Post Session: Quick Review

Nothing could change the subdued mood of Indian equity markets, which for eighth consecutive session ended lower on Friday, as investors remained uncertain as to when the central bank will rollback its short-term rate hike aimed to curb rupee’s fall. In the lackluster session of the trade, benchmarks steadily went on losing ground, although some recovery came in the late hours of trade, but that remained insufficient to lift the markets in green. Much of the selling pressure was witnessed in the afternoon deals despite the positive start of European markets.

Just like the last couple of sessions, benchmarks on Friday turned negative, overlooking most of the positive global cues. Global risk appetite improved after US factory output surged to its highest level since June 2011, easing concerns a slowdown in emerging economies may take a toll on US growth. However, by the close of trade, Sensex and Nifty, knocked off over 3 /4 of a percent and ended below the crucial 19,200 and 5,700 levels respectively. For the week, Nifty marked biggest weekly loss of over 3% since week ended March 22, similar was the case with Sensex. The broader indices clobbered out of shape with massive cut of over 6%.

On the global front, while Asian shares advanced on Friday after brisk US factory activity data and a commitment to easy monetary policy by European central banks and the Federal Reserve buoyed Wall Street to record highs overnight, European markets too continued to trade upbeat. European shares extended gains to set a new two-month high on Friday, with investors betting that US jobs numbers will surprise on the positive side and signal a further pickup in economic activity in the country.

Closer home, lack of investors’ confidence, largely dented by Rupee’s volatility and current state of economy weighed on the sentiment right from the start of the trade. Although, benchmarks managed to break-out in green in late morning deals, the recovery turned out to be momentary as profit-booking soon gripped the markets. In the down session of trade, once against stocks from Information Technology counter along with Consumer Durables and Oil & Gas showed upmove. However, major profit-booking was witnessed by stocks of Realty, Power and Metal counters.

Disappointment also crept into the market from slew of earnings reported today. While, Siemens slumped to 52-weeek low after reporting net loss in Q3, Reliance Communication stocks tanked over 6% on reporting 33% drop in its Q1FY14 consolidated net profit at Rs 108 crore. Additionally, Bank of Maharashtra stocks too slid by 3% despite reporting 89.61% rise in its Q1FY14 net profit at Rs 266.33 crore. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 780: 1485, while 142 scrips remained unchanged. (Provisional)

The BSE Sensex lost 153.17 points or 0.79% to settle at 19164.02.The index touched a high and a low of 19451.70 and 19078.72 respectively. Among the 30-share Sensex pack, 6 stocks gained, while 24 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.40% and 1.32% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 5.38%, IT up by 0.96%, Teck up by 0.55% and Oil & Gas up by 0.08% were the top gainers, while Realty down by 4.01%, Power down by 3.77%, Metal down by 3.65%, PSU down by 2.64% and Capital Goods down by 1.55% were the top losers. (Provisional)

The top gainers on the Sensex were TCS up by 1.66%, Infosys up by 1.04%, RIL up by 0.84%, Wipro up by 0.58% and Tata Motors up by 0.45%, while, Jindal Steel down by 7.29%, Coal India down by 5.84%, Tata Power down by 4.73%, Sterlite Industries down by 4.32% and Tata Steel down by 3.74% were the top losers in the index. (Provisional)

Meanwhile, Indian engineering exports fell by 7 percent in the April-June quarter in the current fiscal mainly due to the slowdown in the US and European Union markets. The chairman of Engineering Export Promotion Council (EEPC) Aman Chadha said that owing to the prevailing slowdown in the US and European countries, it has become imperative to search new markets for engineering exports. The US and Europe together account for around 60 per cent of the country’s total engineering exports. 

Disappointed over the Reserve Bank of India's decision of not undertaking rate cuts in its monetary policy, EEPC’s chairman said that we need to make Indian exports competitive in tough global markets where we face competition from aggressive exports from China and other emerging economies. Engineering goods exports which include exports of goods, transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners, constitute around one-fourth of the country's total merchandise shipments.

While, the government and the exporters are making renewed efforts to diversify and explore new markets, also trying to increase share of exports in Latin America's Pacific Alliance which holds good prospects for Indian engineering products. Recently, domestic exporters have found new markets in Africa and Latin America, but remained cautious due to reasons such as fear of payment default. Meanwhile, in order to boost the country’s export, the government, in the annual foreign trade policy, had announced a slew of measures include sops for Special Economic Zones (SEZs) and extension of the popular the Export Promotion Capital Goods (EPCG) scheme to all sectors to boost shipments.   

India VIX, a gauge for markets short term expectation of volatility gained 5.54 % at 20.89 from its previous close of 19.81 on Thursday. (Provisional)

The CNX Nifty lost 49.95 points or 0.87% to settle at 5,677.90. The index touched high and low of 5,761.85 and 5,649.00 respectively. 15 stocks advanced against 35 declining on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy up by 4.06%, Cairn up by 2.60%, ACC up by 2.29%, Ambuja Cements up by 2.21% and Lupin up by 2.08%.

On the other hand, Power Grid down by 11.52%, JP Associate down by 9.09%, Jindal Steel down by 8.08%, DLF down by 6.86% and Bank of Baroda down by 5.84%.

The European markets were trading in green; France’s CAC 40 up by 0.19% and Germany’s DAX up by 0.13%, while the United Kingdom’s FTSE 100 down by 0.08%.

All most all Asian markets concluded Friday’s trade in green; Shanghai Composite Index gained for a fourth straight day, as property developers advanced on signs of easing control on their refinancing. The home prices in China climbed for another month in July, extending strength for the 14th straight month. The average price of new houses in 100 Chinese cities rose 0.87% from June to 10,347 yuan ($1,688) per square meter. That compared with June’s growth of 0.77%. The country earlier had also reported a surprising rise in manufacturing and the government vowed to boost domestic demand to support economic growth.  The country’s consumer sentiment fell sharply last month to the lowest level in 18 months, as confidence in household finances and business conditions dropped. The overall monthly measure of China’s consumer confidence dropped to 87.8 in July from 97.3 in June, Market News International, a unit of Deutsche Boerse Group, stated in a report.

Hong Kong shares rose following upbeat US data and after official figures showed a rare increase in Chinese manufacturing activity in July. Indonesia’s economy grew at its slowest rate for almost three years in the second quarter, adding to concerns that one of Asia’s most vibrant economies is losing some of its steam. The statistics bureau announced that GDP growth in the April-June period was 5.81%, it’s lowest since the third quarter of 2010. The latest quarter was the fourth straight one in which the growth pace slipped. The government is targeting 6.3% this year, but the central bank last month trimmed its own forecast to 5.8-6.2% from 6.2-6.6%.

South Korean exports grew far less than expected last month and a measure of manufacturing activity dropped to the lowest in nearly a year, suggesting global demand has yet to turn to underwrite a firm recovery in Asia’s fourth-largest economy. Overseas shipments by the world’s seventh-largest exporter rose by 2.6% in July in annual terms, better than a 1% fall in June but far below the median forecast of 5% growth from a survey.