Post Session: Quick Review

Final day of the week turned out to be a major disappointing session of trade for the markets, where benchmark indices kept grinding lower after a weak start and halted only at day’s low.  A decade low GDP growth figure for FY13 of 5% cast dark shadow for the markets, while the negative global set-up also played its part out behind the fall of local equity market. Gross domestic product (GDP), a measure of the country's total economic output, expanded at a 4.8% for the fourth quarter ended March 31, 2013 and at decade low level of 5% for FY13. Steadily losing ground throughout the session, both benchmarks, Sensex and Nifty, plummeted close to two and half a percent, to shut shop below the psychological 19800 and 6000 levels respectively.

Though, the selling pressure got a bit arrested with the release of better than expected FY13 fiscal deficit figures but the downtrend resumed with the slide of European markets. In a sign of cheer for the economy, the country's fiscal deficit for FY13 came at 4.89%, lower than the budget estimate of 5.2%, mainly on account of higher non-tax revenue. Meanwhile, investors’ confidence also took a hit with the deceleration of Indian currency to fresh 11 month low, which somewhat supported the Information Technology stocks that rallied to be the sole gainers of the session, given that these firms derive lion share of their revenue in foreign currency. For the week, while Nifty settled flat with positive bias, Sensex managed to eke out gains of close to 0.30%.

On the global front, most of the Asian pacific shares reversing early gains edged mostly lower, while Japanese Equities outperformed, as investors remained concerned over whether the US Federal Reserve might soon taper off the stimulus programme. Asian pacific markets witnessed some early gains after lower-than-expected US GDP figures and rising claims for unemployment benefits reassured investors that the Federal Reserve would not start tapering stimulus anytime soon.

Closer home, the massive plunge of banking stocks too weighed on the sentiment of Indian equity markets. The shares came under pressure after RBI on tightened asset restructuring rules for banks after the weakest economic growth in a decade prompted a surge in bad loans. As per RBI mandate, no banks from April 2015 will have the leeway to relax repayment norms for troubled companies without classifying their loans as non-performing assets, which would lead to a surge in bad loans. Also, Reserve Bank of India’s Governor Duvvuri Subbarao said that retail inflation is still high, and several upside risks to inflation remain, thereby dampening hopes of rate cut at the central bank's June review.  In across the board selling, stocks from Realty, Oil & Gas and bankex counters on BSE were the worst performers. Stocks from Information Technology bucking the negative trend showed resilience and went home with gains of close to a percent. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 818: 1569, while 112 scrips remained unchanged. (Provisional)

The BSE Sensex lost 451.59 points or 2.23% to settle at 19763.81.The index touched a high and a low of 20191.29 and 19730.55 respectively. Among the 30-share Sensex pack, 3 stocks gained, while rest of 27 declined (Provisional)

The BSE Mid cap and Small cap indices ended lower by 2.23% and 1.27% respectively. (Provisional)  On the BSE Sectoral front, Realty down by 3.20%, Oil & Gas down by 2.73%, FMCG down by 2.33%, Bankex down by 2.25% and PSU down by 2.17%, were the top losers, while IT up by 0.94% was the sole gainer in the space.

The only gainers on the Sensex were Infosys up by 2.79%, Sterlite Industries up by 2.58% and TCS up by 0.07%, while, Bharti Airtel down by 4.86%, Gail India down by 4.26%, Jindal Steel down by 4.07%, ITC down by 4.06% and Hindalco Industries down by 3.95% were the top losers in the index. (Provisional)

Meanwhile, much in-line with expectation, India’s economy grew 4.8% in the fourth quarter of 2012-13, better than the 4.5% growth in the previous three months, the lowest figure in fifteen quarters which was later revised to 4.7%. For the full year, the growth was 5%, the lowest in 10-years, but in-line with an official preliminary estimate given in February that pointed to decade low growth of 5%.

Mining sector continued to be a major concern with a contraction of 3.1% in the fourth quarter of the current fiscal year against 0.1% in the same period last year. Agriculture growth also declined to 1.4% in the last quarter compared to 2.0% y-o-y. While, construction and social, personal services also slowed down to 4.4% and 4% in this period against 5.1% and 6.8%, respectively.

However, the manufacturing sector, which has been a cause of concern lately, however, had a silver lining as it grew 2.6% during this quarter against 0.1% in fourth quarter of 2011-12. Additionally, trade, hotels, transport and communication’ grew to 6.2 percent in the fourth quarter while financing, insurance, real estate and business services grew 9.1%.

Showing an increase of 5%, GDP at factor cost at current prices in the year, is estimated at Rs 55,05, 437 crore, as against Rs 52, 43,582 crore in the last fiscal.  Meanwhile, GDP at factor cost at constant (2004-05) prices in Q4 of 2012-13 was estimated at Rs 14,707.82 billion, as against Rs 14,037.27 billion in Q4 of 2011-12. Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 56,94,362 crore in 2012-13 as against Rs 50,56,219 crore in 2011-12. Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 11,86,761 crore in 2012-13 as against Rs 10,42,677 crore in 2011-12.

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 29,64,677 crore in 2012-13 as against Rs 27,49,072 crore in the previous fiscal. In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during 2012-13 are estimated at 29.6% and 33.2%, respectively, as against the corresponding rates of 30.6% and 33.7%, respectively in 2011-12.

Q4 GDP number is not a surprise and suggests only a cyclical and not a structural upturn and hence does not reflect any improvement in growth. A moderate recovery in Indian factories, exports and investments were perhaps the reason for an increase in overall growth in the quarter through March. Data showed year-over-year factory output grew in March, for the third month in a row, after contracting for the majority of last year, while capital goods output - a key barometer of investment - rose for a second straight month, albeit off a low base.

India VIX, a gauge for markets short term expectation of volatility gained 5.92% at 16.99 from its previous close of 16.04 on Thursday. (Provisional)

The CNX Nifty lost 139.60 points or 2.28% to settle at 5,984.45. The index touched high and low of 6,106.25 and 5,975.55 respectively. 5 stocks advanced against 45 declining on the index. (Provisional)

The top gainers on the Nifty were Infosys up by 2.67%, Sesa Goa up by 2.44%, Ambuja Cements up by 0.85%, HCL Tech up by 0.65% and TCS was up by 0.11%. On the other hand, UltraTech Cement down by 5.18%, Reliance Infrastructure down by 4.92%, PNB down by 4.64%, IDFC down by 4.57% and GAIL down by 4.57% were the top losers. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 1.10%, Germany’s DAX down by 0.99% and the United Kingdom’s FTSE 100 down by 1.09%.

Asian equity markets ended mostly lower as investors remained nervous over whether the US Federal Reserve might soon taper off the stimulus programme that has helped send Wall Street soaring. However, Japan's Nikkei outshined its Asian peers and closed with strong gains, after earlier session’s massive fall as exporters took a hit from the dollar's fall against the yen. Hong Kong markets went home with red mark as investors took profit on outperformers. China’s stocks ended lower, paring the benchmark index’s biggest monthly gain this year, ahead of economic data over the weekend.