Post Session: Quick Review

Bulls after taking a breather in the last session, resumed their northbound journey on Wednesday. The session turned out to quite choppy, once giving out an impression that it would be yet another down session of performance, however the recovery which took place in the last hours of trade pulled the benchmarks modestly higher for the day.

For the second consecutive day domestic happenings kept the momentum going at Indian equity markets amidst mixed global cues. In the early deals, benchmarks rose higher after the government liberalized FDI limits in a dozen sectors, including allowing 100 per cent FDI in telecom and higher limits in state-of-the-art defence manufacturing to shore up foreign investments and boost the sagging economy, triggering buying by participants.

Though profit-booking, which dragged benchmarks below the neutral line in afternoon deals, was reciprocated with recovery in the dying hours of trade. Thus, by the end of the trade, benchmark indexes, Sensex and Nifty, gaining modestly, ended above the crucial 19,900 and 5950 levels respectively.

On the global front, while Asian pacific shares mostly ended in green on expectations that Federal Reserve Chairman Ben Bernanke will reiterate later in the day that US monetary policy is to stay accommodative, European shares adopted a cautious approach ahead of Bernanke’s testimony that would provide clarity on when the US central bank bond-buying programme.

Closer home, bit of the disappointment crept in the markets with Q1FY4 earnings of HDFC bank. Although the bank reported a 30% rise in first-quarter net profits, in line with expectations, boosted by higher fee income and credit growth, its asset quality worsened slightly, with net nonperforming loans as a percentage of total assets coming at 0.3% compared with 0.2% a year ago, which led to a 2% cut in HDFC Bank stocks. However, gains of other index heavyweight stocks, viz, Reliance Industries, L&T, TCS etc, provided comfort to the jittery investors.

Meanwhile, few sectors which drove back gains, stocks from Fast Moving Consumer Goods (FMCG), Consumer Durables (CD) and Information Technology counters were the top performers. On the flip side, stocks from Banking, Metal and Auto counters reeled the most under selling pressure. In other sector specific activity, telecom stocks, viz, Reliance Communication, Bharti Airtel and Idea Cellular, gained on approval for raising the foreign investment limit in the sector to 100 percent from the current 74 percent. However, fertilizers stocks ended bit worried ahead of EGOM meet later in the day to consider abolishing the priority ranking in natural gas allocation so that the fuel currently consumed by urea plants can also be diverted to fuel-starved power plants. Currently, natural gas is first given to urea manufacturing fertiliser plants, then to LPG units, followed by power plants, city gas, steel and refineries. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1031: 1291, while 144 scrips remained unchanged. (Provisional)

The BSE Sensex gained 76.06 points or 0.38% to settle at 19927.29.The index touched a high and a low of 19983.22 and 19778.54 respectively.  The BSE Mid cap and Small cap indices ended lower by 0.59% and 0.19% respectively. (Provisional)

On the BSE Sectoral front, FMCG up by 3.24%, Consumer Durables up by 1.08%, IT up by 0.91%, Oil & Gas up by 0.61% and Power up by 0.32% were the top gainers, while Bankex down by 2.22%, Metal down by 1.94%, Auto down by 0.99%, Realty down by 0.82% and PSU down by 0.73% 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 Hindustan Unilever up by 9.04%, Wipro up by 2.97%, NTPC up by 2.48%, ITC up by 2.18% and Tata Power up by 2.02%. On the flip side, Tata Steel down by 3.26%, HDFC Bank down by 2.36%, ICICI Bank was down by 2.29%, Mahindra & Mahindra was down by 2.23% and Jindal Steel was down by 2.03% were the top losers on the Sensex. (Provisional)

Meanwhile, Finance Minister P Chidambaram has exuded confidence of inflation figures cooling down to tolerable levels, provided the crude prices do not rise again. Chidambaram underscored that, although government has taken quite a few steps until now, more measures will be taken on the supply side bottlenecks to moderate the inflation. Inflation, hovering around nine per cent, has been brought down to below five per cent in the last nine months. However, after a decline for four months, it again shot up to 4.9 per cent in June.

Additionally, Finance Minister, besides assuring investors of financing Current Account Deficit (CAD) without dipping forex reserves, as seen in the year gone by, has also promised more policy decisions in the coming days. This time around, Chidambaram is confident of containing CAD below the 2012-13 level of 4.8 per cent of the gross domestic product (GDP).

Meanwhile, putting the blame on the economy's current state of affairs at the doors of his predecessor Pranab Mukherjee, Chidambaram said the post-crisis stimulus packages announced by the government were chiefly responsible for the slowdown in growth, given that the economy grew at nine per cent between 2004 and 2008.

India VIX, a gauge for markets short term expectation of marginally gained 1.94% at 19.36 from its previous close of 18.99 on Tuesday. (Provisional)

The CNX Nifty gained 10.00 points or 0.17 % to settle at 5,965.25. The index touched high and low of 5,989.80 and 5,926.75 respectively. Out of the 50 stocks on the Nifty, 20 ended in the green, while 30 ended in the red.

The major gainers were Hindustan Unilever up 9.13%, Asian Paints up by 3.50%, Ambuja Cements up by 2.97%, NTPC up by 2.48% and ITC up by 2.32%. The key losers were Tata Steel down by 3.44%, Bank of Baroda down by 3.18%, Axis Bank down by 3.08%, M&M down by 2.79% and Ranbaxy down by 2.78%.(Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.45%, Germany’s DAX down by 0.59% and the United Kingdom’s FTSE 100 down by 0.53%.

Asian markets concluded Wednesday’s trade mostly in green on reports that foreign investment in China jumped by 20%. Concerns, however, remained over an early exit of US quantitative easing ahead of Bernanke’s testimony to the US Congress. China’s Shanghai Composite Index concluded the trade in red led by selling of property stocks. The growth of foreign direct investment (FDI) in China accelerated surprisingly in June, a rare piece of good news when the world’s second-largest economy reported a slew of disappointing data. The Ministry of Commerce stated that foreign investors channeled altogether $14.4 billion into China last month, up 20.1% from a year earlier. The pace quickened sharply from the increase of 0.29% in May, and extended the growth streak to a fifth month in a row. The country attracted a total of $61.9 billion foreign investment in the January-June period, up 4.9% on an annual basis. The Commerce Ministry spokesman added that the growth of China’s domestic consumption is expected to maintain momentum in the second half of the year.

Jakarta Composite ended in green; tight competition among lenders and rising risks on non-performing loans has caused Indonesia’s lenders to see a slowing profit growth, while having to cope with rising costs due to inflation. Bank Indonesia reported that the total combined net income of the country’s commercial banks slowed in the first five months of this year. It had kept the benchmark policy rate at a record low 5.75 percent since February last year before raising it for a total of 75 basis points in the past two months, in a bid to contain inflation after subsidized fuel prices increased by an average 33% last month.

South Korean market concluded in green as upbeat economic data from China eased market concerns caused by the scheduled congressional testimony by Federal Reserve Chairman Ben Bernanke. Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting the island’s economic growth last quarter may be lower than the government initially estimated. Non-oil domestic exports slid 8.8% from a year earlier, falling for a fifth month, the trade promotion agency reported.

The Philippine government's outstanding debt as of end-May went up by 4.2% year on year on back of sharp rise in local loans. The Bureau of Treasury reported that national government’s debt as of May hit 5.36 trillion pesos ($123.73 billion), 64.5% of which was sourced from domestic creditors. The rest was owed to foreign creditors.