Post Session: Quick Review

Indian equity markets made a good start of the new week where bulls remained in action right from the beginning leading to a positive close. Encouraging cues on domestic front combined with optimistic regional counterparts’ boosted confidence of the market-participants ahead of the release of Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data, later in the day. The session appeared to be stable right from the start, although bit of profit-booking was witnessed in early deals, benchmark equity indices soon re-gaining momentum went on capturing ground. By the end of trade, Sensex and Nifty, adding over half a percent of gains, reclaimed the crucial 18,900 and 5,600 bastion respectively. The session was even better for broader indices, which outperforming larger peers, went home with gains of over a percent.

Investors took a heart from positive July exports data and Rupee’s strength in early deals over RBI’s latest measures. While, exports in India shot up by 11.64% at $25.83 billion in July after two straight months of contraction, the Indian currency soared to a week high level after another salvo from the Reserve Bank of India (RBI) to support it by tightening the money supply.

Additionally, investors also drew strength from positive regional counterparts. On the global front, Asian stock markets ended mostly higher on Monday with Shanghai rallying to a two-month high as economic data from China continued to point to a more stable outlook for the world's second largest economy. China's monthly loan report, which came out Friday afternoon after the stock market close, showed banks extended 699.9 billion yuan ($114 billion) in new loans for July. This came after trade and industrial output data that suggested Asia's largest economy was stabilizing.

However, profit-booking was also witnessed in the final hours of trade at local equity markets on account of decline of European shares which slipped in red after a positive open, with the auto sector and financial services stocks posting the biggest declines.

Closer home, Finance Minister P Chidambaram’s re-assuring statements of India’s Current Account Deficit being contained at 3.7% of GDP, also lent support to the bourses. Further, the announcement of more measures being in store to entice NRI and capital flows in the coming days also cushioned the sentiment. However, a bit of disappointment crept into equity markets with the plunge of SBI stocks by 3%. The bank posted 13.61% drop in net profit to 3241.08 crore in the fiscal first quarter that ended in June compared with Rs 3751.56 crore a year ago, on worsening asset quality, higher operating expenses and muted growth in interest income. However, this was counterbalanced by over a percent gains of Tech Mahindra stocks, which reported over three and a half fold jump in its net profit after tax at Rs 598.87 crore for first quarter ended June 30, 2013 as compared to Rs 167.50 crore for the same quarter in the previous year.

Gains at Indian equity markets were led by stocks belonging from Metal, Health Care and Fast Moving Consumer Goods stocks, while those from Banking and Information Technology were the dark spots.  The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1437: 829, while 116 scrips remained unchanged. (Provisional)

The BSE Sensex gained 157.64 points or 0.84% to settle at 18946.98.The index touched a high and a low of 19066.97 and 18796.01 respectively.  The BSE Mid cap and Small cap indices ended higher by 1.54% and 1.56% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 4.52%, FMCG up by 2.30%, Health Care up by 2.00%, Capital Goods up by 1.95% and PSU up by 1.33% were the top gainers, while Bankex down by 1.07% and Oil & Gas down by 0.51% were the only losers in the space. (Provisional)Out of the 30 stocks on the Sensex, 20 settled higher, while 10 stocks settled lower.

The top gainers on the Sensex were Jindal Steel up by 9.43%, Tata Steel up by 8.29%, Sun Pharma up by 6.60%, HDFC up by 3.23% and Hero MotoCorp up by 2.95%. On the flip side,  SBI down by 3.41%, Tata Power down by 3.28%, RIL was down by 2.33%, HDFC Bank was down by 1.98% and TCS was down by 1.22% were the top losers on the Sensex. (Provisional)

Meanwhile, struggle of Indian auto industry continued for ninth straight month due to rising ownership costs and sluggish economic growth. As per the Society of Indian Automobile Manufactures (SIAM), the domestic passenger car sales declined by 7.4% to 131,163 units as compared to 1,41,646 units in the same month of 2012.

