Post session - Quick review

Local equity markets staged a phenomenal performance after witnessing a clout in early trade as the bourses not once looked back after the noon and went on capturing gains on speculations that German lawmakers will vote to expand a bailout fund for Europe's debt-stricken nations. Tentative buying pushed the markets higher as commodities and oil prices enjoyed a brief respite from the recent steep selloff. Traders rolled over their positions in the futures and options (F&O) segment from the near-month September 2011 series to October 2011 series. Practically nothing could sedate the spirit of Dalal Street, as India’s weekly food inflation measured by the wholesale price index (WPI), after declining for three consecutive weeks surged to 9.13% for the week ended September 17 from 8.84% in last week.  Market men who pinned their hopes on the German vote on the euro-area rescue fund mainly provided support to the bourses which like a falling knife went on chopping gains of the bourses. However, later to its twist, bulls which woke up from their slumber led to a blissful close of benchmark indices and also the F&O expiry which bid adieu to the September series in Style.

On the global front, US stocks snapped a three-day winning streak, sinking into late trade as a drop in commodities prices added to concerns about policymakers' ability to contain Europe's debt crisis. The decline came on a day when Finland voted to approve changes to the euro-zone bailout fund, after leaders raised concerns earlier this month that they would demand collateral as a precondition for participation. Meanwhile, Asian shares ended higher on Thursday on blue chip support.  Moreover, the European shares moved higher in volatile trade on Thursday, with banking stocks featuring among the top performers after recently being sold off.

Earlier, at home turf, investor’s prolonging the previous session solemn mood dumped the risky equities as they again began to doubt Europe's ability to cauterize its worsening debt crisis. On Tuesday, after 7 Euro zone nations stated that private creditors will have to accept larger losses in their Greek bond holdings as compared with the ones that were agreed in July, there were reports coming out overnight that some EU officials stand much against any such move.   However, risk appetite revisited Dalal Street later in the morning deals, while bulls came out of hibernation completely by the noon trade. The trade since then remained bull dominated. On the BSE Sectoral front, stocks from Auto, Information Technology and Fast Moving Consumer Goods (FMCG) counters showcasing splendid performance, led to the uptake of the bourses. Meanwhile, stocks from Consumer Durables, Capital Goods and Healthcare counters remained the weak links in the trade. The 30 share barometer index on Bombay Stock Exchange (BSE) capturing gains of over 250 points ended above 16400 level, while 50 share index-Nifty-gaining over 50 points ended  above 5000 level. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1284:1464 while 134 scrips remained unchanged.

The BSE Sensex gained 241.24 points or 1.47% and settled at 16,687.26. The index touched a high and a low of 16,756.08 and 16,316.66 respectively. 22 stocks advanced against 8 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.11% while Small-cap index was down by 0.05%. (Provisional)

On the BSE Sectoral front, Auto up 2.17%, IT up 2.08%, Bankex up 1.75%, FMCG up 1.64% and Oil & Gas up 1.49% were the top gainers while, Consumer Durables down 0.94%, Capital Goods down 0.83% and Health Care down 0.05% were the only losers.

The top gainers on the Sensex were JP Associates up 6.29%, M&M up 2.86%, Tata Motors up 2.85%, ITC up 2.72% and Maruti Suzuki up 2.71%.

On the flip side, L&T down 2.30%, Sterlite down 1.33%, Coal India down 0.98%, Sun Pharma down 0.90% and SBI down 0.70% were the top loser on the index. (Provisional)

Meanwhile, India’s weekly food inflation measured by the wholesale price index (WPI), after declining for three consecutive weeks have surged to 9.13% for the week ended September 17 from 8.84% in last week. The increase was due to surge in price of Egg, Meat & Fish, Potato and Pulses. 

