Post session - Quick review

It turned out to be lackluster session of trade, whereby benchmark equity indices in absence of any trigger, went on unwinding two session’s hard work, to shut shop with cut of close to a percent. Massive profit-booking, which took centre of the stage amidst negative global set-up, after two straight days of gains, mainly activated the snoozing bears. Further, absence of buying interest near intermediate resistance level, led to 30 share barometer index, Sensex to end sub crucial 19800 psychological level, while 50 share index, Nifty, showcasing bit of resilience managed to end above 6000 bastion. However, the session turned out to be worse for broader indices, which witnessed nasty blow of over a percent.

Much of the pressure was exerted from the stocks belonging to rate sensitive, Auto, Bankex and Realty and high beta Metal counters, which languishing at the bottom, emerged as top losers on BSE sectoral front. Sentiment mainly took a hit after RBI Governor's hawkish statement, who despite acknowledging the sagging pace of economic growth, claimed that there was no room for fiscal and monetary stimulus, which consequently dashing rate cut hopes, came down heavily on rate sensitive stocks.

On the global front, Asian shares erased modest gains to edge lower on Wednesday as cautious investors waited for more clues about the global growth outlook, while a pause in the yen's declines spurred profit taking in Japanese equities after their recent rally. Additionally, Europe's top shares were trading lower on Wednesday as investors continue to consolidate gains with indexes around mutli-month highs and near technically 'overbought' territory, while sovereign risks remain a cloud on the horizon.

Closer home, sentiment also soured with the drop of result announcing stock, Bajaj Auto. The shares of India’s second largest two-wheeler, dropped after reporting almost 100 basis point (bps) drop in operating margin for the third quarter ended December 2012 (Q3) as compared to the previous corresponding period. However, the company has reported 2.96% rise in its net profit at Rs 818.74 crore for third quarter ended December 31, 2012 as compared to Rs 795.19 crore for the same quarter in the previous year.

Some selling pressure also came in from selling in retail stocks like Provogue India, Shoppers Stop, Trent and V2 Retail as Fitch Group maintained a negative outlook on the Indian retail sector for 2013, saying that slowdown has started hurting retail sector due to waning consumption owing to rising inflation and other macroeconomic factors.  Auto stocks also succumbed to selling pressure on account of colossal losses in Bajaj Auto, Tata Motors and Maruti Suzuki. Shares of Tata Motors plummeted by 3% after the company's global sales in December 2012 declined by 13.88 percent to 98,968 units against 114,920 units sold during the corresponding month in 2011. Only Oil & Gas counter emerged to the sole gainer on BSE sectoral space. Index heavyweight, Reliance Industries, gains of over 1% ahead of Q3 earnings on Friday, mainly spurred buying in Oil & Gas counters. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 931:2008 while 122 scrips remained unchanged. (Provisional)

The BSE Sensex lost 184.22 points or 0.92% and settled at 19802.60. The index touched a high and a low of 20009.36 and 19783.02 respectively. 5 stocks were seen advancing while 24 stocks were declining and one remain changed on the index (Provisional)

The BSE Mid cap and Small cap indices decline 1.33% and 1.22% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas was up by 0.36% was the sole gainer, while Auto down by 2.33%, Metal down by 2.05%, Bankex down by 1.76%,  Realty down by 1.43% and Capital Goods down by 1.27% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 1.27%, RIL up 1.20%, TCS up by 0.66%, NTPC up by 0.32% and ITC up by 0.04%, while, Hindalco Industries down by 4.38%, Maruti Suzuki down by 3.30%, Jindal Steel down by 3.21%, Tata Motors down by 3.16% and Mahindra & Mahindra down by 3.06% were the top losers in the index. (Provisional)

Meanwhile, Urging for a rate cut from Reserve Bank of India (RBI) in its next monetary policy review scheduled on January 29, leading bankers met RBI top brass, impressing upon them to shift focus of next monetary policy towards growth by reducing the repo rate and the cash reserve ratio by 0.5 percent. Currently, CRR stands at 4.25 percent and repo rate at 8 percent.

In its customary pre-policy meeting with RBI officials, bankers said ‘growth is the bigger concern than inflation and at this point of time it was our recommendation that there should be a rate cut so that growth comes first. By adding further they said, banks would reduce interest rates, if RBI cuts policy rates in the coming policy.

According to bankers, the reductions in rates will send positive signal in the market by increasing the investment, which would boost credit growth. Bankers also raised concerns regarding sluggish deposit growth along with low credit uptake, which is hovering around 8 per cent now. Further, bankers are also concerned about rising bad assets in the system, which is also deteriorating the credit profile of banks.

Expectations for a rate cut picked up pace this week after the release of December headline inflation data. Slowing down to a three year low level, the wholesale price index (WPI), India's main inflation gauge, unexpectedly cooled down to 7.18% (Provisional) for the month of December, 2012 as compared to 7.24% for November and 7.74% during the corresponding month of the previous year. Further, the rate cut hopes also gathered steam after RBI, in a clear signal said that the focus of the monetary policy will now shift to growth, in the ‘Mid-Quarter Monetary Policy Review: December 2012.’

India VIX, a gauge for markets short term expectation of volatility gained 3.01% at 13.99 from its previous close of 13.58 on Tuesday. (Provisional)

The S&P CNX Nifty lost 58.75 points or 0.97% to settle at 5,997.85. The index touched high and low of 6,055.95 and 5,992.05 respectively. 7 stocks advanced against 43 declining ones on the index. (Provisional)

The top gainers on the Nifty were HCL Tech was up by 1.64%, Reliance up by 1.52%, Dr Reddys Lab up by 1.19%, Power Grid up by 1.04% and TCS was up by 056%. On the other hand, Hindalco Industries down by 4.26%, Reliance Infrastructure down by 3.91%, JP Associat down by 3.53%, TATA Motors down by 3.44% and Jindal Steel & Power down by 3.19% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down by 0.36%, Germany’s DAX down by 0.29% and the United Kingdom’s FTSE 100 down by 0.53%.

Asian markets ended mostly lower on Wednesday as investors were cautious about the crucial economic data from China later this week. Japan’s Nikkei closed with its largest daily decline in eight months, reversing earlier session’s rally, as yen’s slide went into reverse. Meanwhile, Hong Kong market went home with a red mark, erasing some losses after Chief Executive Leung Chun-ying said the government will consider curbing demand from overseas for properties if the needs of locals aren’t met. China’s Shanghai Composite ended negative as a report showed the nation’s foreign direct investment declined for the first full year since 2009 as economic growth slowed and manufacturers relocated to markets with cheaper labor.