Post session - Quick review

Prolonging somber mood, benchmark equity indices once again put forth an appalling session of trade, this time, hurt by murky advance estimates of country’s economic growth rate amidst listless global cues. After getting flattish to negative start, benchmark equity indices  recovering losses did bounce-back in green territory in early deals, but all the efforts were rendered futile after the Central Statistical Office (CSO) in the advance estimates shockingly pegged country's Gross Domestic Product (GDP) growth rate for the current fiscal year to 5%, way lower than the government’s downward revision to economic growth for fiscal 2011-12, in the previous month to 6.2% from the earlier estimate of 6.5%, in fact worst of all growth projections issued by the government and Reserve Bank of India (RBI). Frontline equity indices, systematically post that, lost ground and halted only a little above-day’s lowest level. 

Thus, clocking sixth straight session of loss, 30 share barometer index, Sensex, lost over quarter of a percentage to shut shop sub crucial 19600 psychological mark. While, Nifty, declining for five out of six consecutive session of trade, after managing to negotiate a flattish close  in the previous session, settled with loss of over 2/10 points, to end  below the crucial 5950 psychological level. Trade turned out to be more brutal for broader indices, which ended with loss of close to a percent.

On the global front, Asian shares ended lower on Thursday, marking time ahead of a European Central Bank policy decision and remarks from ECB President Mario Draghi on prospects for the euro zone economy. Trade ended on a somber note as Investors took a break from selling the yen, which weighed on Japanese equities after the market jumped to a four-year peak in the previous session. On the other hand, European shares, stabilizing after sharp losses in the previous session, were little changed on Thursday, as strong updates from heavyweights including Statoil helped offset rising political concerns in the euro zone.

Closer home, sentiment also took a hit for the worst after some report suggested that country's economic growth likely to have eased further to around 4.8% in the quarter ending in December, mainly as a result of deep cuts in government spending. Further, drubbing in Consumer Durable, Realty and Power counters, also added to the downside pressure of the bourses. However, Information Technology and Auto counters, turned out to be the only yielding pockets in today’s trade to end with gains of close to half a percent.

Further, pressure also crept from upstream oil marketing companies, such as ONGC and Cairn India, which ended in red. The subsidy burden of ONGC, India’s biggest oil explorer, is set to cross Rs 50,000 crore this fiscal - the highest ever. Going by company officials, as of end-December, ONGC has already parted with more than Rs 37,000 crore from its reserves and cash flows towards this. Additionally, decline of gold firms, namely Manappuram Finance and Muthoot Finance shares also weighed on the sentiment. Shares of two gold loan firms capitulated to selling pressure after the central bank proposed to limit import of gold into India, which putting pressure on India's current account is threatening the country's sovereign credit ratings. Further, most of the cement shares too ended lower, barring the ACC stocks.

However, some sense of relief came in with the results of Apollo Hospitals Enterprises, which spurted over 3% on reporting 24.73% rise in its net profit at Rs 80.64 crore for third quarter ended December 31, 2012 as compared to Rs 64.65 crore for the same quarter in the previous year. Additionally, CEAT Q3 numbers too calmed some investor’s nerve, after the company reported over seven fold jump in Q3 net profit. Moreover, ACC too spurted over a percent registering in line with estimates 49.15% fall in its net profit of Rs 239.22 crore for the quarter as compared to Rs 470.44 crore for the same quarter in the previous year. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 836: 777 while 1350 scrips remained unchanged. (Provisional)

The BSE Sensex gained 59.40 points or 0.30% and settled at 19580.32. The index touched a high and a low of 19702.56 and 19540.08 respectively. 12 stocks were seen advancing while 18 stocks were declining on the index (Provisional)

The BSE Mid cap and Small cap indices decline 0.88% and 1.34% respectively. (Provisional)

On the BSE Sectoral front, IT up by 0.63%, Auto up by 0.30% and FMCG up by 0.03%, while Consumer Durables down by 3.34%, Realty down by 1.47%, Power down 1.39%, Metal down by 1.16 and Capital Goods down by 1.12% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.31%, TCS up by 1.17%, Tata Motors up by 1.00%, Coal India up by 0.96% and HDFC up by 0.89%, while, Sterlite Industries down by 3.11%, NTPC down by 3.02%, Gail India down by 2.47%, Cipla down by 2.32% and Bharti Airtel down by 2.28% were the top losers in the index. (Provisional)

Meanwhile, the International Monetary Fund (IMF) has said that Indian economy may post a more-than-expected fall in its economic growth to 5.4 percent in 2012-13, but it should pick up to six percent in the next financial year. While, releasing its annual country report, IMF said that ‘In 2011-12, India's growth rate was 6.5 percent. That figure is expected to drop to 5.4 percent in 2012-13. Despite the poor outlook for the global economy, this is a far larger drop than might be expected’.

As per the IMF report, India's economic growth has slowed down due to structural, cyclical, supply side and global factors, while the inflation remains at elevated levels. Elaborating the reasons for the economic slowdown, IMF said that the use of countercyclical fiscal or monetary policy is inappropriate for India. Further it added that the government has already moved to lower fuel subsidies, which disproportionately benefits richer people. In the prevailing economic slowdown, falling infrastructure and corporate investment are now sweeping to exports and private consumption, it added.

Cautioning about the financial sector, IMF report stated that the number of non-performing loans has risen recently and due to the current economic slowdown this trend will continue for some time. Further, to push this sector towards growth in the long run, it recommended the need of financial reforms like lowering government-mandated purchases by banks of government debt and corporate bond market. 

Regarding the 12th five year plan (2012-17), IMF said that reforms taken in plan to facilitate investment especially in infrastructure together with lower costs to do business, are key to restoring high growth. However, IMF praised the recently taken measures by the government and said that in recent months, the authorities have taken steps to reverse the slowdown, which have led to improved market sentiment.

India VIX, a gauge for markets short term expectation of volatility gained 4.41% at 14.89 from its previous close of 14.26 on Wednesday. (Provisional)

The S&P CNX Nifty lost 17.55 points or 0.29% to settle at 5,941.65. The index touched high and low of 5,978.50 and 5,927.60 respectively. 18 stocks advanced against 31 declining and one stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Power Grid was up by 2.42%, IDFC up by 1.75%, Mahindra & Mahindra up by 1.37%, ACC up by 1.19% and TCS was up by 1.13%. On the other hand, Reliance Infrastructure down by 4.63%, Sesa Goa down by 3.01%, Bank of Baroda down by 2.94%, Ambuja Cements down by 2.84% and NTPC down by 2.70% were the top losers. (Provisional)

The European markets were trading in green; France’s CAC 40 added 0.41%, Germany’s DAX rose 0.30% and United Kingdom’s FTSE 100 edged higher by 0.26%.

Most Asian stock markets ended lower ahead of release of economic data from China on Friday. Japan’s Nikkei went home with red mark reacting to a slight strengthening in the yen against U.S dollar. Investors were traded cautiously ahead of European Central Bank (ECB) policy decision and remarks from ECB president Mario Draghi on prospects for the euro zone economy. Shanghai shares closed the shutter on negative note taking a break after eight-day’s rising streak, as investors took some profits on Chinese financials after the central bank stressed the need to tackle inflation and speculative housing demand.

Taiwan Weighted was shut for the trade today.