Post Session: Quick Review

Trade turned a bit volatile for the Indian equity markets on Wednesday after posting sharp gains in last session. Though, the start was on a positive note tailing the positive cues from the global markets and raised optimism after better than expected earnings by HCL Technology in the morning. Though, there was some pressure from the sluggish performance of the heavyweight Reliance Industries (RIL) as it had reported weak topline growth despite beating the street estimates for its bottomline of the fourth quarter. The weakness in oil & gas segment, especially RIL, dragged the markets lower in the very early trade, however there was an immediate recovery supported by the rate sensitives’ on hopes of rate cuts by the RBI in its upcoming policy review on 3 May. 

The global cues more or less remained positive and after the rebound in US markets overnight, the majority of the Asian markets snapped the session in green with the Japanese Nikkei surging the most, as the yen weakened after the IMF raised the growth forecast for Japan. However, all was not well with the European markets and the major indices after a positive start slipped into the red for the fourth day after Sweden’s central bank pushed back the timing of likely interest-rate increases. There was cautiousness among traders ahead of the G-20 finance ministers and central bankers meet starting from tomorrow.

Back home, there was profit booking at several individual counters that kept the trade volatile, while the weakness in the European markets too weighed on the sentiments in the latter half of the trade. Initially it seemed markets will continue to move higher after HCL Technology, the fourth largest software services provider reported 73% YoY rise in the quarterly profit. The net profit of the company rose to Rs 1040 crore for the quarter ended March 31 2013 from Rs 965 crore in the year ago period. There was general cautiousness in the IT sector with a bipartisan US Senate immigration bill. However, the stocks gave up all their gains after surging to the 52 week high and closed lower by over a percent. Though, other two important result announcements of Yes bank and Puravankara Projects, not only came better than expected but the stocks too were able to hold their gains and Yes Bank closed higher by over 2 percent, while Purvankara surged by around 5 percent. There was some buzz in the infra sector too on reports that the Ministry of Road Transport and Highways is targeting national highway contract awards worth about Rs 90,000 crore spanning 7,300 km this fiscal. Sectorially, the defensive FMCG sector was the top gainer closely followed by rate sensitive auto. Healthcare, metal realty and banking too added considerable gains, while the oil and gas was the laggard along with IT, technology and power sector. The broader indices outperformed the benchmarks despite paring some of their gains in the final hours. Finally the major indices closed flat with a negative bias, mainly dragged by the slump in Reliance industries.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1131: 1195, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex lost 13.77 points or 0.07% to settle at 18,731.16.The index touched a high and a low of 18,869.88 and 18,673.44 respectively. 16 stocks were up, while 14 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.18% and 0.30% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 1.27%, FMCG up by 1.25%, Auto up by 1.16%, Health Care up by 1.09% and Bankex up by 0.93% were the top gainers, while Oil & Gas down by 2.12%, IT down by 1.14%, Teck down by 0.77%, Power down by 0.17% and Capital Goods down by 0.03% were the only losers in the space. (Provisional)

The top gainers on the Sensex were  Sterlite Industries up by 4.05%, Mahindra & Mahindra up by 3.91%, Sun Pharma up by 3.01%, SBI up by 2.87% and ICICI Bank up by 1.70%, while, RIL down by 3.78%, Wipro down by 1.77%, TCS down by 1.73%, HDFC down by 1.57% and Tata Power down by 1.56% were the top losers in the index. (Provisional)

Meanwhile, as per latest annual Fiscal Monitor report, India with its favorable interest rate-growth differential has an advantage in addressing deficit concerns this year. Many advanced economies have succeeded in reducing deficits by about 0.75 percent of GDP last year both in headline and in cyclically-adjusted terms, and are projected to fall at a faster pace in 2013.

India has taken definitive steps such as cutting down on spendings and setting up committee for reducing the deficit which will probably reduce the deficit by 0.75% of GDP on line with the forecasts. This would leave the country's deficit almost unchanged from its 2012 level in headline and cyclically adjusted terms. The IMF report attributed much of the improved picture globally to concerted efforts by governments to bring spending under control following the peak of the crisis in 2009, as well as a gradually improving external environment.

Many countries have also taken important first steps to bring overall debt down to levels needed to ensure strong and vibrant economies. According to the report, the overall debt situation in most emerging market economies and low-income countries remains more favorable than in advanced economies, owing in part to relatively low levels of debt and deficits combined with low interest rates and growing economies.

Recently, Reserve Bank of India has taken important steps to tighten bank reporting requirements to get a more accurate picture of asset quality.

India VIX, a gauge for markets short term expectation of marginally gained 0.67% at 16.36 from its previous close of 16.25 on Tuesday. (Provisional)

The CNX Nifty gained 2.25 points or 0.04% to settle at 5,691.20. The index touched high and low of 5,732.15 and 5,669.00 respectively. 27 stocks advanced against 23 declining on the index. (Provisional)

The top gainers on the Nifty were Sesa Goa up by 4.43%, Ambuja Cements up by 4.078%, M&M up by 3.75%, Sun Pharmaceuticals up by 3.10% and Lupin was up by 3.09%. On the other hand, Reliance Industries down by 3.34%, Reliance Infrastructure down by 2.49%, ONGC down by 1.78%, Tata Power down by 1.77% and TCS down by 1.57% were the top losers. (Provisional)

Most of the European markets were trading in red with, Germany’s DAX down by 1.20%, the United Kingdom’s FTSE 100 down by 0.52% and France’s CAC 40 down by 1.06%.

Asian stock markets ended mostly higher on Wednesday, as sentiments were boosted by positive American corporate earnings and data supporting the case for ongoing US monetary stimulus. Japanese market went home with green mark supported by rise in the value of dollar and euro against yen. South Korea's market closed marginally higher as tensions still lingered on the Korean Peninsula. Regional stocks recovered but closed lower after two days of volatile trading because of Monday's weaker-than-expected Chinese growth data and a sharp drop in the price of gold.