Bulls at Dalal Street showcased power-packed performance as the markets discounting a host of negative news across domestic and international turf, snapped the last session of the week with gains of over 1%. Brushing aside negative global cues, local equity markets clawed substantial ground as investor’s scooped up equities on speculations that European policy makers were a step closer of resolving the region’s debt crisis. The gains of Dalal Street came on the heels of credit rating agency Standard and Poor's downgrading the long-term credit rating of Spain by one notch on Friday. S&P cited Spain's high unemployment, tightening credit and high level of private-sector debt among the reasons for the downgrade of the nation's creditworthiness to AA- from AA. Meanwhile, on the domestic front, release of the September Inflation data went as a low key affair even as the numbers that stayed above 9 percent for the tenth straight month prompted the market for another interest rate rise even when policymakers around the world mull easing rates to stimulate a weak global economy. The rate of inflation, based on monthly WPI came in line with the street expectation at 9.72% for the month of September 2011 as compared to 9.78% seen in the previous month and 8.98% during the corresponding month of the previous year. However, for the month of July, 2011 the final WPI for ‘All Commodities’ (Base: 2004-05=100) have been revised upward to 9.36% as compared to 9.22% reported earlier.
On the global front, US stocks slipped on Thursday after JPMorgan's earnings and China's soft trade data revived worries about the impact of slower growth on profits. The decline put an end to three straight days winning streak that capped off a 12 percent increase in the S&P 500 since hitting a low on October 4. However, the Nasdaq stayed in positive territory, helped by semiconductor shares. China's trade surplus narrowed for a second straight month in September as both imports and exports were lower than expected, pointing to cooling domestic and global economic demand, data on Thursday, 13 October 2011, showed. Meanwhile, Asian shares ended a six-day winning streak for the regional benchmark index, after report showed continued high inflation, thereby lessening the chances of monetary-policy easing in the world’s second-largest economy. Meanwhile, China's consumer price index which rose 6.1% in September from a year earlier, a weaker-than-forecast, also graved the mood. The latest CPI reading for China marked a slowdown from August, when prices rose 6.2% annually. However, the European shares rose on Friday, boosted by better-than-expected results from Google and forecast beating earnings news from Syngenta that counterbalanced weakness in banks after fresh ratings agency actions weighed on the sector.
Back home, bucking a sluggish trend, shares of broadcasting companies and cable service providers rallied over 10% on Bombay Stock Exchange today after the government approved an ordinance on digitization of cable network. Cheering the news, shares of Wire and Wireless (India) Hathway Cable & Datacom soared 10% and 20% respectively. The Cabinet, in a meeting chaired by Prime Minister Manmohan Singh today, approved a proposal to promulgate Digitalisation of Analogue Cable Systems Ordinance. The Information and Broadcasting Ministry is aiming at complete digitisation of cable sector in the four metros by March 31, 2012. However, the metal stocks declined as the latest data showed inflation remains at uncomfortably high levels in China, the world's largest consumer of aluminum and copper. Reacting to this news, Sesa Goa, JSW Steel, Sterlite Industries, Sail, Nalco, Hindalco Industries dropped LMEX, a gauge of six metals traded on the London Metal Exchange shed 2.39% on Thursday, 13 October 2011. However, even shares of Kingfisher Airlines slumped 7.1% on reports that state-run oil marketing firm HPCL temporarily suspended fuel supplies after the carrier failed to clear a pending bill of about Rs 130 crore.
Aiding the markets in their upmove stocks from Information Technology (IT), TECk and Oil & Gas counters enticed major buying interest . Meawhile, stocks from Realty and Metal and Capital Goods remained the top choice at seller’s radar. 30 share barometer gauge on Bombay Stock Exchange (BSE)-Sensex- gaining over 150 points ended over 17 k mark, while the 50 share broadly followed index on National Stock Exchange(NSE)-Nifty-adding around 50 points settled above 5100 mark. The broader indices too played “catch up” game as they went home with gains of over 0.25% each.
