Post Session: Quick Review

RBI’s monetary policy review failed to create any buzz for Indian equity markets, which prolonging southbound journey for the fourth straight day, ended downbeat on Tuesday. On the macro-front, acting prisoner to the external environment, Reserve Bank of India (RBI), in its ‘First Quarter Review of Monetary Policy 2013-14’, once again did the expected, by maintaining status quo on key rates.

It turned out to be awful session of trade, where traders kept pressing sales on every small rise and by the end of trade, benchmark indices, Sensex and Nifty, nursing colossal losses of over a percent, ended sub 19,400 and 5800 levels respectively. Meanwhile, broader indices showing a degree of underperformance as compared to frontline indices, ended with a cut of around two percent. Downward revisions in economy’s 2013-14 growth and forecast of re-emergence of inflationary pressure apparently did not augur well with the Street, which despite getting inline credit policy amidst positive global set-up, booked profits.

On the global front, Asian markets mostly rebounded from the previous day's losses on bargain buying ahead of a closely watched policy meeting at the US Federal Reserve. Meanwhile, European shares too were trading higher on signs that Spain’s recession was easing and also on a pick-up in German consumer confidence set an upbeat tone ahead of euro zone business and consumer sentiment data later.

Closer home, benchmarks after getting a cautious start, witnessed some upmove after the credit policy, but that proved momentary. The accentuated selling pressure which was witnessed in the early deals abated only with the close of the trade, leaving the benchmarks with a cut of over a percent. Stocks from Oil & Gas, Realty and Power counters were the major laggards dragging the benchmarks lower, while those from Information Technology, Technology and Capital Goods counters restricted the further slide of Indian equity markets. Depreciation of Rupee worked in the favour of Information Technology stocks. Meanwhile, the rupee fell sharply below the psychological 60 per dollar mark after the Reserve Bank of India (RBI) announced the monetary policy as banks adjusted their positions on the expectation that the central bank has limited room now to protect the rupee from falling further. The slide of Rupee battered Oil Marketing stocks, which spelled pessimism for the entire pivotal. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 724: 1542, while 144 scrips remained unchanged. (Provisional)

The BSE Sensex lost 235.85 points or 1.20% to settle at 19357.43.The index touched a high and a low of 19672.72 and 19328.54 respectively. Among the 30-share Sensex pack, 7 stocks gained, while 23 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.96% and 1.74% respectively. (Provisional)

On the BSE Sectoral front, IT up by 0.91% was the only gainers, while Realty down by 3.84%, Power down by 3.58%, Oil & Gas down by 3.58%, PSU down by 3.10% and Auto down by 1.99% were the top losers. (Provisional)

The top gainers on the Sensex were Wipro up by 2.33%, Jindal Steel up by 2.08%, Infosys up by 1.38%, Sun Pharma up by 1.12% and Coal India up by 0.95%, while, ONGC down by 5.85%, Hindalco Industries down by 4.30%, Tata Motors down by 3.99%, Bajaj Auto down by 3.30% and Bharti Airtel down by 3.29% were the top losers in the index. (Provisional)

Meanwhile, the Foreign Investment Promotion Board (FIPB) has cleared six proposals envisaging investments of Rs 855 crore in the pharmaceutical sector. The main proposal approved by FIPB, chaired by Department of Economic Affairs Secretary Arvind Mayaram include Singapore based healthcare firm Fresenius Kabi Oncology to bring in FDI worth Rs 349 crore and Calyx Chemicals & Pharmaceuticals to bring in foreign investment of Rs 200 crore.

India is one of the world's biggest markets for generic drugs and allows 100 percent FDI through automatic route in pharma for new projects and as for existing firms it must be approved by the FIPB. Last year, the government had decided that all foreign investments in existing domestic pharma firms should be allowed only after clearance by the FIPB, keeping in view the availability of affordable essential drugs in the wake of multinationals acquiring local companies.

Further, the government was of the view that pharma is a growing industry and there is a need to protect the domestic players from multinationals particularly generics so that Indian pharmaceutical industry continue to grow. There are too many pharma proposals pending with the FIPB as several global pharma companies are looking to buy stake in Indian firms. Meanwhile, the government is likely to soon revise the FDI policy with regard to existing pharma companies.

India VIX, a gauge for markets short term expectation of marginally lost 0.71 % at 18.12 from its previous close of 18.25 on Monday. (Provisional)

The CNX Nifty lost 70.75 points or 1.21% to settle at 5,760.90. The index touched high and low of 5,861.30 and 5,747.60 respectively. 9 stocks advanced against 40 declining, while one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were IDFC up by 2.53%, Jindal Steel up by 1.95%, HCL Tech up by 1.58%, Sun Pharmaceuticals up by 1.36% and L&T up by 1.05%.

On the other hand, BPCL down by 8.90%, REL Infra down by 7.09%, DLF down by 7.09%, Ranbaxy down by 6.44% and ONGC down by 5.91%.

The European markets were trading in green; France’s CAC 40 up by 0.15%, Germany’s DAX up by 0.10% and the United Kingdom’s FTSE 100 up by 0.19%.

All the Asian markets barring KLSE Composite, which was down by around a quarter percent, concluded Tuesday’s trade in green. Japanese and mainland Chinese stocks rebounded from a string of losses, with a weakened yen lifting exporters in Tokyo. Japan’s Nikkei concluded the trade in green, snapping a four-day losing streak that had pulled the benchmark to its lowest level in more than a month on Monday. Japan’s industrial production took an unexpectedly sharp drop in June, falling a seasonally adjusted 3.3% from May, though manufacturers offered an upbeat outlook for the current month, the Ministry of Economy, Trade and Industry reported. The decrease in output, swinging from a revised 1.9% gain in May, trailed expectations for a 1.7% drop. However, a survey of manufacturers raised their forecast for July’s industrial production to a rapid gain of 6.5%, up from 3.3% projected in last month’s survey. Besides, the consumer spending made a surprise downturn in June, though the unemployment rate eased in the same month. Spending by households of two or more people fell 0.4% on a price-adjusted basis compared to a year earlier, confounding expectations for a 1.2% gain.

Chinese shares closed higher after the central bank injected liquidity into the money market for the first time since February in order to quell credit crunch worries. The People’s Bank of China (PBOC), or the central bank, injected liquidity into money markets via open market operations to rid worries of another possible credit crunch at the end of July, as a reported credit crunch in late June pushed up interbank rates and affected the stock market. Indonesian inflation is probably accelerating to the fastest pace in more than four years this month as higher subsidized fuel prices push up the costs of food and other goods. OCBC Bank forecasts the consumer price index in Indonesia to rise 8.4 percent in July from a 5.9 percent gain in June. The Central Statistics Agency (BPS) will report July inflation data on Thursday.

According to the latest report of the United Nations Development Program (UNDP), the 7.8 percent growth in Philippines’ first quarter gross domestic product (GDP), the fastest in Asia, did not result in a more equitable development in the Philippines.