Post session - Quick review

The start of the new F&O series turned out to onerous for Indian equity markets, which after getting a muted start, went on losing ground to end the last trading session of  the week with cut of over half a percent. Tepid macro-economic indicators mainly led to the drubbing of equity markets, which for the week ended with cut of over a percent each. Underscoring the risks to Asia's third largest economy from weak global demand, particularly in Europe, growth in Indian manufacturing slowed to a three month low of 53.2 in January against its previous reading of 54.7 in December. Additionally, contraction in the output of natural gas, coal and fertiliser too slowed down the growth of eight core sectors in December 2012 to 2.6%, which may have a bearing on the overall industrial production. Furthermore, sentiments also got hurt after India’s fiscal deficit for the first three quarters of the current financial year touched 78.8 per cent of the budget estimates (BE) of Rs 5.14 lakh crore for the entire financial year ending March 31, 2013.

Thus, on the last trading session of the week, 30 share barometer index, Sensex, tanked over 100 points to settle below the crucial 19800 level. In the similar way, 50 share index, Nifty, on the first trading session of new month F&O series, ended with cut of over half a percent, below its psychological 6000 bastion. Meanwhile, broader indices too shut shop on negative note.

On the global front, Asian shares negotiated a positive close on Friday, as investors remained optimistic about the Chinese economic outlook despite a mild disappointment over official data on the country's manufacturing sector. Several surveys on Friday suggested Asia's manufacturers face a challenging business climate in the coming months, with China's vast factory sector managing only a shallow rebound at the start of 2013 as feeble foreign demand dragged on sales. China's official PMI logged a reading of 50.4, easing from December's 50.6 and below forecasts for a nine-month high of 50.9. A separate private sector PMI released by HSBC, however, rose to a two-year high of 52.3. Moreover, most European stock markets rose on Friday, as encouraging Chinese data boosted investors’ appetite for assets perceived to carry higher risk, although Spanish stocks slumped after a short-selling ban was lifted.

Closer home, trade took a turn for the worst after the disappointing earnings in index stocks such as Bharti Airtel and Bharat Heavy Electricals, dampened investor’s sentiment. Bharti Airtel slipped 2% after posting disappointing set of numbers. Profit at Bharti Airtel, India's top mobile network operator, fell for the twelfth quarter in a row and missed estimates by a wide margin dragged down by higher costs.  Meanwhile,  BHEL plummeted over 1% on reporting 17.50% drop in Q3FY13 net profit at Rs 1181.85 crore as compared to Rs 1432.61 crore in the corresponding quarter previous year.

Sectorally, Realty, Bankex and Metal counters, were the worst performers on BSE. Profit booking was witnessed in banking stocks after the Reserve Bank of India proposed a steep rise in the provisioning requirement for loan restructuring to five per cent from April 1, against 2.75 per cent at present. Additionally, Auto pivotal too ended lower on unveiling January month’s number, which turned out to be mixed bag. On one hand, Maruti Suzuki gathered over 1% gain on reporting higher-than-expected sales for January. On the other, M&M edged lower on reporting 11% growth in its auto sales numbers which stood at 49503 units during January 2013 as against 44718 units during January 2012.

Oil Marketing companies stocks, viz, BPCL, HPCL and IOC, on other hand, were in top gear after Oil Minister M Veerappa Moily reiterated that diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation's most used fuel are completely wiped out. Additionally, Airline stocks, i.e, KFA, Jet Airways and SpiceJet ended well even as jet fuel prices were today hiked by 2%. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 799:784 while 1404 scrips remained unchanged. (Provisional)

The BSE Sensex lost 101.80 points or 0.51% and settled at 19639.34. The index touched a high and a low of 19966.69 and 19736.45 respectively. 12 stocks were seen advancing while 18 stocks were declining on the index (Provisional)

The BSE Mid cap and Small cap indices decline 0.06% and 0.21% respectively. (Provisional)

