Post Session: Quick Review

Despite positive global set-up, Indian equity markets failed to get a positive close and snapped the session on lackluster note. It turned out to be session of high volatility after witnessing early set-back.  Benchmarks after getting a gap-up start dipped lower, but soon recovered from the day’s lows. However, markets failed to sustain the positive momentum in the absence of any positive domestic triggers and by the end of the trade appeared exhausted. Benchmark indices, Sensex and Nifty witnessing a cut of around a quarter percent, ended sub psychological 19350 and 5750 levels respectively.

On the global front, Asian markets mostly rose Thursday as investors welcomed the US Federal Reserve's decision to keep its stimulus scheme in place; in view the economy was growing modestly, soothing fears over the programme's future. Figures showing the world's number one economy grew more than forecast in the second quarter also provided support, while a better than expected official reading on Chinese manufacturing helped Hong Kong and Shanghai. Borrowing positive cues from Asian counterparts, European markets too were trading upbeat.

Closer home, in line with Asian pacific shares, Indian equity markets although made a positive start, but the optimism soon faded on the back of subdued macro-economic data, which casted worries over the health of the economy. On the macro front, while core sector data slowed to 4 month low of 0.1% in June, slowdown in factory activity deepened in July as order books shrank by the most in over four years, taking the HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, lower to 50.1 in July from 50.3 in June. Further, comments of India’s consumer inflation still remaining high, by Reserve Bank of India Governor Duvvuri Subbarao, also dented sentiment. India's annual consumer price inflation picked up in June to 9.87%, after slowing for three straight months.

On the BSE sectoral front, banking stocks were the only gainers, while those from Realty, Public Sector Undertaking and Oil & Gas counters were the major laggards. Meanwhile, disappointing July sales numbers also dragged the Auto pivotal lower. While, Maruti Suzuki stocks gained around a percent on reporting better than expected July sales figures, shares of TVS Motors, Mahindra & Mahindra, Tata Motors bore the brunt of reporting subdued July figures.  The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 786: 1429, while 140 scrips remained unchanged. (Provisional)

The BSE Sensex lost 38.64 points or 0.20% to settle at 19307.06.The index touched a high and a low of 19569.20 and 19170.46 respectively. Among the 30-share Sensex pack, 13 stocks gained, while 17 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.71% and 1.30% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 1.29% was the only gainers, while Realty down by 4.09%, PSU down by 2.75%, Oil & Gas down by 2.71%, Consumer Durables down by 1.97% and Metal down by 1.96% were the top losers. (Provisional)

The top gainers on the Sensex were HDFC Bank up by 3.92%, Hindustan Unilever up by 2.94%, HDFC up by 1.98%, Gail India up by 1.24% and NTPC up by 1.00%, while, BHEL down by 4.55%, Coal India down by 4.42%, Mahindra & Mahindra down by 4.07%, ONGC down by 3.33% and RIL down by 2.74% were the top losers in the index. (Provisional)

Meanwhile, retail inflation for industrial workers increased in June due to rise in prices of food items, cigarette, electricity charges, doctor's fee, medicines and petrol. The year-on-year inflation measured by monthly Consumer Price Index-Industrial Workers (CPI-IW) stood at 11.06 per cent for June, 2013 as compared to 10.68 per cent for the previous month and 10.05 per cent during the corresponding month of the previous year. For the period of May and June, the retail inflation for industrial workers increased by 1.32 per cent as compared to 0.97 per cent in the same period of previous year.

The largest upward pressure to the change in current index came from food group contributing 2.98 percentage points to the total change. Food inflation in June stood at 14.86 per cent against 13.24 per cent of the previous month and 10.45 per cent during the corresponding month of the previous year. However, the prices of wheat, groundnut oil and mustard oil decline in the month under review.

On city wise, Pune, Bhilai and Guntur centres recorded the highest increase of 8 points each in index followed by Jalpaiguri, Asansol, Mumbai, Bokaro, Siliguri, Kanpur (7 points each) and Warangal and Vijaywada (6 points each). On the contrary, a decline of 1 point each was recorded in Amritsar and Coimbatore centres. The indices of 39 centres are above All-India Index and other 38 centres’ indices are below the national average.

India VIX, a gauge for markets short term expectation of volatility gained 5.54 % at 19.81 from its previous close of 18.77 on Wednesday. (Provisional)

The CNX Nifty lost 16.85 points or 0.29% to settle at 5,725.15. The index touched high and low of 5,808.50 and 5,676.85 respectively. 19 stocks advanced against 31 declining on the index. (Provisional)

The top gainers on the Nifty were Axis Bank up by 5.62%, HDFC Bank up by 3.85%, Hindustan Unilever up by 3.19%, Kotak Mahindra Bank up by 2.44% and Power Grid up by 2.23%.

On the other hand, JP Associate down by 9.82%, Bank of Baroda down by 8.61%, DLF down by 8.51%, Ranbaxy down by 8.29% and BPCL down by 6.19%.

The European markets were trading in green; France’s CAC 40 up by 0.43%, Germany’s DAX up by 1.21% and the United Kingdom’s FTSE 100 up by 0.39%.

All the Asian markets barring Taiwan Weighted, concluded Thursday’s trade in green. Chinese shares rallied after an official gauge signaled an improvement in the manufacturing sector, while Japanese Nikkei stocks were aided by a string of strong earnings reports, including from two of the nation’s largest banks. For a third month in a row, the Chinese government’s data on the country’s manufacturers differed with a privately-compiled survey on whether activity was growing or contracting. China’s official Purchasing Managers’ Index (PMI) registered a surprise gain for July, rising to 50.3 from 50.1 the previous month. Any reading above 50 indicates activity is expanding, and the result beat expectations for a drop to 49.8. However, a separate China manufacturing PMI published by HSBC and Markit stated that activity was contracting, with the index sinking to an 11-month low of 47.7, down from June’s final reading of 48.2. The data marked the third straight month the HSBC gauge registered contraction, and also the third month the two PMIs differed on whether factory activity was rising.

Indonesia’s Jakarta Composite too ended in green. Manufacturing output in Indonesia stagnated in July as input costs soared and export orders fell, HSBC Markit’s purchasing managers’ index survey showed. Overall manufacturing business conditions improved, but just a little, the survey concluded. Its July index for Indonesian manufacturing was 50.7, compared with the previous reading of 51.0. The survey added that manufacturing output stagnated after four months of expansion. Additionally, consumer prices rose 3.29% in July following the government’s increase in the price of subsidized fuel, the highest inflation level since 2008, which also followed a subsidy cut. Separately, the Central Bureau of Statistics (BPS) stated that Indonesia’s trade balance for June showed a $846.6 million-deficit, bringing the cumulative deficit figure for the first half of the year to $3.31 billion.

Taiwan’s gross domestic product (GDP) posted a 2.27% annual growth in the second quarter of this year, beating an earlier estimate of a 1.98% increase. The better-than-expected Q2 GDP growth reflected higher-than-anticipated exports and a mild recovery in private consumption, the Directorate General of Budget. Besides, Bank of America Merrill Lynch has maintained its forecast for Taiwan’s GDP growth in 2013 at 2.7%, despite better-than-expected economic growth in the second quarter.