Post Session: Quick Review

After a day of showing firmness, Indian equity markets turned volatile on Wednesday. Though, the start was good tailing gains in the other global markets, but the cautiousness emerged with the Chinese trade data that indicated the recovery in the emerging market to be slower than expected. The choppiness in rupee too weighed on the sentiments of the traders, the Indian currency that has recovered in last session on the SEBI and RBI’s measures to rein in its fall, once again depreciated in early deals, despite RBI’s further efforts to check the fall, asking each state-run oil company to buy dollars from a single bank. Oil firms seeking multiple quotes for their dollar requirement was felt to be one of the reasons adding to speculation in the currency market. There was some concern with International Monetary Fund (IMF) lowering India's growth projections for 2013-14 to 5.6% from the 5.8% it projected in April.

Indian benchmarks got a positive start as the US markets extended their gains overnight on a good start of the earnings season, while the most of the Asian markets too traded in green, but there was some cautiousness ahead of the minutes of Federal Reserve’s June meeting to be announced later in the day. The weak start of the European markets too weighed on the sentiments of the local markets.

The second half of the trade was marred with the buzz that Finance Ministry in the latest gas pricing formula has called for ceiling and said to Oil Ministry that RIL must deliver outstanding gas at old rate of $4.2, and that upside needs to be capped as it cannot allow unlimited gains to the companies. The statement led to a sharp fall in market heavyweight Reliance Industries along with other oil companies and consequently dragged the markets lower. After the knee-jerk reaction to the report, the market stabilized a bit going towards the closing on report that the government plans to announce the long-awaited mergers and acquisitions guidelines for the telecom sector by the end of the month, paving the way for consolidation. But the markets could not recover much from their lowest points of the day and ended with cut of over half a percent. Sectorally, consumer durables, IT and technology managed to hold their gains till last while the oil & gas, realty and auto were the major laggards of the day.

The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 1156: 1166, while 137 scrips remained unchanged. (Provisional)

The BSE Sensex lost 153.09 points or 0.79% to settle at 19286.39.The index touched a high and a low of 19505.93 and 19237.91 respectively. Among the 30-share Sensex pack, 7 stocks gained, while 23 stocks declined. (Provisional)

The BSE Mid cap ended lower by 0.48%, while Small cap indices ended higher by 0.10%. (Provisional) On the BSE Sectoral front, Consumer Durables up by 1.48%, IT up by 0.86% and Teck up by 0.38% were the only gainers, while Oil & Gas down by 1.74%, Realty down by 1.46%, Auto down by 1.35%, Capital Goods down by 1.15% and Metal down by 1.14% were the top losers. (Provisional)

The top gainers on the Sensex were Wipro up by 1.33%, Tata Power up by 0.94%, Infosys up by 0.69%, Jindal Steel up by 0.55% and TCS up by 0.51%, while, Hindalco Industries down by 2.78%, Mahindra & Mahindra down by 2.58%, Bajaj Auto down by 2.27%, Tata Steel down by 2.20% and BHEL down by 1.93% were the top losers in the index. (Provisional)

Meanwhile, International Monetary Fund (IMF) has lowered India's growth projections for 2013 to 5.6% from the 5.8% it projected in April. In an update to its April World Economic Outlook, IMF said India’s growth would recover to 6.3% in 2014, which is marginally (0.1%) lower than its April forecast. The Indian economic growth slowed down to 5 percent in the previous fiscal, recorded as the slowest in 10 years, as high borrowing costs intended to douse inflation hurt corporate investment and consumer spending, and weak external demand curbed exports growth.  

Further, IMF said that emerging market and developing economies are now expected to grow at a more moderate pace. The growth in emerging markets and developing economies would remain at 5 percent in 2013 and about 5.5 percent in 2014, which represent weaker prospects across all regions. By adding further, it said that many emerging market and developing economies face a trade-off between macroeconomic policies to support weak activity and to contain capital outflows and suggested that macroprudential and structural reforms can help make this trade-off less stark.

Referring to the global growth, IMF said that global growth will recover to above 3 percent in 2013 and 3.75 percent in 2014, which is 0.25 percent weaker for both years than the April 2013 projections. Weaker global demand, slower growth in several key emerging economies and protracted recession in the euro area are the main reasons for lowering the global growth from its earlier projection in April. IMF projected the US growth at1.75 percent for 2013 and 2.75 percent for 2014.  

India VIX, a gauge for markets short term expectation of volatility gained 3.41% at 19.98 from its previous close of 19.32 on Tuesday. (Provisional)

The CNX Nifty lost 46.55 points or 0.79% to settle at 5,812.45. The index touched high and low of 5,879.35 and 5,802.85 respectively. 13 stocks advanced against 36 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Lupin up by 2.87%, HCL Tech up by 2.28%, UltraTech Cement up by 1.64%, NMDC up by 1.26% and Tata Power up by 1.23%

On the other hand, Hindalco Industries down by 3.12%, BPCL down by 3.07%, Bank of Baroda down by 3.05%, M&M down by 2.79% and Cairn down by 2.46%.

The European markets were trading in red; France’s CAC 40 down by 0.41%, Germany’s DAX down by 0.29% and the United Kingdom’s FTSE 100 down by 0.30%.

Most of the Asian equity indices ended the session in the green on Wednesday with Chinese benchmarks surging over half a percent, as sentiments remained up-beat on hopes that Beijing may ease policy to boost growth after feeble trade data earlier in the day. China’s exports fell 3.1 per cent in June from a year earlier, while imports dropped 0.7 percent, severely missing market expectations and reinforcing signs of a second-quarter economic slowdown in the world’s second-largest economy. Meanwhile, Hong Kong shares hit a three-week closing high on Wednesday. However, Japanese Nikkei ended the session in the negative terrain, reversing earlier gains ahead of a speech by US Federal Reserve chief Ben Bernanke, with investors waiting for clues to the future of the bank's stimulus programme.