Post session - Quick review

Not withholding previous session’s splendid gains the domestic equity indices succumbed to selling pressure as profit booking emerged near higher end of the trading range. Bears that were put to sleep in the previous session’s trade played a chief role in trouncing Dalal Street’s victorious spirit. A slight improvement in the inflation numbers too did not have any major impact on markets as the market men continued to look forward for the broader inflation for further cues on RBI’s action in mid quarterly review on October 25, 2011. Controlling inflation remains one the most important items on the agenda, Subir Gokarn, a deputy governor at the bank, said post market hours on Wednesday at an industry event in Jaipur. He said that while oil and food prices were putting pressure on inflation, a moderation in growth will help ease inflation. Meanwhile, for the week ended September 24, primary articles inflation at 10.6% vs 10.84% (WoW), while food articles inflation was improved to 9.32% vs 9.41% (WoW). Fuel group inflation, however, increased to 15.1% vs 14.69% (WoW).

Dalal Street deciding its own trajectory chose to ignore positive global cues as overnight on the global front, U.S. stocks rose on Wednesday as Europe's progress toward bolstering its financial rescue fund brought more battle-weary investors back into the market. Meanwhile, Asian equities rose for a sixth day as investors remained optimistic of a workable and effective resolution to the region's long-standing credit crisis  and also as the U.S. Federal Reserve said it discussed more asset purchases, reducing concern about the global economy. Meanwhile, European shares posted modest gains Thursday, as investors continued to digest recapitalization plans for the euro-zone's banks but mixed earnings from Europe's blue chip stocks were a reminder that the global economy remains fragile.

Back home, earlier on Dalal Street, the bourses extending the previous session’s jubilant mood stood tall in trade on hopes that that euro zone leaders will be able to hammer out a solution to the debt crisis. Sentiment was lifted by news that Slovakia’s political parties had agreed to hold a new vote this week that could see the expansion of the eurozone emergency fund approved by Friday. However, the cautious tone continued to loiter around the market as traders kept their eyes glued on the earnings and the other on developments in the euro zone. The local bourses however in the dying hours of trade released most of the gains as the market men lacking the conviction in the new top’s made by the bourses, pressed sales. On the BSE sectoral front, stocks from Bankex, Information Technology and Realty counters remained the flavor of the session, while stocks from Auto, Capital Goods, Healthcare counters remained the hole in the wall. However, PSU oil marketing companies were trading all up for the entire trading session as the prices of Brent crude fell to near $111 on Thursday, snapping six days of gains, after trade data from China pointed to slower demand in the world's second-largest oil consumer.

The 30 scrip sensitive index-Sensex- on BSE after toiling around the 17000 mark for the day long, ended off it with a loss of over 50 points. Similiarly, the 50 share index- Nifty-on NSE losing over 15 points ended sub 5100 mark. The market breadth on the BSE ended neutral; advances and declining stocks were in a ratio of 1375:1394 while 127 scrips remained unchanged.

The BSE Sensex lost 86.57 points or 0.51% and settled at 16,871.82. The index touched a high and a low of 17,084.07 and 16,864.84 respectively. 8 stocks advanced against 22 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.05% while Small-cap index was flat by 0.00%. (Provisional)

On the BSE Sectoral front, Bankex up 0.98%, IT up 0.58%, Realty up 0.32% and TECk up 0.21% were the only gainers while, Auto down 1.58%, Capital Goods down 1.42%, Metal down 1.11%, Health Care down 0.98% and Oil & Gas down 0.85%.

The top gainers on the Sensex were ICICI Bank up 2.33%, Tata Steel up 1.48%, TCS up 0.99%, DLF up 0.74% and HDFC Bank up 0.62%.

On the flip side, Jindal Steel down 4.13%, Hindalco down 3.50%, Tata Motors down 3.47%, Maruti Suzuki down 2.75%  and Tata Power down 2.52% were the top losers on the index. (Provisional)

Meanwhile, the slowdown in the industrial production has raised concerns of the government. Finance Minister Pranab Mukherjee accepted that the IIP slowdown may affect the Gross Domestic Product (GDP) growth in the second quarter. Mukherjee said, it may impact India's July-September quarter GDP. 'It (IIP) is not encouraging. It is a bit disappointing and it may affect the GDP of second quarter.’

The Index of Industrial Production (IIP) for month of August grew by 4.1% compared to 3.8% in July and for the first five months of current financial year cumulative growth of IIP was 5.6% compared to 8.7% in April-August 2010.

Finance minister, however, did not comment on the extent to which the subdued IIP numbers will impact on the GDP growth in the second quarter of 2011-12. He said, 'to what extent it (slowdown in IIP) would affect, it would be premature to make any assessment.'

For the first quarter of 2011-12, country’s GDP growth fell to six quarter low at 7.7% compared to 8.8% in the same period of 2010-11. For the current fiscal year, government expects Indian economy to grow by 8.5%. However, many agencies including Reserve Bank of India (RBI), have done downward revision in their estimates for the current financial year, because of the slowdown in global economy and hovering inflation, which is affecting the demand, hence the growth.

Although, July IIP data has been revised upwards from 3.3% to 3.8%, on this upward revision finance minister said that 'the silver lining is that IIP has improved from July figure... But compared to corresponding period of previous year, it is quite low.'

Meanwhile, the economic affairs secretary R Gopalan said that the slowdown in the IIP numbers is a matter of concern but expressed confidence that the figures would improve from here. 'It is a cause of concern. But as we go along, if you see the previous year, always second half IIP numbers have been good,' he added.
 
India VIX, a gauge for market’s short term expectation of volatility lost 0.59% at 28.24 from its previous close of 28.41 on Wednesday. (Provisional)

The S&P CNX Nifty lost 30.50 points or 0.60% to settle at 5,068.90. The index touched high and low of 5,136.95 and 5,067.65 respectively. 13 stocks advanced against 37 declining ones on the index. (Provisional)

The top gainer on the Nifty were, ICICI Bank up 2.24%, HCL Tech up 2.10%, Tata Steel up  1.81%, Cipla up 1.36%  and TCS up 0.96%.

 On the other hand, Jindal Steel down 4.77%, Hindalco down 3.35%, Tata Motors down 3.18%, Ranbaxy down 3.06% and IDFC down 3.04% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 1.16%, Germany's DAX down 1.00% and FTSE 100 down 0.96%.

Most of the Asian equity indices finished the day’s trade in the positive terrain on growing optimism that Europe will take firm steps to hold the region’s debt worries. Moreover, Nikkei ended with a gain of about a percent to a four-week high on hopes that Europe will come up with concrete measures to support Greece. In addition, Shanghai Composite rose 0.78 percent, boosted by material stocks as funds trickle back into the market, pushing total A-share turnover on the Shanghai bourse to its second-highest since August 26 while, Seoul shares jumped over half a percent, buoyed by substantial gains in banks including Hana Financial Group and airlines like Korean Air.