Post session - Quick review

Turmoil of Indian markets is not looking to end anytime soon as the domestic equity indices once again gave up to selling pressure in the last leg of the trade and closed with loss of another one and half percent. While, the BSE benchmark index -Sensex- slipped below the psychological 17000 mark, NSE benchmark index -Nifty- lost its crucial 5100 mark. Earlier in the day, though the indices made a flat start on sluggish global cues but soon entered the green, however the trade remained range-bound for most part of the day and it was weak start of the European markets that led the markets to a sharp slide.  European markets extended their decline for a second day, as Mario Monti, Italy’s nominated premier, struggled to get political parties to help form his new Cabinet. However, a report showed German economic growth rebounded in the third quarter on stronger consumer and company spending.

Back home, the mood remained somber on the street as cautious investors avoided taking any positions, even in the oversold stocks on concern of stagnating local and weakening global economy. There was disappointment among the marketmen after the much talked about press conference of Kingfisher Airlines, as nothing concrete was disclosed about helping the beleaguered airlines company by the group. Chairman and promoter, Vijay Mallya said that the government should consider allowing foreign direct investment (FDI) in aviation and reiterated that the company cannot afford to fly heavily loss-making routes. However, the result announcements for the day remained mixed but stocks that even performed well in the September quarter were dragged down with the bad performers, BHEL lost around 3 percent despite reporting 24 percent rise in its net profit and JP Associates after reporting over 11 percent rise in its Q3 net profit closed with loss of over 6 percent. All the sectoral indices closed in red, while the high beta realty capital goods, metal and banks suffered the most, defensive sectors healthcare and FMCG too lost ground. Broader indices too were tormented and lost over 2 percent by the end.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 639:2224 while 97 scrips remained unchanged.

The BSE Sensex lost 270.30 points or 1.58% and settled at 16,848.44. The index touched a high and a low of 17,172.09 and 16,837.56 respectively. 3 stocks advanced against 27 declining ones on the index (Provisional)

The BSE Mid-cap index lost 2.64% while Small-cap index was down 2.83%. (Provisional)

On the BSE Sectoral front, there were no gainers while Realty down 5.46%, Capital Goods down 3.33%, Power down 2.38%, Bankex down 2.20% and Metal down 2.16% were the top losers.

The top gainers on the Sensex were Cipla up 6.33%, Tata Motors up 1.88% and HDFC Bank up 0.28%.

On the flip side, DLF down 6.99%, JP Associates down 6.51%, M&M down 3.86%, ICICI Bank down 3.81% and L&T down 3.70% were the top losers on the index. (Provisional)

Meanwhile, undeterred by last week’s Moody's decision to lower the Indian banking sector’s outlook to ‘negative' from ‘stable’ after the global rating agency felt that slow global economic growth could impact the sector's profitability, the finance ministry on Monday has asked Moody's to upgrade the country's rating, at least two notches higher than the present grade, as there was a marked improvement in its basic economic parameters in the past few years.

A delegation of finance ministry officials led by Department of Economic Affairs Secretary, R Gopalan after a meeting with Moody's representatives  said that ‘Moody's should take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India's sovereign rating,’ The official said that high savings and investment ratio, favourable demographics, infrastructure development and a stable democratic polity were good for India's long-term growth prospects. The meeting was also attended by the Chief Economic Adviser to the Ministry, Dr Kaushik Basu, and officers from the Ministries of Finance, Power, Fertiliser and Petroleum and Natural Gas.

R Gopalan asked Moody's to revise India's rating to Baa1, two notches above its current rating. The rating agency had last upgraded India's rating to ‘Baa3’ (with stable outlook) in 2004. Baa3 means medium grade with moderate credit risk. Besides, Moody's had assigned a ‘Ba1' with a positive outlook rating to India's local debt.

‘India has low external debt-to-GDP ratio, high foreign exchange reserves, deep domestic capital markets and diversified domestic holdings of sovereign debt. It outperforms its ‘Baa' peers on these indicators,’ he added.

In the meeting, the finance ministry officials told the rating agency about the policy measures taken by the government, such as fuel price hike, clearing 51 per cent FDI in multi-brand retail by the Committee of Secretaries and raising of FII investment limit in infra bonds to $25 billion.

India VIX, a gauge for market’s short term expectation of volatility gained 2.68% at 25.97 from its previous close of 25.29 on Monday. (Provisional)

The S&P CNX Nifty lost 94.85 points or 1.84% to settle at 5,053.50. The index touched high and low of 5,158.75 and 5,052.85 respectively. 3 stocks advanced against 47 declining ones on the index. (Provisional)

The top gainers on the Nifty were Cipla up 6.30%, Tata Motors up 2.14% and Grasim up 0.30%.

On the other hand, DLF down 7.43%, JP Associates down 6.89%, Reliance Communications down 5.26%, Siemens down 4.84% and Axis Bank down 4.24% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 1.50%, Germany's DAX down 1.78% and FTSE 100 down 0.86%.

After witnessing gimps of glory in previous two sessions’ Asian markets have witnessed a steep cut on Tuesday’s trade amid concerns over whether newly formed governments in Italy and Greece can contain their debt crisis as Spanish and Italian government-bond yields climbed. Markets remained buoyed in past two days as Greece and Italy moved to form new governments and embarked on other steps to get their debt troubles under control. But a worrisome sign emerged late Monday when the Italian government sold five-year bonds at 6.29 percent interest, the highest interest rate since 1997. Italy paid a much lower rate of 5.32 percent at a similar auction only last month.

All the Asian equity indices barring Shanghai composite snapped the day’s trade in the red. Seoul Composite remained the biggest loser, down by about a percent followed by Hang Seng and Nikkei down by 0.82% and 0.72% respectively. However, Chinese benchmark ended flat on Tuesday as investors continued to wait for clear signs of a shift in Beijing’s monetary policy.