Post Session: Quick Review

Tuesday turned out to be a day of consolidation for the Indian markets and the bull went for a break after three back-to-back sessions of rally. There was not much on the domestic front that could have supported the markets, while the global cues too remained somber, weighing down the sentiments of the local bourses. Traders remained concerned about the sluggish performance of the eight core sector industries growth, while the Indian rupee too gave up its initial gains adding pressure to the market sentiments. However, the trade remained rangebound and slight selling appeared in the last only, in few particular counters.

The global cues remained mixed, unable to give much direction to the local markets, while the US markets ended higher overnight despite losing some strength, the Asian markets could not follow the trend and ended majorly in red on concern of weakness in the Chinese manufacturing, though the Japanese market surged again, as the yen turned weak in late trade. Though, the European stocks retreated, as investors awaited reports on UK construction activity and US factory orders.

Back home, the domestic markets more or less remained in a range and the major indices Sensex and Nifty gyrated within 140 and 60 points respectively throughout the day, though ending near the lowest point. Traders remained concerned about the economic condition of the country, as after a weak manufacturing PMI report, growth rate of eight core infrastructure industries too slipped to 2.3% in May compared to 7.2% in the same period last year, mainly due to declining output of crude oil, coal, fertiliser and natural gas. Cumulatively, in April-May 2013-14, the eight core sectors registered a growth of 2.4% as against 6.5% in the same period last year. Traders even overlooked the buzz that government is lining up a spate of decisions as part of a campaign of reforms aimed at lifting the economy out of its worst slump in a decade. Even Finance Minister P Chidambaram said that the Union Cabinet will decide on raising FDI caps in different sectors in the third week of this month. Rupee too seemed reversing its early gains on dollar bidding by a large state-run bank, there was report of government’s defence related payment that too weakened the local currency. Broader indices that were outperformer in last session too gave up their gains and ended in red. On the sectoral front, the day was good for the defensive healthcare and consumer durables sector, while the realty, PSU and oil & gas sector stocks suffered maximum selling pressure after their run-up in last few session’s rally.

The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 1121: 1231, while 138 scrips remained unchanged. (Provisional)

The BSE Sensex lost 109.97 points or 0.56% to settle at 19467.42.The index touched a high and a low of 19589.14 and 19442.75 respectively. Among the 30-share Sensex pack, 12 stocks gained, while 18 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.41% and 0.10% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 0.96%, Health Care up by 0.60% and FMCG up by 0.04% were the only gainers, while Realty down by 1.72%, Auto down by 1.08%, PSU down by 1.07%, Capital Goods down by 0.88% and Oil & Gas down by 0.87% were the top losers. (Provisional)

The top gainers on the Sensex were Gail India up by 2.69%, BHEL up by 2.60%, Bharti Airtel up by 2.17%, Sterlite Industries up by 1.79% and ICICI Bank up by 0.97%, while, Jindal Steel down by 3.89%, Tata Power down by 2.32%,  Maruti Suzuki down by 1.99%, ONGC down by 1.74% and Hero MotoCorp down by 1.72% were the top losers in the index. (Provisional)

Meanwhile, Prime Minister's Economic Advisory Council (PMEAC) Chairman, C Rangarajan expects India's economic growth rate to be 6% plus levels in current fiscal and has estimated growth of 6.4%. He said that public sector investments would act as driver of economic growth in this fiscal.

To improve the economic situation, Rangarajan emphasized the need for added focus on the agriculture and power sectors. He maintained that India could record sound economic growth rates even at the reduced investment rates of 30%. He further said that “Investment rate of 30%” is still not low, though it is lower than 2007-08. But it is reasonably high rate. It gives us hope that if obstacles are removed, India can record higher growth rates in the short run.

The Reserve Bank of India has estimated the economy to grow at 5.7% in the current fiscal, while the Finance Ministry has forecast 6.1-6.7% growth. In 2012-13, the growth rate in the fourth quarter was 4.8% while the estimated rate was 5%.

India VIX, a gauge for markets short term expectation of marginally gained 0.66% at 18.21 from its previous close of 18.09 on Monday. (Provisional)

The CNX Nifty lost 38.95 points or 0.66% to settle at 5,859.90. The index touched high and low of 5,898.80 and 5,852.30 respectively. 19 stocks advanced against 30 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy up by 6.81%, Lupin up by 3.20%, Gail up by 2.31%, Bharti Airtel up by 2.14% and BHEL up by 1.98%

On the other hand, Jindal Steel down by 4.29%, DLF down by 3.01%, Axis Bank down by 2.72%, Reliance Infrastructure down by 2.61% and Tata Power down by 2.31%.

The European markets were trading in red; France’s CAC 40 down by 0.39%, Germany’s DAX down by 1.11% and the United Kingdom’s FTSE 100 down by 0.50%.

Asian Markets concluded the trade mostly on negative note, as yesterday’s report of Chinese manufacturing data which weakened in June amid a credit crunch, weighed on the market sentiments. Japan’s Nikkei however touched its highest in nearly five weeks after encouraging manufacturing data in Europe and the United States helped cheer markets fretting about a slowing Chinese economy. The Bank of Japan’s closely watched ‘tankan’ survey, release showed sentiment among large manufacturers turned broadly positive in the April-June quarter for the first time in almost two years. The sentiment reading for large manufacturing enterprises rose to plus 4 from the previous quarters minus 8. A positive number indicates more firms reported favorable conditions than unfavorable conditions. On the economic front, a report from the Bank of Japan showed that the monetary base in Japan spiked 36% year-over-year in June, standing at 163.537 trillion yen. That follows the 31.6% surge in May.

In China, the Shanghai Composite Index gained over half a percent. Korean markets’ ended little changed as investors adopted a cautious approach ahead of second-quarter earnings, while the Hong Kong's market closed in negative terrain after dealers returned from a long weekend to fresh data indicating a slowdown in China’s economy.