Post Session : Quick Review

What started as a promising session of trade at D-street turned out to be an ordinary start of the new Financial Year, with benchmark equity indices unwinding most of their early gains and negotiating a close just above the neutral line. Slew of disappointing macro-economic reports mainly deterred the sentiment at D-Street. Firstly, expanding at its slowest pace since November 2011, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to 52 in March against its previous reading of 54.2 in February. Later on, weighed down by a steep drop in natural gas output, the production of eight core sector industries contracted by 2.5% in February, the first time in 2012-13. Thus, by the close of trade, barometer 30 share index, Sensex, after piercing through 18950 level, settled below the psychological 18900 level, with gains of about 15 points. Likewise, 50 share index, Nifty, too managing to negotiate similar proportion of gains, concluded below 5700 bastion. However, with investors clearly switching their attention to second line shares, broader indices outperformed and went home with gains of around percent and half.

On the global front, Asian shares ended lower on Monday, with exchanges closed in several markets, including Australia and Hong Kong, as well as in Europe for Easter holidays. A survey of sentiment among the country’s largest manufacturers, which missed estimate along with data that showed China’s factory output expanding at a slower-than-expected pace, mainly weighed on the sentiment. Meanwhile, European shares, recovering from three week low, were trading higher as bargain hunters picked up beaten-down stocks on the last trading day of the quarter.

Closer home, sentiments to some extent was also buttressed by the optimistic statement of Finance Minister P. Chidambaram, who believes the economy capable of absorbing $50 billion in foreign direct investment per year. Sectorally, Realty, Capital Goods and Health Care counters witnessed strong demand, while Metal, Auto and Fast Moving Consumer Goods witnessed huge profit-booking. Meanwhile, Aviation stocks, viz, Kingfisher Airlines, Spicejet and Jet Airways, were traded higher since early deals after some media reports suggested Oil PSUs slashing Aviation Turbine Fuel or ATF prices by a steep 5.5%. Additionally, pharmaceutical companies like Natco Pharma, Cipla and Ranbaxy surged 2-5% after the Supreme Court dismissed Novartis Glivec Patent Petition. In a landmark judgment that has the potential to change the direction of India's pharmaceutical business, the Supreme Court said that the drug failed to qualify for a patent according to Indian law. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1878: 861 while 91 scrips remained unchanged. (Provisional)

The BSE Sensex gained 11.23 points or 0.06% to settle at 18847.00.The index touched a high and a low of 18959.48 and 18796.60 respectively. 16 stocks were up, while 14 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.20% and 2.32% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 5.07%, Capital Goods up by 1.59%, Health Care up by 1.10%, Power up by 0.85% and Bankex up by 0.50% were the top gainers, while Metal down by 1.32%, Auto down by 1.05% and FMCG down by 0.02% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 3.83%, BHEL up by 2.43%, L&T up by 2.13%, Infosys up by 1.80% and Hindustan Unilever up by 1.16%, while,  Sterlite Industries down by 4.32%, Jindal Steel down by 1.90%, Wipro down by 1.86%, Tata Motors down by 1.76% and Mahindra & Mahindra down by 1.29% were the top losers in the index. (Provisional)

Meanwhile, expanding at its slowest pace since November 2011, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to 52 in March against its previous reading of 54.2 in February, thereby underscoring shrinking domestic and foreign demand.

Deceleration in new orders and power outages mainly slowed the growth momentum in the manufacturing sector, with the March headline reading showing the biggest month-on-month drop since September 2011. Despite that, Indian goods-producing sector has shown output growth advancement for the forty-eight consecutive month. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years.

Further, although March data signaled higher volumes of incoming new work in the Indian goods-producing sector, the growth in total new orders was the slowest in 16 months. The new orders sub-index in the survey, a reliable gauge of future output, slipped from 56.3 in February to 52.8, the weakest pace of growth since November 2011, with overall output growing at its weakest pace in more than a year. Export orders too rose slightly, however, the rate of expansion eased.

Meanwhile, input prices increased in March, but the rate of cost inflation eased to the slowest in 32 months. Input prices in the Indian manufacturing sector rose for the forty-eight consecutive month, suggesting the increased prices of raw materials and unfavorable exchange rates.

However, even as the survey suggests inflation rate easing over coming months, it also hints at the limited room for rates cut that Reserve Bank of India (RBI) has given the sharp uptick in headline inflation numbers and record-high current account deficit that country is dealing with. The RBI in its mid-quarter monetary policy review on March 18 reduced the repo rate by 25 basis points from 7.75 to 7.50 per cent. Further, India's current account deficit hit a record 6.7 per cent of GDP in December quarter to $32 billion.

India VIX, a gauge for markets short term expectation of volatility lost 2.43% at 14.85 from its previous close of 15.22 on Thursday. (Provisional)

The CNX Nifty gained 17.20 points or 0.30% to settle at 5,699.75. The index touched high and low of 5,720.95 and 5,675.90 respectively. 28 stocks advanced against 22 declining on the index. (Provisional)

The top gainers on the Nifty were DLF up by 7.80%, Cairn up by 5.08%, Reliance Infrastructure up by 4.22%, Dr. Reddy's Laboratories up by 3.42% and JP Associate was up by 3.36%. On the other hand, Sesa Goa down by 2.77%, Tata Motors down by 1.69%, Jindal Steel & Power down by 1.60%, TCS down by 1.50% and Bajaj-Auto down by 1.49% were the top losers. (Provisional)

Most of the European markets were trading in red with, Germany’s DAX down by 0.19%, the United Kingdom’s FTSE 100 down by 0.61% and France’s CAC 40 down by 0.71%.