Post Session: Quick Review

After taking a breather in the previous trading session, Indian equity markets resumed their declining trajectory on Thursday. However, what seemed as an exceptional session of trade turned out to be a disappointing one as benchmark indices after recovering substantially from day’s low slipped into negative terrain in the final hours, mainly as investors lacked the conviction of staying long in risky equities.  Negative regional counterparts and sharp slide of rupee mainly prompted investors to book profits at higher levels. By the close of trade, Sensex and Nifty despite in red, settled above the crucial 19500 and 5900 marks, which turned out to be strong support level for them. However, the session was less grueling for broader indices, which managed to eke out some gains. Nevertheless, the downtrend of the bourses remained capped on account of positive trade of European counterparts and on domestic front with the statement of chairman of the planning commission, Montek Singh Ahluwalia that fiscal deficit is coming under control, soothed some nerves.

On the global front, Asian shares tumbled to fresh 2013 lows on Thursday as growing uncertainty on whether the US Federal Reserve would roll back its stimulus this year kept markets on edge. Meanwhile, European shares inched higher as investors awaited policy announcement from European Central Bank and Bank of England. The expectation is that ECB will probably keep its benchmark interest rate unchanged at record low of 0.5% when it meets later today.

Closer home, retracement of Indian currency from 57/$ level allayed some investors fears, besides soothing statements from Finance Minister Chidambaram, who said that there was no cause for alarm and the currency will soon find its stable level. Stocks from rate sensitives Banking and Realty counters mainly were the major pockets of strength. Support to some extent was rendered from companies which may apply for banking licenses after Finance Minister P. Chidambaram today expressed hope that some new bank licences would be issued before March next year. IDFC, L&T Finance Holdings, LIC Housing Finance and Reliance Capital all rallied in the range of 0.50-1.50%. However, much of the lower pressure was exerted by stocks belonging to Health Care, Oil & Gas and Power counters. Meanwhile, even Shares in jewellery companies such as Rajesh Exports, Goenka Diamonds, TBZ slipped after the government increased import duty on gold by a third to 8 percent to control current account deficit.

The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 1140:1126, while 136 scrips remained unchanged. (Provisional)

The BSE Sensex lost 48.73 points or 0.25% to settle at 19519.49.The index touched a high and a low of 19635.37and 19395.32 respectively. Among the 30-share Sensex pack, 10 stocks gained, while 19 stocks declined and 1 remained unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.11% and 0.14% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 0.83%, Realty up by 0.48% and Capital Goods up by 0.28% were the only gainers, while Health Care down by 1.19%, Oil & Gas down by 0.72%, Power down by 0.59%, Metal down by 0.41% and TECK down by 0.40% were the top losers. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 1.70%, Wipro up by 1.38%, Maruti Suzuki up  by 1.19%, SBI up by 0.86% and L&T up by 0.61%. while, Bharti Airtel down by 2.17%, Sun Pharma down by 1.87%, NTPC down by 1.85%, Infosys down by 1.41% and Tata Steel down by 1.30% were the top losers in the index. (Provisional)

Meanwhile, in an attempt to rein in surging demand for the precious metal like gold, the government has raised the import duty to 8% from 6% for the second time in six months. India is the largest consumer of gold and the recent drop in its price has further boosted demand. This move is likely to result in a sharp decline in shipments over the next couple of months.

In May, India’s gold imports touched 162 tonnes, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Strong demand of gold has become a worrying factor for the Indian policymakers, as the country is facing a record current account deficit (CAD), partly stoked by Indian consumers’ appetite for the yellow metal. The CAD widened to a record high of 6.7% in the third quarter of FY13. 

Recently, the World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put restrictions on banks on gold imports.    

India VIX, a gauge for markets short term expectation of volatility gained 0.57% at 17.35 from its previous close of 16.78 on Wednesday. (Provisional)

The CNX Nifty lost 2.45 points or 0.04% to settle at 5,921.40. The index touched high and low of 5,956.55 and 5,869.50 respectively. 22 stocks advanced against 28 declining on the index. (Provisional)

The top gainers on the Nifty were Reliance Infra up by 3.25%, HCL Technologies up by 2.71%, Axis Bank up by 2.66%, Ambuja Cement up by 2.51% and Bank of Baroda up by 2.34%

On the other hand, Bharti Airtel down by 2.53%, Lupin down by 1.86%, Infosys down by 1.75%, Sun Pharma down by 1.70% and NTPC down by 1.66%.

The European markets were trading in green; France’s CAC 40 up by 0.45%, Germany’s DAX up by 0.17% and the United Kingdom’s FTSE 100 up by 0.03%.

Asian equity markets closed shutter on a weak note after touching fresh lows in 2013 on Thursday, following a lower-than-expected growth in private sector employment in May in the world's top economy. Japan's benchmark Nikkei ended below 13,000 for the first time in two months on extending its decline from a 5-1/2 year high hit last month to the verge of bear-market territory. Shares in Taiwan came under pressure as investors took cues from a plunge suffered by Wall Street.

Stock markets in China, Indonesia and South Korea remained shut for the trade today on account of public holidays.