Post session - Quick review

A day after staging modest recovery, profit-booking took center stage at D-street, whereby funds and retail investors, in absence of fresh cues, squared off position amidst globally risk-off sentiment, which mainly led to negative session of trade at Indian equity markets. Although selling pressure receded by the end of the trade, with barometer gauges recouping substantial part of their losses, the pessimistic environment prevailed, which led Sensex witness a loss of over quarter of percent and ending below the psychological 18900 level, likewise 50 share index, Nifty, too capitulating to the selling pressure, concluded below the crucial 5700 level. Broader indices, underperforming the benchmarks, witnessed a colossal cut of over a percent.

Nevertheless, market received some support at lower levels after Moody’s Investors Service stated that, India’s 2013/14 Budget unveiled last week offered a realistic plan to meet the country’s fiscal deficit target, and should be a credit positive for its sovereign ratings. Moody’s added that the country’s fiscal consolidation plans could pave the way for monetary easing, thus helping revive economic growth. Further, sentiment also got some fillip after P. Chidambaram said actual fiscal deficit for 2012/13 may be lower than 5.2 percent of GDP.

On the global front, a sell-off in Chinese equities dragged Asian shares down sharply on Monday, as worries about Beijing tightening its grip on the property sector compounded weak sentiment already dampened patchy global growth outlook. Globally risk off sentiment was also triggered after US lawmakers failed to prevent the imposition of $85 billion in spending cuts that kicked in at the end of last week. Meanwhile, worries over the global growth outlook also dragged European shares lower on Monday. The prospect of a lengthy period of political instability following Italian parliamentary elections was also weighing on markets, concerned about a return of the euro zone debt crisis.

Closer home, across the board selling pressure took all the sectoral indices down in red, barring Banking and TECk counters which managed to emerge as the only winners. On the other hand, major thrashing was witnessed in Metal, Realty and Consumer Durable counters. Meanwhile, PSU Oil Marketing companies stocks, viz, BPCL, HPCL and IOC, which were trading in green in early deals, also succumbed to selling pressure by the end of the day. Shares of state-owned oil marking companies (OMC) edged higher in an otherwise weak market after these companies hiked petrol price by Rs 1.40 per litre from Friday midnight. However, this development turned out to be dampener for Auto stocks, which recently reported their monthly numbers. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 869: 1948 while 111 scrips remained unchanged. (Provisional)

The BSE Sensex lost 40.56 points or 0.21% to settle at 18877.96.The index touched a high and a low of 18877.96 and 18760.41 respectively. 11 stocks were up, while 18 stocks declined and one stock remains unchanged on the index. (Provisional)

The BSE Mid cap and Small cap indices declined by 1.37% and 1.89% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 0.27% were the sole gainers, while Metal down by 2.54%, Realty down by 2.25%, Consumer Durables down by 2.15%, Capital Goods down by 1.85% and PSU down by 1.14% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 1.52%, Bharti Airtel up by 1.46%, HDFC Bank up by 0.94%, TCS up by 0.71% and ITC up by 0.69%, while, Hindalco Industries down by 4.55%, Jindal Steel down by 4.26%, Sterlite Industries down by 2.74%, Hindustan Unilever down by 2.63% and L&T down by 2.52% were the top losers in the index. (Provisional)

Meanwhile, as per the credit rating agency, Crisil the government is likely to miss the revenue growth target of 23.4 percent in FY14 as its estimates from spectrum and divestment sale inflows are too ambitious. As per the report, given the weak GDP figures, along with the fact that it is an election year, achieving a budgeted revenue and expenditure target will be an arduous task and the Rs 58,000 crore expected from disinvestment and Rs 40,000 crore from spectrum sale are difficult to achieve. 

Regarding the economic growth for the next financial year, the Crisil report said ‘as budgetary proposals are broadly in-line with our expectations, we retain our pre-budget forecast of 6.4 percent GDP for 2013-14, which is the midpoint of the GDP growth range (6.1 to 6.7 percent) that the budget has assumed’. On inflation, the rating agency said it would decline during the next financial year with WPI inflation averaging around 6.5 percent due to low crude oil price, strengthening of rupee and lower core inflation.

By adding further, it noted that the government’s move for fiscal consolidation could hurt growth in the short-run, but it would also create an environment in which the Reserve Bank can cut interest rates and provide support to growth. 'We expect a lowering of the repo rate by 50-75 bps during the rest of 2013-14, due to lower inflation. This will lower the floor for the G-Sec rate and soften yields to around 7.7-7.8 percent by March-end 2014' it added.

Further, it also added that market borrowing of Rs 4.84 trillion for next fiscal against Rs 4.67 trillion this fiscal would create an upside pressure on 10-year G-Sec yields, while, rupee is likely to settle around 51-52 per dollar by the end of March 2014.

India VIX, a gauge for markets short term expectation of volatility lost 2.77% at 13.67 from its previous close of 14.06 on Friday. (Provisional)

The CNX Nifty lost 21.20 points or 0.37% to settle at 5,698.50. The index touched high and low of 5,712.00 and 5,663.60 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were Bharti Airtel up by 1.88%, TCS up by 1.20%, Dr. Reddy's Laboratories up by 1.16%, ITC up by 0.94% and Axis Bank was up by 0.87%. On the other hand, JP Associate down by 5.95%, Hindalco down by 5.00%, Jindal Steel & Power down by 4.71%, ACC down by 3.66% and Reliance Infrastructure down by 3.40% were the top losers. (Provisional)

All European markets were trading in red with, Germany’s DAX down by 0.66%, the United Kingdom’s FTSE 100 down by 0.58% and France’s CAC 40 down by 0.09%.

Asian markets ended mostly lower on Monday as US lawmakers were not able to prevent the imposition of $85 billion spending cuts that kicked in at the end of last week. Chinese markets closed with huge losses as its property developers were affected by the measures to cool the housing market. On the other hand, Japan’s Nikkei went home with green mark as a weaker yen helped to improve the sentiment.