Post Session: Quick Review

Indian equity markets extended last session’s colossal losses on Wednesday as murky macro-economic data prints, which exasperated the RBI policy dilemma, weighed heavily on investors’ sentiment. On the macro-front, putting India’s apex bank in a tight sport, India’s industrial output rose a lower-than-expected 2% during April, while retail inflation sprinted to 9.31% against the expectation of sub 9%.

Additionally, pessimistic global cues also aggravated the selling pressure at D-street, which led to over half a percent cut in benchmark indexes, Sensex and Nifty, which ended a little above 19,000 and 5750 level respectively. Though, the level of 5750 proved to be strong support level for Nifty as any attempts beyond this level were reciprocated with recovery.

However, the session turned out to be quite distressing as benchmarks did not once breakout in green and continued to languish in red terrain by the close of trade. Although, benchmarks recovered significant ground post dipping to day’s lowest level, in a knee jerk reaction to the dismal IIP and CPI data, but the recovery were short-lived as selling soon resumed, which dragged the benchmarks back deep into red. Nevertheless, buying which took place in the dying hours of trade aided the benchmarks in cutting short some losses. Availability of blue chip stocks at lucrative prices mainly drew some bargain buyers by the close of the trade.

Meanwhile, on the global front, Asian shares hit fresh 2013 lows and Japanese stocks had another volatile session on Wednesday, extending a broad rout in global equities, as the lack of new steps from the Bank of Japan to quell tumult in the domestic bond market and lingering fears of a softening of US stimulus unnerved investors. European shares recovered partial losses with investors looking ahead to industrial production data for the euro zone.

Closer home, the losses of bourses to some extent were limited by recovery of Rupee from record low level after RBI announced steps to check free-fall in rupee, raising the limit for online repatriation of export proceeds by over three-fold to $ 10,000. Additionally, buying in Oil & Gas, Health Care and Realty counters also prevented free-fall of bourses for second consecutive session. However, stocks from Consumer Durable, Metal and Information Technology counters were the worst hit of the session, languishing at the bottom. Even banking shares recovered substantial losses after being hurt by the dented rate cut hopes on account of higher than expected retail inflation data.  The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 967: 1398, while 125 scrips remained unchanged. (Provisional)

The BSE Sensex lost 87.75 points or 0.46% to settle at 19055.25.The index touched a high and a low of 19143.24 and 18969.08 respectively. Among the 30-share Sensex pack, 10 stocks gained, while 20 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.49% and 0.51% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 0.55%, Health Care up by 0.47% and Bankex up by 0.05% were the only gainers, while Consumer Durables down by 7.32%, Metal down by 1.78%, IT down by 1.26%, Teck down by 1.04% and  Power down by 1.02% were the top losers. (Provisional)

The top gainers on the Sensex were Jindal Steel up by 3.80%, Cipla up by 1.00%,  Mahindra & Mahindra up by 0.78%, RIL up by 0.65% and SBI up by 0.62%, while, Tata Power down by 3.03%, Coal India down by 2.69%, Tata Steel down by 2.61%, Hero MotoCorp down by 2.37% and Hindalco Industries down by 2.27% were the top losers in the index. (Provisional)

Meanwhile, piling up pressure on the Reserve Bank of India (RBI) to cut rates in the policy review slated next week, India's annual industrial output growth measured by index of industrial production (IIP) rose by 2% at 167.3 for the month of April 2013, lower than street’s expectation and previous month’s growth figure of 2.5%, later revised sharply higher to 3.4%. The cumulative growth for the period April-March 2012-13 over the corresponding period of the previous year stood at 1.1%.

Major disappointment came from capital goods output, a key investment indicator, which grew by mere 1% after growing by 9.5% in March. Further, mining sector, continuing to show contraction stood at 2.4% for April 2013. However, manufacturing sector, which constitutes about 75.53% of industrial production, grew by 2.8% from a year earlier.

Meanwhile electricity sector too, expanded by 4% from a year earlier. The cumulative growth in the three sectors during April-March 2012-13 over the corresponding period of 2011-12 has been (-) 2.4%, 1.2% and 4.0% respectively. Further, Consumer goods grew by 2.8%, driven by growth of Consumer durables and Consumer non-durables at -8.3% and 12.3% respectively.

Although the IIP figures point to an expansion in factory output in the first month of the fiscal year, the slow pace does not suggest a strong revival in Asia's third-largest economy after it posted a decade-low growth for the fiscal year to March 2013. These figures along with CPI numbers exasperate the RBI policy dilemma, as on one hand is the slowing industrial growth and on the other is strong depreciation of Indian currency, which may force India’s apex bank to maintain a status quo on the policy front on June 17.

India VIX, a gauge for markets short term expectation of volatility lost 3.28% at 18.85 from its previous close of 19.49 on Tuesday. (Provisional)

The CNX Nifty lost 23.65 points or 0.41% to settle at 5,765.15. The index touched high and low of 5,792.90 and 5,738.60 respectively. 21 stocks advanced against 29 declining on the index. (Provisional)

The top gainers on the Nifty were Jindal Steel up by 3.47%, IndusInd Bank up by 2.96%, JP Associate up by 2.53%, IDFC up by 2.04% and Lupin up by 1.97%

On the other hand, Reliance Infrastructure down by 3.95%, Axis Bank down by 3.28%, Coal India down by 3.00%, Tata Power down by 2.85% and Tata Steel down by 2.76%.

The European markets were trading in green; France’s CAC 40 up by 0.51%, Germany’s DAX up by 0.12% and the United Kingdom’s FTSE 100 up by 0.08%.

Asian stock markets ended mostly lower on Wednesday as the lack of new steps from the Bank of Japan to quell tumult in the domestic bond market extended losses. After spending most of the day deep in negative territory, Japan’s Nikkei stocks swung upward in the afternoon to end with only mild losses. Meanwhile, South Korea closed lower, after the nation’s factory production lagged estimates and retail inflation accelerated.

Markets in China, Hong Kong and Shanghai were closed for the Dragon Boat Festival.