The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1415:1341 while 129 scrips remained unchanged.
The BSE Sensex gained 187.34 points or 1.11% and settled at 17,071.26. The index touched a high and a low of 17,112.45 and 16,828.45 respectively. 19 stocks advanced against 11 declining ones on the index (Provisional)
The BSE Mid-cap index gained 0.51% while Small-cap index was up 0.31%. (Provisional)
On the BSE Sectoral front, IT up 2.59%, TECk up 2.58%, Oil & Gas up 1.37%, FMCG up 1.22% and Auto up 0.86% were the top gainers while, Realty down 1.32%, Metal down 0.65%, Capital Goods down 0.58%, PSU down 0.44% and Power down 0.14%.
The top gainers on the Sensex were Jindal Steel up 4.97%, TCS up 3.82%, Wipro up 3.75%, Bharti Airtel up 3.66% and Bajaj Auto up 2.81%.
On the flip side, Tata Steel down 3.00%, Coal India down 2.76%, Maruti Suzuki down 2.76%, DLF down 2.72% and L&T down 0.83% were the top losers on the index. (Provisional)
Meanwhile, India’s headline inflation measured by the wholesale price index (WPI) eased marginally to 9.72% in September from 9.78% in August. This marginal fall in headline inflation is on the back of marginal decline in the primary articles and manufactured products, which fell to 11.84% and 7.69% in September, compared to 12.58% and 7.79% in August. However, the fuel and power segment of WPI, surged by 14.09% in September from 12.84% in August. In the first half of the current financial year, the headline inflation has been hovering above 9%, which indicates that the RBI’s anti-inflationary monetary policy stance has failed to contain inflation.
According to the data released by the ministry of commerce and industry, the WPI for 'All Commodities' for the month September 2011 rose by 0.6% to 155.8 (Provisional) from 154.9 (Provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 9.72% (Provisional) for the month of September 2011 (over September 2010) as compared to 9.78% (Provisional) for the previous month and 8.98% during the corresponding month of the previous year. Build up inflation in the financial year so far was 4.21% compared to a buildup of 4.18% in the corresponding period of the previous year.
On month-on-month basis, the Primary Articles rose by 1.3% to 202.2 (Provisional) from 199.6 (Provisional) for the previous month. The index for 'Food Articles' group rose by 1.4% to 196.5 (Provisional) from 193.7 (Provisional) for the previous month due to higher prices of poultry chicken (10%), gram (8%), fish-inland (4%), arhar, masur, fruits and vegetables and egg (3% each) and condiments and spices (2%) and milk and urad (1% each). However, the prices of tea and maize (4% each), jowar and coffee (2% each) and barley, wheat, ragi, fish-marine and pork (1% each) declined.
The index for 'Non-Food Articles' group rose by 1.8% to 184.4 (Provisional) from 181.1 (Provisional) for the previous month due to higher prices of logs and timber (32%), raw cotton (6%), raw rubber (5%), raw silk (3%), linseed and rape and mustard seed (2% each) and raw jute, groundnut seed, sunflower, niger seed and coir fibre (1% each). However, the prices of castor seed (6%), flowers (4%), soyabean and copra (3% each), gingelly seed (2%) and gaur seed (1%) declined.
The index for 'Minerals' group declined by 0.2% to 306.1 (Provisional) from 306.6 (Provisional) for the previous month due to lower prices of barytes (14%), magnesite (8%), chromite (4%), sillimanite and crude petroleum (2% each). However, the prices of zinc concentrate (14%), limestone and steatite (8% each), copper ore (6%), dolomite (5%) and iron ore (1%) moved up.
The index for the Fuel and Power, which has weight of almost 15% in the WPI, rose by 0.8% to 168.4 (Provisional) from 167.0 (Provisional) for the previous month due to higher prices of lubricants (5%), electricity (agricultural) and bitumen (4% each), electricity (domestic), electricity (industry), electricity (commercial) and petrol (3% each), electricity (railway traction) (2%) and furnace oil (1%). However, the prices of aviation turbine fuel (1%) declined.