 On the BSE Sectoral front, Consumer Durables up by 1.86%, Health Care up by 0.75%, Oil & Gas up by 0.23%, Power up by 0.09% and Auto up by 0.09% while, Realty down by 1.21%, Bankex down by 0.78%, Metal down by 0.76%, TECk down 0.62% and Capital Goods down by 0.61% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 1.55%, Dr Reddys Lab up by 1.38%, Bajaj Auto up by 1.24%, Maruti Suzuki up by 1.19% and Coal India up by 1.10%. On the flip side, Bharti Airtel was down by 3.06%, ONGC down by 2.25%, Hindalco Industries was down by 2.03%, Sterlite Industries down by 2.02% and Hindustan Unilever was down by 1.70% were the top losers on the Sensex.(Provisional)

Meanwhile, after surging to six months high level in December, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to three months low of 53.2 in January against its previous reading of 54.7 in December, thereby underscoring the risks to Asia's third largest economy from weak global demand, particularly in Europe.

Slower expansion in new orders and power outages mainly slowed the growth momentum in the manufacturing sector. Despite that, Indian goods-producing sector has shown output growth advancement for the forty-sixth consecutive month. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years.

Meanwhile, the rise in the factory output, although solid, was the slowest recorded in three months amid evidence from the survey panel that ongoing issues with the supply of power had restricted growth (albeit to a lesser degree than seen at times during 2012).

New orders and export sales both increased at manufacturing companies in India in January. While, the volume of incoming new work at manufacturers in India increased in January. Total new business rose solidly, although growth eased from December. Meanwhile, new export orders increased for the fifth consecutive month, and also at a solid rate. The new orders sub-index in the survey, a reliable gauge of future output, slipped to 54.6 from 58 in December, showing the slowest pace of growth since October.

Further, January data signaled increased staffing level in the Indian goods-producing sector, amid reports of higher workloads. However, the pace of job creation was slight and unchanged from December.

Meanwhile, input and output prices both increased in January, with rates of inflation again marked. Input prices in the Indian manufacturing sector rose for the forty-sixth consecutive month with respondents indicating that fuel and raw material prices had increased, while Output charges were raised to protect margins in the face of higher costs. 

Nevertheless, the survey, which showed input and output prices rising at a slower pace during the month, suggests that India's inflation rate, which slowed to a three-year low of 7.18 per cent in December, is unlikely to change much, at least for now. 'Input and output price inflation continued to ease, albeit only gradually, supporting the case for the RBI's cautious policy rate cut earlier this week,' the report said.

 India VIX, a gauge for markets short term expectation of volatility lost 2.61% at 13.76 from its previous close of 13.39 on Thursday. (Provisional)

The S&P CNX Nifty lost 30.15 points or 0.50% to settle at 6,004.60. The index touched high and low of 6,052.95 and 5,983.20 respectively. 20 stocks advanced against 28 declining and 2 stocks remain unchanged on the index. (Provisional)

The top gainers of the Nifty were BPCL up by 2.96%, CIPLA up by 1.95%, Bajaj-Auto up by 1.47%, Maruti Suzuki up by 1.46% and Tata Power up by 1.43%. On the flip side, Jaiprakash Associates down by 4.14%, DLF down by 3.60%, Bharti Airtel down by 3.24%, Ambuja Cements down by 2.84% and Hindalco Industries down by 2.54% were the major losers on the index. (Provisional)

The European markets were trading in green with; France’s CAC 40 added 0.97%, Germany’s DAX gain 0.72% and the United Kingdom’s FTSE 100 edged higher by 0.61%.

Asian shares ended mostly higher on Friday as markets remained optimistic about the Chinese economic outlook despite a mild disappointment over official data on the country’s manufacturing sector. Chinese stocks rebounded from early weakness and went home with green mark on the back of rally in banking shares, while Hong Kong's closed lower, weighed by local Chinese companies. Japan’s Nikkei finished higher as the yen fell to multi-year lows against the euro and the U.S. dollar. Meanwhile, investors' focus now turns to the U.S. nonfarm payrolls report, which will likely show a rise of 160,000 jobs.