According to the data released by Ministry of Commerce and Industry, the index for Food Articles group rose by 0.8% to 197.3 (Provisional) from 195.7  (Provisional) for the previous week due to higher prices of gram (6%), masur, arhar, urad, poultry chicken, condiments & spices and fish-marine (2% each) and fruits & vegetables, maize, jowar and milk (1% each).  However, the prices of barley (4%), coffee (3%) and bajra and ragi (2% each) declined.

The index for Non-Food Articles group declined by 0.3% to 184.8 (Provisional) from 185.4  (Provisional) for the previous week due to lower prices of flowers (15%), soyabean (7%), groundnut seed and raw jute (3% each) and gingelly seed (1%).  However, the prices of raw silk (7%), raw cotton (4%), raw rubber (2%) and fodder, mesta, copra (coconut) and linseed (1% each) moved up.

The index for 'Minerals' group declined by 0.9% to 303.6 (Provisional) from 306.3 (Provisional) for the previous week due to lower prices of copper ore (15%), chromite (10%), bauxite (7%) and barytes (4%).  However, the prices of magnesite (14%), zinc concentrate (11%), sillimanite (7%), steatite (6%), dolomite (3%) and iron ore (2%) moved up.

As a result, the index for primary articles group which has the highest weightage of 20.12% in WPI rose by 0.4 % to 202.7 (Provisional) from 201.9 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 11.43% (Provisional) for the week ended September 17 as compared to 12.17 % (Provisional) for the previous week.

Meanwhile, the index for Fuel and Power group which has a weightage of 14.91% in WPI, rose by 0.7% to 169.4 (Provisional) from 168.2 (Provisional) for the previous week due to higher prices of petrol (5%),  light diesel oil and furnace oil (4% each), naphtha and aviation turbine fuel (3% each) and bitumen (1%).  However, the prices of electricity (industry) (5%) declined. The annual rate of inflation, calculated on point to point basis, stood at 14.69 % (Provisional) for the week ended September 17 as compared to 13.96 % (Provisional) for the previous week.

The surge in weekly food inflation is likely to raise the concern of the government and industry as the Reserve Bank of India has reiterated that the RBI is ready to sacrifice some economic growth in order to control inflation and inflation expectations. In order to control inflation, the RBI since March 2010, has increased its short term lending rates by 350 basis points or 3.5%, as a result, cost of capital has increased significantly, affecting the pace of investment and growth of the economy.India VIX, a gauge for market’s short term expectation of volatility lost 2.90% at 31.07 from its previous close of 32.00 on Wednesday. (Provisional)

The S&P CNX Nifty gained 68.85 points or 1.39% to settle at 5,014.75. The index touched high and low of 5,034.25 and 4,906.00 respectively. 35 stocks advanced against 15 declining ones on the index. (Provisional)

The top gainer on the Nifty were, JP Associates up 7.07%, Kotak Bank up 3.74%, Infosys up 3.23%, Siemens up 3.19% and BPCL up 3.14%. On the other hand, SesaGoa down 2.27%, L&T down 2.15%, Reliance Capital down 2.09%, Sterlite down 1.41% and Reliance Infra down 1.24% were the top losers. (Provisional)

The European markets are trading mix, with France's CAC 40 up 0.81%, Germany's DAX up 0.60% and FTSE 100 down 0.39%.

Most of the Asian equity indices ended the day’s trade in the green on Thursday ahead of an expected vote by Germany’s parliament to approve the strengthening of a bailout fund intended to help European countries mired in debt crises. Moreover, recovery in some of the commodities and US stock futures on hopes of progress on Europe’s debt debacle too supported the sentiments. The Nikkei average reversed all its initial losses to retake the 8,700 level for the first time in over a week, on a rush of buying in the final half-hour of trade as on hopes of growth on European debt disaster. However, Chinese benchmark Shanghai Composite dropped over a percent on Thursday to a nearly 15-month closing low, weighed down by commodity and construction-related stocks, as weakness in global stock markets reignited growth concerns. While, Hong Kong financial markets and businesses remained shut for the trade.