Post session - Quick review

Prolonging the losing streak, benchmark equity indices witnessing relentless selling by funds and investors, not only snapped the session in red, but also the week, with a cut of over a percent. Mood at D-street remained somber a day after weak advance GDP Estimates, while investors also remained cautious ahead of the 2013/14 budget to be unveiled later this month, which is seen as a key test of commitments to shore up finance.

Although, benchmark equity indices picked up some pace in early deals, soon capitulating to selling pressure, halted only at day’s low, which led crack of over a quarter of percent. Underperforming the globe, both barometer index 30 and 50 share index, Sensex and Nifty, ended below 19500 and 5900 psychological levels respectively. Displeasingly Sensex, extending its declining momentum for seventh consecutive session of trade, registered longest losing streak since November 2011. Meanwhile, broader indices slipping deep and thick in red, concluded the session with loss of over and above half a percent in today’s trade and over 2.5% for the week.

On the global front, Asian pacific shares edged higher on Friday after China's trade data for January handily beat forecasts to underscore a recovery trend, but further uptrend remained capped by investors seeking to book profits before next week's Chinese new year holidays. Additionally, European shares rose on Friday after the European Central Bank rekindled expectations that it could again take the knife to interest rates. ECB President Mario Draghi levered the door to a rate cut back open on Thursday, saying the bank would monitor the potential downward pressure of a strengthening euro on already near-target inflation.

Closer home, nasty thrashing in Metal, Oil & Gas and Health Care counters, mainly provided fodder to the already active bears, which running across the street, led to colossal losses. Pressure also was exerted from Cement companies stocks, which fall after October-December earnings failed to impress market participants. ACC and Ambuja Cement stocks plummeted in the range of 3-5% each. However, Information Technology stocks stole the show in today’s trade, with stocks from TECk and Capital Goods counters too luring sufficient traction. Infosys, Tata Consultancy Services mustered decent gains after Cognizant earnings, as the result conformed that revenues of Indian software services exporters continue to outperform Cognizant's, making the U.S.-listed IT company still not too much of a competitive threat.

However, disappointment also crept into D-street with Canara Bank and M&M’s earning. Canara Bank today reported 18.80 per cent decline in its net profit at Rs 710.51 crore for the quarter ended December 31, 2012, on account of higher provisioning for bad loans. Additionally, Mahindra & Mahindra, India's biggest utility vehicle manufacturer, posted a 26 per cent rise in profit for the three months to end-December, but lagged street estimates, as a slide in operating margin offset strong SUV sales growth. Moreover, shares of Hindalco Industries also plummeted over 3% after the company reported 3.79% fall in its net profit at Rs 433.52 crore for the quarter ended December 31, 2012. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 764: 894 while 1301 scrips remained unchanged. (Provisional)

The BSE Sensex lost 114.09 points or 0.58% and settled at 19466.23. The index touched a high and a low of 19648.07 and 19414.80 respectively. 9 stocks were seen advancing while 21 stocks were declining on the index (Provisional)

The BSE Mid-cap index was down by 0.78% and Small-cap index was down by 1.00%. (Provisional)

On the BSE Sectoral front, IT was up by 0.83%, TECk up by 0.62%, Consumer Durables up by 0.28% and Capital Goods up by 0.28% were the top gainers, while Metal down by 1.91%, Oil & Gas down by 1.29%, Health Care down by 1.24%, PSU down by 1.24% and Realty down by 1.19% were the losers in the space.

The top gainers on the Sensex were TCS up by 2.30%, Wipro up 1.58%, HDFC Bank up by 1.04%, BHEL up by 0.92% and L&T up 0.65%, while, Hindalco Industries down by 3.44%, Cipla down by 3.39%,  Sterlite Industries down by 3.25%, Dr Reddys Lab down by 2.44% and ONGC down by 2.13% were the top losers in the index. (Provisional)

Meanwhile, the union cabinet has given its approval for the formation of a special purpose vehicle (SPV) for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project and also permitted public sector natural gas major GAIL India to join the SPV. The four countries involved in the project signed an Inter-Governmental Agreement (IGA) along with a Gas Pipeline Framework Agreement (GPFA).

The projected 1,080-km long worth $7.6-billion TAPI project will transport gas from Turkeminstan (144 km in Turkmenistan, 735 km in Afghanistan and 800 km in Pakistan) will have a capacity to transport 90 mmscmd of gas in which 38 mmscmd each are for India and Pakistan and the remaining 14 mmscmd for Afghanistan. However, this 14 mmscmd is now available to India and Pakistan as the Afghanistan has said that it does not require the gas at present, but may approach Turkmenistan in future.

As per the union cabinet statement, TAPl is required to have an initial contribution of $ 20 million that is $5 million from an identified entity from each of the four participating countries, while India’s Navratna company, GAIL is empowered to make investment at this project from country side.

In the Inter-Governmental Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA), a suitable provision for security and safety of the pipeline has been made. The SPV would also take up the feasibility study and design work of the pipeline to meet the agreed timelines, as well as search for a consortium lead. Further, need of an active interest in the project by all the partner countries at this stage has been asked which would sustain the credibility of the project and generate interest in the international market and would also pave the way for selection of an appropriate consortium leader in the future.   

India VIX, a gauge for markets short term expectation of volatility gained 1.81% at 15.16 from its previous close of 14.89 on Thursday. (Provisional)

The S&P CNX Nifty lost 44.35 points or 0.75% to settle at 5,894.45. The index touched high and low of 5,953.70 and 5,883.65 respectively. 10 stocks advanced against 40 declining on the index. (Provisional)

The top gainers on the Nifty were TCS was up 2.23%, Wipro was up 1.43%, HDFC Bank was up 1.09%, BHEL was up 1.07% and L&T was up 0.57%.

On the other hand, Ambuja Cements down 5.50%, ACC down by 3.67%, Hindalco Industries down by 3.53%, Cipla down by 3.51% and Reliance Infrastructure down by 3.07% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 0.42%, Germany’s DAX up 0.08% and the United Kingdom’s FTSE 100 up 0.44%.

Most Asian stocks markets ended higher on Friday as better than expected economic indicators from China gave some relieve over the health of the mainland economy. Japan’s Nikkei was a notable exception and went home with red mark weighed by poor earnings reports from Sony Corp. and some other front-line companies. Moreover, Japan logged a current account deficit for a second straight month in December for its smallest annual surplus on record - evidence of deteriorating trade balances.

Taiwan Weighted remained shut for the trade today.