Post Session: Quick Review

Start of the fresh month F&O series was unable to see any respite in Indian equity markets, which for third consecutive session replicated somberness. In the highly volatile session of trade, benchmarks struggled for the direction and in absence of any positive catalyst finally settled in the favour of red.  Lack of investors' conviction was firmly evident in today’s trading session as every small rise was reciprocated with profit-booking. Investors remained reluctant to initiate large bets and evidently preferred to remain on sidelines ahead of RBI’s monetary policy review on July 30, 2013, which would dictate the near term trends of local equity markets. By the close of trade, Sensex and Nifty, offloaded over quarter of a percent to conclude below the psychological 19,800 and 5,900 levels respectively. The session turned out to be worse for broader indices, which went home with loss of close to a percentage points. For the week, Nifty and Sensex, ended with a cut of over 2%.

Listless global cues also failed to render any support to the ailing equity markets. Asian pacific shares witnessed mixed close, with Tokyo tumbling as the US dollar fell to a two-week low against the yen after suffering a sell-off in New York. While, European equity markets turned negative on Friday, giving up their earlier gains, with share price falls for engine maker Rolls Royce and carmaker Daimler taking the most points off a key index.

Closer home, slew of disappointing earnings mainly led to another down session of trade at Dalal-Street. Trade took a turn for the worst after country’s leading public sector lenders, Punjab National Bank (PNB) posted a marginal rise of 2.38% in net profit on y-o-y basis to Rs 12.75 billion for the quarter ended June 30, 2013, which sent its shares spiraling down by 5%. Sentiments further took a hit after FMCG giant, HUL reported 23% YoY fall in net profit numbers at Rs 1020 crore for the quarter ended June 30. Meanwhile, disappointment also crept in from Bank of India and Dish TV Q1FY14 earnings.  However, sharp slide of bourses was prevented by uptrend of some index heavyweights such ITC, Sun Pharmaceuticals and Bharti Airtel.

On the BSE sectoral front, shares from HealthCare, Fast Moving Consumer Goods and Consumer Durable counters were the top performers, while those from Metal, Realty and Public Sector Undertaking (PSU) counters were the top laggards. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 862: 1403, while 160 scrips remained unchanged. (Provisional)

The BSE Sensex lost 56.96 points or 0.29% to settle at 19747.80.The index touched a high and a low of 19907.45 and 19699.76 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 0.96% and 0.81% respectively. (Provisional)

On the BSE Sectoral front, Health Care up by 0.23%, FMCG up by 0.22% and Consumer Durables up by 0.18% were the only gainers, while Metal down by 3.21%, Realty down by 1.66%, PSU down by 1.44%, Bankex down by 1.37% and Capital Goods down by 1.06% were the top losers. (Provisional)

The top gainers on the Sensex were ITC up by 2.65%, Wipro up by 2.56%, Sun Pharma up by 2.44%, Hero MotoCorp up by 2.23% and Mahindra & Mahindra up by 1.69%, while, Hindalco Industries down by 7.73%, Coal India down by 4.19%, Sterlite Industries down by 3.74%, Hindustan Unilever down by 3.69% and Jindal Steel down by 3.46% were the top losers in the index. (Provisional)

Meanwhile, global rating agency Crisil has revised downwards its India's GDP growth forecast to 5.5 percent this fiscal from its earlier estimate of 6 percent, citing reduced likelihood of monetary easing going forward due to falling rupee.

Crisil has joined ADB and several brokerages who have pegged the GDP forecast lower after RBI last week came out with a slew of steps to squeeze liquidity out of the system to stabilise the continuously depreciating rupee. CRISIL report in view of these action feels that stress will increase in sectors such as power, construction, engineering, and steel, and lead to higher non-performing assets in the banking system. While, India’s economic recovery will take longer than previously expected.

The Crisil report has highlighted that challenges faced by Asia’s third largest economy are mainly domestic as the global environment is more stable now than in 2009. The recent measures by RBI have significantly diminished probability of a repo rate cut during the remaining part of the current fiscal. In its view RBI's measures will push up the inter-bank rates, impacting the cost of borrowing for banks, which in turn is likely to affect lending rates in the future and the demand in rate-sensitive sectors will remain under pressure.

India VIX, a gauge for markets short term expectation of marginally gained 0.38% at 16.78 from its previous close of 16.72 on Thursday. (Provisional)

The CNX Nifty lost 16.50 points or 0.28% to settle at 5,891.00. The index touched high and low of 5,944.50 and 5,869.50 respectively. 19 stocks advanced against 31 declining on the index. (Provisional)

The top gainers on the Nifty were Ambuja Cements up by 5.23%, ITC up by 2.76%, Sun Pharma up by 2.35%, Hero MotoCorp up by 2.22% and M&M up by 1.88%

On the other hand, Hindalco Industries down by 7.68%, PNB down by 5.58%, Sesa Goa down by 4.82%, Coal India down by 4.20% and industan Unilever down by 3.77%.

Most of the European markets were trading in red; Germany’s DAX down by 0.46% and the United Kingdom’s FTSE 100 down by 0.15%, while France’s CAC 40 up by 0.41%.

The Asian markets concluded Friday’s trade mostly in red. Japanese stocks tumbled to snap a five-week winning streak, as exporters skidded on the yen’s strength. Japan’s consumer prices managed to register mild inflation in June compared with a year earlier, data from the Finance Ministry showed. The core consumer price index, which excludes volatile fresh-food costs, rose 0.4% from June 2012, though it was unchanged compared to May’s levels. Meanwhile, July’s core CPI for metropolitan Tokyo -- seen as a leading indicator for the nation as a whole -- also scored a price gain, rising 0.3% on an annual basis, though it too was unchanged from the previous month.

China’s Shanghai Composite shares fell with the key index heading for a three-day losing streak, after the government ordered companies in 19 industries to cut outdated production capacity. The country’s business sentiment dropped for the second consecutive month in July to the lowest level since October due to the recent liquidity squeeze. The monthly MNI China Business Indicator declined to 53.4 in July from 54.9 in June. According to the report, firms’ ability to obtain credit worsened to the lowest since October 2011, while the interest rates they faced rose to a one-year high.

Indonesia’s Jakarta Composite concluded the trade in red. The country’s central bank stated that current account deficit in the second quarter widened to 3.5% of gross domestic product, from 2.4% in the first quarter, due to seasonal factors. But the deficit will narrow to 2.5% in the July-September period. Concerns over Indonesia’s current account deficit, and rising inflation, helped trigger a heavy sell-off in its bonds, stocks and currency recently. The central bank is scheduled to announce Q2 balance of payment data on August 16, a day after it holds its monthly interest rate meeting. Indonesia’s rupiah fell by the most since September 2011 this week as the central bank allows a more rapid slide toward levels quoted in the offshore market.

Singapore’s resale price index for public housing flats, which are built and sold by the government to local resident households, rose slightly by 0.5% in the second quarter after several rounds of cooling measures, the country’s Housing Development Board (HDB) reported. The Q2 index is lower than the 1.3% growth in the previous quarter and the lowest quarterly growth since the first quarter in 2009.