The index for Manufactured Products, which has weight of almost 65% in the WPI, rose by 0.2% to 138.6 (Provisional) from 138.3 (Provisional) for the previous month. Under this segment of WPI, the index for 'Food Products', the index for 'Beverages, Tobacco & Tobacco Products', the index for 'Paper & Paper Products', the index for 'Chemicals & Chemical Products', the index for 'Machinery & Machine Tools' showed the surge in prices for the month of September. However, the index for 'Textiles', the index for 'Wood & Wood Products', the index for 'Leather & Leather Products', the index for 'Rubber & Plastic Products' showed decline in price in September compared to the month of August.
The government also revised upward inflation data for the month of July, after the revision, the inflation number for July stood at 9.36% compared to 9.22% estimated earlier. As the headline inflation remained closed to the two digit mark, which remains above the RBI’s comfort zone, making a strong case for another hike of 25 basis points. The RBI’s next monetary policy review is scheduled for October 25.
The Indian economy has been experiencing slowdown in the pace of growth, because of weak global economic situation and hovering headline inflation in domestic economy. The industrial production for the month of August stood at 4.1% compared to 3.84% in July, and GDP growth in the first quarter of 2011-12 also fell to its 6-quarter low level of 7.7% compared to 8.8% in April-June 2010. Experts from private and public sector have been advocating a halt in RBI’s key policy rates, as the increase in cost of capital is affecting the investment in economy, thereby growth. However, earlier this week, the RBI Governor, D Subbarao, had said that the rate hikes have affected industrial activities, but asserted that inflation continues to remain above the comfort levels. By adding further he said that interest rates would come down only if inflation eased.
India VIX, a gauge for market’s short term expectation of volatility lost 8.00% at 25.98 from its previous close of 28.24 on Thursday. (Provisional)
The S&P CNX Nifty gained 53.50 points or 1.05% to settle at 5,131.35. The index touched high and low of 5,141.40 and 5,056.60 respectively. 34 stocks advanced against 16 declining ones on the index. (Provisional)
The top gainer on the Nifty were, Jindal Steel up 5.36%, Wipro up 3.98%, TCS up 3.87%, Bharti Airtel up 3.81% and IDFC up 3.57%.
On the other hand, Sesa Goa down 4.41%, Tata Steel down 3.57%, DLF down 3.02%, Coal India down 2.94% and Maruti Suzuki down 2.72% were the top losers. (Provisional)
The European markets are trading in green, with France's CAC 40 up 1.02%, Germany's DAX up 1.12% and FTSE 100 up 1.18%.
Most of the Asian equity indices ended the day’s trade in the negative terrain on last trading day of the week after rating agency Standard & Poor’s cut Spain’s sovereign credit rating, renewing concerns about the extent of Europe’s fiscal woes. The ranking was reduced by one level to AA-, with the outlook remaining negative. Recently, Fitch Ratings downgraded Spain to the same level on October 7. Moreover, Chinese shares snapped a three-day winning streak and edged lower on Friday as some investors took profits following a rally this week while, Taiwan Weighted ended with a cut of about a percent amid lingering concern that the euro zone crisis could hit financial companies and tech exporters. However, Seoul’s benchmark reversed its earlier fall and snapped the day’s trade with a gain of over half a percent, extending their gaining streak to a seventh straight session, buoyed by firm gains in telecoms issues. Asian Indices | Last Trade | Change in Points | Change in % | Shanghai Composite | 2,431.37 | -7.42 | -0.30 | Hang Seng | 18,501.79 | -256.02 | -1.36 | Jakarta Composite | 3,664.68 | -10.70 | -0.29 | KLSE Composite | 1,442.43 | -2.44 | -0.17 | Nikkei 225 | 8,747.96 | -75.29 | -0.85 | Straits Times | 2,744.17 | 10.20 | 0.37 | Seoul Composite | 1,835.40 | 12.30 | 0.67 | Taiwan Weighted | 7,358.08 | -70.25 | -0.95 |
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