Post session - Quick review

Benchmark equity indices, snapped the last trading session of January month on lackluster note, however, markets for the monthly F&O series accumulated gains of over 3%. Markets after getting a negative start in the choppy session of trade, marked by high volatility, losing steam settled with a cut of over half a percent. Although some gains did seep through in the early morning deals, nevertheless, profit-booking which crept in the second half session of trade, evaporated them all. The mood was dampened by weakness in global cues and the outcome of Cabinet Committee on Investment (CCI) meet on Wednesday, which failed to clear stalled projects.  Sentiment were also hit for the worst after country’s FY12 GDP growth was revised to 6.2 percent from 6.5 percent. While, the government pegged FY12 gross domestic savings at 30.8 percent, down from 34 percent earlier. Thus, in the final F&O expiry session, benchmark 30 share index, Sensex, on BSE, plunging over century of points settled below the 19,900 mark. In the similar way, 50 share index, Nifty, too declining over quarter of a percent, settled sub 6050 bastion. However, broader indices ended mix, with Midcap index ending with gains of over half a percent and Smallcap index ending a little below its neutral line. For the F&O series, CNX Midcap index ended lower by 0.50%, while BSE Smallcap index ended with a sharp cut of over 3%.

On the global front, Asian markets suffered broad losses on Thursday, bringing a solid month of gains for most regional equities to an end, as investors reacted to a weak set of earnings reports and downbeat economic data from the U.S. The session’s broad losses came as U.S. stocks retreated from five-year highs overnight, after the Federal Reserve said economic activity had paused in recent months. News of an unexpected contraction for the U.S. economy in the fourth quarter also weighed on sentiment. Moreover, European shares fell on Thursday as investors digested mixed earnings reports, with a warning from AstraZeneca knocking its shares while Ericsson surged after fourth-quarter results.

Closer home, plunge of index heavyweight, ICICI Bank, too added to the selling pressure. Shares of private sector lender, ICICI bank, slumped after hitting its highest since November 16, 2010, on profit-taking after the bank posted a forecast-beating 30.2 percent rise in third quarter net profit. India's largest private lender, reported a 30 per cent year-on-year jump in net profit for the fiscal third quarter on Thursday, beating estimates. However, even Punjab National Bank’s Q3 earnings thrilled markets, besides Union Bank of India result. Aided by lower provisions against bad loans, India's second largest public sector lender Punjab National Bank (PNB) reported a 14% year-on-year rise in its third quarter net profit at Rs 1,306 crore, which in turn sent the stocks higher over 9%.

However, drubbing of Bankex, Information Technology and Oil & Gas stocks, also added to the downside pressure of the bourses. Rupee appreciation to three and half month level, mainly spooked the play of IT firms, which derive major chunk of their revenue from exports. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 884:739while 1327 scrips remained unchanged. (Provisional)

The BSE Sensex lost 110.02 points or 0.55% and settled at 19894.98. The index touched a high and a low of 20008.83 and 19865.72 respectively. 11 stocks were seen advancing while 19 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.54% while Small-cap index was down by 0.11%. (Provisional)

On the BSE Sectoral front, Realty up by 1.38%, PSU up by 1.02%, Consumer Durables up by 0.61%, FMCG up by 0.60%, and Power up by 0.46%, while, Bankex down by 0.42%, Oil & Gas down by 0.42%, IT down by 0.26%, TECK down by 0.23% and Capital Goods down by 0.16% were the top losers on the index. (Provisional)

The top gainers on the Sensex were BHEL up by 2.72%, Gail India up by 1.56%, ITC up by 1.45%, Sun Pharma up by 1.14% and Hero MotoCorp up by 1.07%. On the flip side, Tata Power down by 2.37%, ICICI Bank down by 2.16%, Bharti Airtel down by 1.81%, HDFC Bank down by 1.78% and L&T down by 1.41% were the top losers on the Sensex. (Provisional)

Meanwhile, worried over the country's ballooning Current Account Deficit (CAD), the Reserve Bank of India (RBI) said future decisions on monetary easing will not only be driven by the inflation trajectory but also by the widening CAD. RBI governor D Subbarao in the customary post-policy conference call said ‘we will take into account what the CAD is. Monetary easing will not be driven just by inflation numbers or the inflation trajectory’.

As per the RBI governor, the CAD has not only implications on macroeconomic situation but also on the price situation, inflation movement and therefore for monetary policy. It will be difficult to say that monetary policy will just look at inflation numbers and remain blind to all other variables.

Further, Subbarao added that we take into account external sector developments including the size of CAD and the composition of CAD into the monetary policy action but do not target any CAD number. By adding further, he said that the apex bank wants CAD to come down from the present high level of 5.4 percent and that will depend on a number of policy actions and not just the monetary policy.

During the third quarter monetary policy, the RBI slashed its repo rate by 25 basis points at 7.75% against 8% earlier and also cut cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25% to 4.0% of their net demand and time liabilities (NDTL) effective the fortnight beginning February 9, 2013. However, the RBI governor sounded hawkish on more rate cuts, flagging his concerns on the widening CAD.

Meanwhile, the country's CAD touched a record high of 5.4 percent of GDP or $22.3 billion in the July-September quarter on account of higher outflows and decelerated growth in net export of services. Declining for the eighth month in row, exports contracted by 1.92 percent to $24.8 billion in December, widening the country's trade deficit to $17.6 billion for the month.

India VIX, a gauge for markets short term expectation of volatility lost 1.73% at 14.13 from its previous close of 13.88 on Wednesday. (Provisional)

The S&P CNX Nifty lost 22.15 points or 0.37% to settle at 6,033.60. The index touched high and low of 6,058.05 and 6,025.15 respectively. 25 stocks advanced against 25 declining and one remains unchanged on the index. (Provisional)

The top gainers of the Nifty were PNB up by 10.24%, Bank of Baroda up by 4.11%, BHEL up by 3.16%, DLF up by 2.60% and Lupin up by 1.20%.On the flip side, Tata Power down by 2.37%, HDFC Bank down by 2.08%, Bharti Airtel down by 2.06%, ICICI Bank down by 1.93% and Hindustan Unilever down by 1.52% were the major losers on the index. (Provisional)

The European markets were trading in red, France’s CAC 40 down by 0.56%, the United Kingdom’s FTSE 100 down by 0.49% and Germany’s DAX down by 0.31%.

Asian shares took a breather from the recent rallies and ended mixed on Thursday, after weak set of earnings reports and downbeat economic data from the U.S. Japan’s Nikkei went home with green mark amid positive factory output in December, while Taiwan closed higher as on posting its best growth in five quarters on improved demand for the island's electronics exports and stronger consumption. South Korea’s Kospi ended marginally lower on worries about the impact on the nation’s exporters as a weakening yen improved prospects for their Japanese counterparts.