Post Session: Quick Review

Bulls extended their celebratory mood for third consecutive session, helping the benchmark equity indices to add another quarter of a percent gains to their kitty on Monday. The session turned out to be quite enthralling and benchmarks picked up momentum after early noon deals, mainly post the release of June headline inflation numbers. After digesting slew of negative macro-economic reports on Friday, investors took a heart from the lower than expected June WPI figures. Although, India’s annual rate of inflation, based on monthly WPI, shot up to 4.86% (Provisional) for the month of June, 2013 as compared to 4.70% in May,  the figure was below expected.  Besides, positive global cues also added to the upside for benchmark indexes, Sensex and Nifty, which ended past the crucial 19,950 and 6,000 levels respectively. Meanwhile, broader indices outperforming larger peers, enticed gains of close to a percent.

On the global front, taking cues from positive Asian counter-parts, European shares crept higher early on Monday, after in-line data from China assuaged investor concerns over a sharp slowdown growth in the world’s second biggest economy.

Closer home, stocks from Realty, Fast Moving Consumer Goods (FMCG) and Capital Goods counters were the prominent gainers, while those belonging to Power and Information Technology counters were the losers. Meanwhile, banking pivotal gained despite RBI imposing fines totaling Rs 49.5 crore on 22 private and public sector banks including SBI, PNB and Yes Bank for violating know your customer/anti-money laundering norms. Additionally, PSU OMC’s, viz, HPCL and Indian Oil Corporation gained after petrol prices were raised by Rs 1.55 a litre, excluding local sales tax or VAT, with effect from July 14 midnight. On the flip side, losses of IT bellwether Infosys had a rub-on effect on entire pivotal. Shares of Infosys plummeted over 2% after the stock witnessed a smart rally in the previous session on better than expected first quarter earnings. However, the losses of the counter were capped after Indian rupee depreciated past 60/$ mark in the intra-day trade. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1343: 967, while 135 scrips remained unchanged. (Provisional)

The BSE Sensex gained 76.01 points or 0.38% to settle at 20034.48.The index touched a high and a low of 20072.44 and 19883.19 respectively.  The BSE Mid cap and Small cap indices ended higher by 0.90% and 0.80% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 1.94%, FMCG up by 1.19%, Capital Goods up by 0.89%, Oil & Gas up by 0.72% and Bankex up by 0.71% were the top gainers, while Power down by 0.78% and IT down by 0.03% were the only losers in the space. (Provisional)

Out of the 30 stocks on the Sensex, 15 settled higher, while 15 stocks ended in red. The top gainers on the Sensex were Hindalco Industries up by 3.69%, Sterlite Industries up by 3.28%, Bharti Airtel up by 3.20%, Mahindra & Mahindra up by 2.46% and TCS up by 2.20%. On the flip side, Coal India down by 2.50%, Infosys down by 2.17%, NTPC was down by 2.16%, Tata Steel was down by 2.07% and Tata Power was down by 1.17% were the top losers on the Sensex. (Provisional)

Meanwhile, deviating from last three months of easing trend and adding to the woes of policy-makers, the annual rate of inflation, based on monthly WPI, shot up to 4.86% (Provisional) for the month of June, 2013 (over May, 2012) as compared to 4.70% (Provisional) for the previous month and 7.58% during the corresponding month of the previous year. However, the rate of uptick was lower than expected. Build up inflation in the financial year so far, was 1.53% compared to a build-up rate of 2.30% in the corresponding period of the previous year. Meanwhile in a pleasant surprise, April inflation figures were revised downward to 4.77% from 4.89%.

Manufactured products, which carry weight of 64.97% in the index, rose by 0.1% to 149.3 (Provisional) from 149.1 (Provisional) for the previous month. The index for 'Food Products' group rose by 0.4% to 167.7 (Provisional) from 167.1 (Provisional) for the previous month. The index of Fuel & Power, which has weight of 14.91%, rose by 1.0% to 194.0 (Provisional) from 192.0 (Provisional) for the previous month due to higher price of light diesel oil and naphtha (3% each), non-coking coal, furnace oil  and petrol (2% each) and high speed diesel and bitumen (1% each).

The index of Primary Articles, having weight of 20.12% too rose by 1.4% to 232.5 (Provisional) from 229.3 (Provisional) for the previous month. The index for 'Non-Food Articles' group rose by 0.1% to 208.8 (Provisional) from 208.5 (Provisional) for the previous month, however the index for 'Minerals' group declined by 6.2% to 324.9 (Provisional) from 346.5 (Provisional) for the previous month.

Adding to the set of gloomy data, headline inflation edged higher after a surprise drop in industrial output, a fall in exports and higher retail inflation. However, core wholesale price index, or inflation that excludes volatile food and fuel prices, is estimated to have eased to 2% from an annual 2.4% rise in May, which may provide the central bank with some room to cut policy rates by 25 basis points in its policy review at the end of this month.

India VIX, a gauge for markets short term expectation of mariganlly gained 0.53% at 18.79 from its previous close of 18.69 on Friday. (Provisional)

The CNX Nifty gained 21.15 points or 0.35 % to settle at 6,030.15. The index touched high and low of 6,038.20 and 5,980.95 respectively. Out of the 50 stocks on the Nifty, 33 ended in the green, while 17 ended in the red.

The major gainers were Punjab National Bank up 5.30%, Bank of Baroda up by 4.31%, Cairn India up by 3.96%, Jaiprakash Associates up by 3.91% and Hindalco Industries up by 3.34%. The key losers were Coal India down by 2.57%, NTPC down by 2.22%, Tata Steel down by 2.13%, Infosys down by 2.08% and BHEL down by 1.35%.(Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.50%, Germany’s DAX up by 0.18% and the United Kingdom’s FTSE 100 up by 0.32%.

Asian markets concluded the Monday’s trade on firm note despite the data showed that China’s economic expansion slowed in the second quarter, though it was in line with market estimates. The country’s GDP eased further to 7.5% in the second quarter from 7.7% in the first three months, reflecting a weakening recovery in the world’s second-largest economy. The country’s gross domestic product expanded to 24.8 trillion yuan ($4 trillion) in the first half, up 7.6% from a year earlier. The country’s industrial production expanded 9.3% year on year during the January-June period, down 0.2% points from that in the first three months. Besides, China’s nominal retail sales grew 12.7% year on year to 11.08 trillion yuan ($1.8 trillion) in the first half of 2013. The growth rate picked up by 0.3% point from the first quarter.

Jakarta Composite too concluded the trade in green. A survey from the central bank showed Indonesian consumers were more confident over the current economic conditions thanks to optimism over job availability in the country. The central bank’s survey, which was based on sampling from around 4,600 households in 18 of the nation’s largest cities, showed the Consumer Confidence Index rose by 5.4 points to 117.1 points in June. A level of more than 100 points indicates that consumers are generally optimistic about the economy.

South Korean shares and the Philippine stock too ended the trade in green and investors heaved a sigh of relief as China’s gross domestic product growth was higher than market consensus. Japanese Nikkei remained shut for the trade today on account of ‘Marine Day’ public holiday.