Post Session: Quick Review

Indian markets could not get much respite on the final trading day of the week, though the trade remained volatile but some buying too appeared at lower levels that helped the markets to recover from the lows of the day in the final hour, but still the major indices closed the third day in a row in red. There was some bounce back expected in the markets after two straight days of slump, with government amid the political uncertainty taking the decision of partial sugar decontrol.

Though, the mood was likely to remain cautious as most of the Asian markets traded lower, on week jobless claims data out of US. However, the Japanese markets remained in jubilant mood after Bank of Japan announced unprecedented monetary easing which included doubling monthly Japanese government bond purchases. The decision led the yen considerably lower against the dollar and helped the exporters. Though, the domestic markets were mainly aided by the flat-to-positive start of the major European markets ahead of the US payroll data, but they too turned weak later and impacted negatively on the sentiments.

Back home, the major development that hogged the limelight of the day was Cabinet Committee on Economic Affairs’ decision of partial decontrol of sugar by abolishing the requirement for private sugar mills, to sell a specified amount of sugar to the government at concessional rates. The government has taken steps to remove curbs on domestic sugar supplies and now as per CCI decision there will be no levy obligation on sugar mills for 2 years. However, it would double the government’s subsidy burden to Rs 5,300 crore annually from about Rs 2,600 crore. Sugar stocks went for a rally in early deals and scrips like Shree Renuka Sugars, Balrampur Chini, Triveni Engineering and Dwarikesh Sugar added gains in the range of 2-4 percent for the day, while others too posted gains of about a percent. Sectorally maximum profit booking was witnessed in defensive sector FMCG, while capital goods, power and consumer durables too suffered cuts of over half a percent. However, oil & gas, auto, metals and PSU were the few, who managed to held up in green by the end. Auto index gains was majorly driven by one stock, Maruti Suzuki India that surged on global cues, moving up by over seven percent, as the Bank of Japan’s stimulus measures turned the yen weaker against the dollar, which in turn will result in cheaper import of parts and lower royalty for the company to its Japanese parent. In the non sectoral gauge, there was buzz in the NBFC applicants of the new banking licenses on a report that RBI has received 30 applications from different entities for opening new banks. On the other hand there was selling in private banking stocks on reports that in RBI's investigation, though there was no case of money laundering, but there were proofs of KYC lapse and banks could face a regulatory penalty for that.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1405: 1324 while 132 scrips remained unchanged. (Provisional)

The BSE Sensex lost 59.47 points or 0.32% to settle at 18450.23.The index touched a high and a low of 18525.45 and 18389.29 respectively. 16 stocks were up, while 14 stocks declined on the index. (Provisional)

Broader indices concluded mixed; BSE Mid cap was up by 0.02% and Small cap index declined by 0.15%. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 1.65%, Auto up by 0.55%, Metal up by 0.31%, PSU up by 0.31% and Health Care up by 0.06% were the only gainers, while FMCG down by 1.74%, Consumer Durables down by 0.78%, Capital Goods down by 0.72%, Power down by 0.50% and Bankex down by 0.36% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 7.23%, ONGC up by 2.20%, Wipro up by 2.17%, RIL  up by 1.77% and Sterlite Industries up by 1.77%, while, HDFC down by 2.84%, ITC down by 2.79%, NTPC down by 2.42%, Bharti Airtel down by 1.13% and ICICI Bank down by 1.11% were the top losers in the index. (Provisional)

Meanwhile, regretting that economic policies designed to promote growth have been implemented without considering their full environmental consequences, Prime Minister Manmohan Singh said, economic growth should be based on optimal use of natural resources and development must be environmentally sustainable. Normally economic policies are often designed on the assumption that these consequences would either take care of themselves or could be dealt with separately.

While addressing an event, Singh said, ‘India’s commitment to planned economic development reflects the government’s determination to improve the economic conditions of people and an affirmation of the role of the government in bringing about this outcome through a variety of social, economic, and institutional initiatives.’

However, as the economy develops rapidly, it gives rise to many new challenges like scarcity of natural resources. As a result, it is important to decide how to use scarce resources optimally, both from the economic development and the sustainability perspectives.

By adding further, he said the environmental degradation is manifesting itself through the loss of fertile soils, desertification, decreasing forest cover, reduction of fresh water availability, and an extreme loss of bio-diversity, so it has become clear that economic development should be environmentally sustainable. Moreover, through planned economic development, India aims to attain economic growth and poverty alleviation.

India VIX, a gauge for markets short term expectation of volatility gained 1.95% at 16.16 from its previous close of 15.85 on Thursday. (Provisional)

The CNX Nifty lost 29.75 points or 0.53% to settle at 5,545.00. The index touched high and low of 5,577.30 and 5,534.70 respectively. 21 stocks advanced against 28 declining stocks and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Maruti Suzuki up by 7.18%, ONGC up by 2.23%, HCL Tech up by 2.00%, Sesa Goa up by 1.80% and Hindalco was up by 1.69%. On the other hand, NMDC down by 4.94%, ITC down by 2.90%, HDFC down by 2.87%, NTPC down by 2.87% and Ambuja Cements down by 2.51% were the top losers. (Provisional)

All European markets were trading in red with, Germany’s DAX down by 0.99%, the United Kingdom’s FTSE 100 down by 0.86% and France’s CAC 40 down by 1.00%.

Asian markets ended mixed on Friday with increasing tensions in the Korean peninsula ahead of the US jobs data. However, Japanese market closed higher as investors were indulged in some heavy buying across the board, buoyed by the Bank of Japan's monetary easing steps. Meanwhile, Hong Kong market went home with red market, with growth-sensitive sectors witnessing some of the bigger hits.

Markets in China and Taiwan remained shut for the trade today.