Post Session: Quick Review

Market resumed trade, after a day’s break with high vigor and benchmarks vehemently went on adding ground to snap the day with gains of close to one and half a percent. Despite mostly negative global set-up, markets staged remarkable session of performance with no speck of profit-booking throughout the day.  Benchmark 30 share index Sensex, gained over massive 200 points, to conclude past 19700 level, while Nifty ascended close to 75 points and finished past the crucial 6000 mark, last seen on February 4. Meanwhile, broader indices underperforming the frontline equity indices went home with gains of over three fourth of a percent (Midcap index) and half a percent (Smallcap index). Bullish bets were build on monetary easing and expectation of dovish stance by the Reserve Bank of India (RBI) in its May 3 meeting, fired up all the rate sensitive’s, banking, Realty and Auto. Faced with declining growth, the Reserve Bank is likely to cut repo rate and Cash Reserve Ratio (CRR) by about 0.25% each to spur demand and boost industrial output.

On the global front, Asian stocks fell for a second day after weaker growth in US payrolls and manufacturing added to evidence of a slowdown in the world’s largest economy. While, European shares too sagged as investors waited to see if the European Central Bank will cut rates and hint at more measures to boost struggling euro-zone economies.

Closer home, brushing aside the murky manufacturing data, investors bought local equities. On the macro-front, 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 51 in April against its previous reading of 52 in March, registering its second monthly decline.

Further, given that across the board buying, there were no losers on BSE sectoral front, stocks from Information Technology, Realty, Capital Goods and banking counters emerged as investors’ favorite. Shares of fertilizers companies came under pressure in otherwise firm market after the government announced a cut in subsidy on complex non-urea fertilisers for the current fiscal, a move followed on decline in global prices of potassic and phosphatic nutrients. Additionally, April Auto numbers were a mixed bag, with Maruti Suzuki, M&M and TVS Motors ending in green and Bajaj Auto and Hero Motocorp plunging over a percent on reporting 10% and 9.50% declines in April 2013 sales figures respectively.   The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1260: 1110, while 123 scrips remained unchanged. (Provisional)

The BSE Sensex gained 229.58 points or 1.18% to settle at 19733.76.The index touched a high and a low of 19792.00 and 19451.26 respectively. 18 stocks were up, while 12 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.77% and 0.62% respectively. (Provisional)

On the BSE Sectoral front, IT up by 2.47%, Teck up by 2.03%, Capital Goods up by 1.72%, Realty up by 1.42% and Consumer Durables up by 1.14% were the top gainers, while Metal down by 0.02%, was the sole loser in the space. (Provisional)

The top gainers on the Sensex were TCS up by 3.84%, Mahindra & Mahindra up by 3.48%, L&T up by 2.61%, Infosy up by 2.35% and HDFC up by 1.99%, while, Hero MotoCorp down by 1.96%, Hindustan Unilever down by 1.93%,  Hindalco Industries down by 1.44%, Gail India down by 1.38% and Bajaj Auto down by 1.18% 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 51 in April against its previous reading of 52 in March, registering its second monthly decline. Production at Indian factories increased at the slowest pace in forty-nine months in April, mainly on account of deceleration in domestic orders and persistent power shortages. Nevertheless, the PMI index, which gauges business activity in Indian factories but not its utilities, has held above the watershed 50 level that divides growth from contraction for over four years.

Further, although April data signaled rise in order book volumes for the forty-ninth month, amid evidence of firm demand and new product launches, the overall rate of expansion was modest and the slowest since September 2011. The new business index, which rose an 18-month high in January, also fell for its second straight month to its lowest since November 2011.

Encouragingly, input and output price inflation eased. Although average prices paid for inputs rose solidly, but at the slowest rate since June 2010. Input prices in the Indian manufacturing sector rose for the forty-ninth consecutive month. Manufacturers increased their workforces further during the month, extending the current period of job creation to 14 months. Further even a pick up in the export orders index suggested factories could step up production in coming months. The latest PMI also pointed out ebbing inflation pressures last month with both costs of raw material and prices charged rising at a slower pace than March.

Thus, the survey suggests with the growth momentum slowing and inflation receding, the RBI is likely to cut the policy rate this week, to arrest the worst economic slowdown in a decade. The Reserve Bank of India, has slashed its key lending rate twice so far this year by 25 basis points each time, lowering the rate to 7.5% after leaving it on hold for nine months.

India VIX, a gauge for markets short term expectation of volatility gained 7.81% at 16.28 from its previous close of 15.10 on Tuesday. (Provisional)

The CNX Nifty gained 72.25 points or 1.22% to settle at 6,002.45. The index touched high and low of 6,019.45 and 5,910.95 respectively. 35 stocks advanced against 15 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure up by 3.52%, HCL Tech up by 3.41%, TCS up by 3.38%, JP Associate up by 3.06% and M&M was up by 3.02%. On the other hand, Cairn down by 1.97%, Hindustan Unilever down by 1.95%, Hero MotoCorp down by 1.79%, Hindalco down by 1.49% and Tata Motors down by 1.17% were the top losers. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.29% and the United Kingdom’s FTSE 100 down by 0.19% while Germany’s DAX up by 0.23%.

Most of the Asian Pacific markets ended the session in red terrain on Thursday as sentiments remained frail after weak set of economic data from US and China, the two biggest economies of the world. Data showed that US companies added fewer workers than forecast in April and the Institute for Supply Management’s factory index fell to 50.7 in April from 51.3 in March. Further, growth in China's manufacturing sector unexpectedly slowed in April, raising fresh doubts about the economy. The Chinese purchasing managers’ index fell to 50.6 in April from an 11-month high in March of 50.9.