by 0.93%, L&T down by 0.91%, Maruti Suzuki down by 0.74%, HDFC down by 0.61% and Sun Pharma down by 0.59% were the top losers in the index. (Provisional)

Meanwhile, providing additional time to some banks that need to enhance their capital base, the Reserve Bank of India (RBI) has rescheduled the start date for implementation of Basel III, the global capital norms for banks, by three months to April 1, 2013 from January 1, 2013. The norms are to be implemented in a phased manner by March 31, 2018.

Further, RBI giving out no other reason for the delay would align the introduction of the rules with the start of the country's tax year, which runs from April to March. It would also closely monitor the progress on Basel III implementation in other countries, particularly the major ones, who are the members of the Basel Committee.

These guidelines, which were floated back in May, envisages scheduled commercial banks (excluding LABs and RRBs) operating in India to maintain a minimum total capital (MTC) of 9 per cent of total risk weighted assets (RWAs) as against a MTC of 8 per cent of RWAs as prescribed in Basel III rules text of the BCBS (Basel Committee on Banking Supervision), which is also higher than the international norm of 8%.

However, the RBI Governor D Subbarao, back in September reported that the government will have to infuse Rs 90,000 crore in state-run banks in the next five years, if the Centre fails to scale down their holding in these entities to 51%. Underscoring that both public and private banks together need an additional capital of Rs 5 trillion (Rs 5 lakh crore) by March 31, 2018 to comply with the Basel III regulations, the governor stated, 'the government, in order to maintain majority shareholding under the Basel III, will have to infuse Rs 90,000 crore into the state-run banks, which in light of precarious fiscal position would be a tall task. Out of Rs 5 trillion additional capital requirements, banks would require Rs 1.75 trillion as total equity capital, and the remaining Rs 3.25 trillion as non-equity capital of Rs 3.25 trillion.

Further towards this development, the Basel Committee, on December 14, reported that it would be incorporating all the transitional deadlines in line with the original global agreement, even where they have not been able to meet the January 1, 2013 start date. Eleven member jurisdictions, including India, had finalised Basel-III regulations effective from January 1, 2013, while seven others, including the European Union and the United States, published the final set of Basel III regulations effective from the start date of January 1, 2013. While, seven other jurisdictions including the European Union and the US have issued draft regulations, and have indicated that they are working towards issuing final versions as quickly as possible.

India VIX, a gauge for markets short term expectation of volatility gained 9.68% at 14.95 from its previous close of 13.63 on Friday. (Provisional)

The S&P CNX Nifty lost 8.70 points or 0.15% to settle at 5,899.65. The index touched high and low of 5,919.00 and 5,897.15 respectively. 27 stocks advanced against 22 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Punjab National Bank up 3.35%, DLF up 2.18%, ACC up 1.60%, GAIL up 1.20% and Power Grid Up by 1.19%. On the other hand, HCL Tech down 1.37%, ITC down by 1.11%, TCS down by 1.08%, IDFC down by 0.98% and L&T down by 0.93% were the top losers. (Provisional)

The European markets were trading mixed with, France’s CAC 40 up by 0.29% While the United Kingdom’s FTSE 100 down 0.48%. Germany’s DAX is close for the day.

Asian markets made a mixed closing on the final day of year 2012, though all the indices were not trading and some had a short trading session on the New Year eve, but there was cautiousness across the globe regarding the US fiscal cliff and they even overlooked encouraging Chinese manufacturing data. The HSBC manufacturing purchasing managers' index rose to 51.5 in December from 50.5 in November. Total new orders increased at the quickest pace since January 2011 despite a fall in new export orders. China's Shanghai Composite index rallied over one and half a percent to its highest level since June 20.

The financial markets in South Korea, Japan, Taiwan and Indonesia were closed for public holidays, while Hong Kong traded for half day.