Post session - Quick review

Barometer gauges retreating from two year’s high levels, hit in the early deals, snapped three day’s gaining trajectory of Indian equity markets on Tuesday. Bout of profit-booking witnessed at higher resistance levels pounded benchmark equity indices brutally, thereby leading to colossal cut of over half a percent. Across the board selling pressure amidst negative global cues, led to disappointing session of trade at D-street.

Losing steam gradually, 30 share barometer index, Sensex, lost over century of points to conclude sub the crucial 20k level. However, widely followed index, Nifty, despite succumbing to selling pressure, held onto 6000 level by the close of trade. Both 20,100 (Sensex) and 6100(Nifty), turned out to be stiff resistance levels. Additional, broader indices too undergoing vicious torment, ended with cut of close to a percent.

Disappointing Q3 earnings of FMCG major, Hindustan Unilever (HUL), too triggered position squaring. FMCG major Hindustan Unilever (HUL) disappointed the street on all parameters with the net profit growing 15.5 percent year-on-year to Rs 871 crore in the third quarter of financial year 2012-13. Not only company reported lower than expectation volume growth at 5 percent, the company reported an exceptional loss at Rs 7.3 crore for the October-December quarter.

On the global front, Asian pacific shares ended mostly lower on Tuesday, after the Bank of Japan announced the results of its latest policy meeting. The spotlight in Asia fell on the BOJ, which doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, surprising markets that had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending program. Additionally, European shares too were languishing in red terrain as investors awaited a cue from key U.S. earnings releases later in the day before attempting fresh push towards new 2-year highs.

Closer home, Government’s stint of hiking import duty on dore bars and ores to 5 percent from 2 percent, a day after increasing tax on processed yellow metal to 6 percent, weighing heavily on the Information Stocks (IT) and gold related companies such as Tribhovandas Bhimji Zaveri, P C Jewellers, etc, also soured the sentiment at D-Street. Software firms, such as TCS, Wipro, Infosys, which derive lion share of their revenue from exports, were battered down on Rupee appreciation thanks to hike in import duty, a move which is expected to decline gold purchases and rein-in a ballooning fiscal deficit. Additionally, banking shares also surrendered gains by close of trade. Citing concerns over asset quality and the high interest rates, Global ratings agency Moody's has maintained a 'negative' outlook on the country's banking system. 'In India, impaired loans are yet to peak among public sector banks,' Moody's said in its Asia-Pacific Banking Outlook. Although, none of sectoral gauge showcased resilience, Realty, Consumer Durable and Fast Moving Consumer Goods counter, led the BSE sectoral chart from behind. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 804:1099 while 1104 scrips remained unchanged. (Provisional)

The BSE Sensex lost 137.70 points or 0.69% and settled at 19964.12. The index touched a high and a low of 20156.86 and 19952.91respectively. 7 stocks were seen advancing while 23 stocks were declining and one remains unchanged on the index. (Provisional)

The BSE Mid cap index was down by 0.87% and Small cap index was down by 0.86%. (Provisional)

On the BSE Sectoral front, FMCG was down by 1.89%, Realty down by 1.78%, Consumer Durables down by 1.78%, Capital Goods down by 1.01% and IT down by 0.88% were the top losers, while there was no gainer.

The top gainers on the Sensex were Sun Pharma up by 1.57%, NTPC up by 1.51%, Jindal Steel up by 0.57%, Mahindra & Mahindra up by 0.41% and ONGC up by 0.30%, while, Hindustan Unilever down by 5.94%, Gail India down by 4.91%, Hindalco Industries down by 2.36%, TCS down by 1.48% and Tata Motors down by 1.33% were the top losers in the index. (Provisional)

Meanwhile, Citing concerns over asset quality and the high interest rates, Global ratings agency Moody's has maintained a 'negative' outlook on the country's banking system. 'In India, impaired loans are yet to peak among public sector banks,' Moody's said in its Asia-Pacific Banking Outlook. NPA rose to Rs 1.67 trillion in the quarter ended September 30, from Rs 1.13 trillion a year ago.

Further, the agency has underscored although the government is likely to remain supportive', room for the Reserve Bank  of India to act, by slashing lending rates, remains to be limited due to high inflation and the 'modest fiscal capacity.’

While a slowdown in the global economy has prompted many other central banks to support growth through monetary stimulus, the RBI has hitherto rebuffed calls for lower lending rates citing high inflation and the size of the fiscal deficit.

Meanwhile, the Moody's expect interest rates to fall during 2013, although remain higher than the rest of Asia. Highlighting that 94% of the banks it rates in Asia carry stable outlooks on their deposit ratings, Moody's said the negative outlook on specific banks mostly relate to India.

However, Moody’s in a report also stated that Indian banks are better off than those in Vietnam. The Vietnamese system is in much worse shape than India’s and there is a reasonably high probability that the government will need to step in and take measures to address the issue of high NPLs (non-performing loans), or face the negative economic consequences of a banking system that cannot support credit growth, Moody’s stated.

India VIX, a gauge for markets short term expectation of volatility gained 1.68% at 13.89 from its previous close of 13.66 on monday. (Provisional)

The S&P CNX Nifty lost 37.60 points or 0.62% to settle at 6,044.70. The index touched high and low of 6,101.30 and 6,040.50 respectively. 15 stocks advanced against 35 declining on the index. (Provisional)

The top gainers on the Nifty were Asian Paints was up by 2.96%, ACC up by 2.00%, NTPC up by 1.73%, Kotak Bank up by 1.57% and Sun Pharma was up by 1.53%. On the other hand, Hindustan Unilever down by 6.45%, GAIL down by 4.82%, HCL Tech down by 2.71%, Cairn down by 2.38% and Hindalco Industries down by 2.32% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down by 0.29%, Germany’s DAX down by 0.89% and the United Kingdom’s FTSE 100 down by 0.21%.

Asian equity markets ended mostly lower on Tuesday, after the Bank of Japan (BOJ) set a 2% inflation target and made an open-ended commitment to buy assets but delayed action on that pledge until next year. Japan’s Nikkei went home with red mark as the yen strengthened following the BOJ’s announcement, hurting exporters such as carmakers. Chinese shares closed in negative territory, paring gains after Beijing released data showing the economy grew faster than expected last year. However, Seoul closed higher, while Hong Kong was also barely changed.