Meanwhile, motorcycle sales also shed by 1.52% to 8,09,312 units in the last month as against 8,21,821 units in the corresponding month previous year, while total two-wheeler sales in July 2013 decreased marginally by 0.06% to 11,31,992 units from 11,32,696 units in the same period of previous year as rising fuel costs and high interest rates continued to spill water on consumer demand.

Total sales of commercial vehicles, including trucks and buses, too tumbled 14.93% to 55,301 units from 65,008 units in the year-ago period. While, total sales of vehicles across categories registered a fall of 2.08% to 14,15,102 units in July 2013 as against 14,45,112 units in the same month of 2012.

Currently, vehicle demand in the country is passing through a very bearish phase with demand declining continuously month-on-month, growth in commercial vehicle and passenger car segments have slipped faster than expected in last few months. Indian auto component manufacturer too are facing the heat of a global auto slowdown.

India VIX, a gauge for markets short term expectation of marginally gained 0.45% at 21.28 from its previous close of 21.19 on Thursday. (Provisional)

The CNX Nifty gained 35.30 points or 0.63% to settle at 5,600.95. The index touched high and low of 5,644.10 and 5,557.10 respectively. Out of the 50 stocks on the Nifty, 33 ended in the green, while 17 ended in the red.

The major gainers were Jindal Steel up 9.09%, Tata Steel up by 7.68%, Sun Pharmaceuticals up by 7.13%, NMDC up by 6.58% and Hero MotoCorp up by 3.56%. The key losers were SBI down by 4.02%, Tata Power down by 3.28%, Reliance Industries down by 2.73%, IndusInd Bank down by 2.01% and PNB down by 1.79%.(Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.40%, Germany’s DAX down by 0.79% and the United Kingdom’s FTSE 100 down by 0.24%.

All the Asian markets barring Jakarta Composite and Nikkei 225 concluded Monday’s trade in green. China shares soared to their highest closing levels since mid-June, as solid Chinese economic data released late Friday buoyed cyclical sectors from financials and property to coal and cement and amid hopes that Beijing would step in to support the economy. Seoul shares edged higher, reversing early losses as steel producers lifted the broader market on a day of low volume. The Nikkei share average dropped to a 7-week low after Japan’s economy grew more slowly than expected in the last quarter. Japan’s economy grew an annualized 2.6% in the April-June period, the Cabinet Officer reported, cooling sharply from a rapid 4.1% gain in the first calendar quarter. On a seasonally adjusted quarterly basis, gross domestic product rose 0.6% from the first quarter's 0.9% increase.

Indonesia’s retail sales in June rose 14.8% from a year earlier, ahead of the Ramadan holiday period when consumption normally increases. June’s growth pace topped a revised 12% in the previous month, driven by information and communication equipment, which includes mobile phones and pre-paid phone cards, and by clothing and fuel. The retailers expected retail sales to ease slightly in the next three months as consumption returns to normal after the Muslim festivities. Separately, the street expects Bank Indonesia, the country’s central bank, to maintain its benchmark interest rate at 6.50% when the board meets on Thursday to discuss ways to boost the slowing economy amid acceleration in inflation. The benchmark rate, known as the BI rate, has been raised twice this year - once each in June and July - by a total of 75 basis points, as the central bank seeks to tame a pick-up in inflation. Rising inflation in Indonesia makes it less valuable to hold rupiah-denominated assets.

China’s factory output grew in July at its fastest pace since the start of the year, adding to a run of data suggesting the world’s second-largest economy may be stabilizing after more than two years of slumping growth. Factory output rose 9.7% in July from a year earlier, the fastest growth since output grew 9.9% over January and February. A steadying economy would be a relief to China’s leaders, who worry that further slow down could derail their efforts to rebalance the economy away from its credit- and investment-driven growth model to one in favor of consumption. Singapore lowered its forecast for exports this year as a slowing expansion in China crimps demand for the nation’s goods, even as services helped the economy grow more than initially estimated last quarter. Non-oil domestic exports may be unchanged or rise 1% in 2013, compared with a previous forecast of 2% to 4%, the trade promotion agency stated. Gross domestic product rose an annualized 15.5% in the three months through June from the previous quarter, when it grew a revised 1.7%, the Trade Ministry stated.