Post Session: Quick Review

Indian markets showed great resilience in Tuesday’s trade, as after a gap-down start the major indices recovered a lot, and entered the green around the mid-day trade; however profit booking at higher levels dragged the markets lower and proved all recovery attempt futile. Nonetheless, the major benchmarks sensed some respite after a slew of butchery. The market mood looked feeble as the rupee, plunging lower breached its historic low level of 64 a dollar, however some speculated RBI intervention held the rupee within the limits, restricting its further fall.

The feeble global cues continued to weigh on the sentiments of the local investors, as the US markets ended lower overnight, while the Asian markets suffered deep cut in the trade for the day. Later the European markets too made a soft start amid speculation that the Federal Reserve will curb its bond-buying program as soon as next month. The persisting weakness in the global markets watered down all the efforts of recovery of the local bourses.

Back home, the markets mayhem may have continued but the trade witnessed a classical bounce back intraday, as the falling rupee was supported by banks dollar selling that boosted the morale of the traders on Dalal Street. Bond markets too remained abuzz with the rupee slipping to record low, Bond yields reached session high of 9.48 percent and also its more than five year high. Meanwhile, the Federation of Indian Export Organizations (FIEO) said that such sharp rupee depreciation is temporary phase and rupee will strengthen looking at bright prospects of exports in coming months. There was some solace as the Moody’s Investors Service reiterated its stable outlook on India’s Baa3 sovereign-credit rating, the lowest investment grade, saying the nation has adequate currency reserves for balance of payments needs in the near term. But going forward there was not much that could support the markets till last. Metal and realty enticed buyers at lower levels, while the banking and PSU too tried to give them company as value buying appeared in select banking stocks. However, the consumer durables remained the laggard since morning and could not recover despite the government banning duty-free import of high-end flat screen plasma TVs. Finally the markets after a choppy session once again ended in red with Sensex remaining below 18300 and Nifty 5400 mark.

The market breadth on the BSE remained positive; advances and declining stocks were in a ratio of 1174: 1098, while 128 scrips remained unchanged. (Provisional)

The BSE Sensex lost 74.58 points or 0.41% to settle at 18232.94.The index touched a high and a low of 18306.46 and 17970.98 respectively. Among the 30-share Sensex pack, 11 stocks gained, while 19 stocks declined. (Provisional)

The BSE Mid cap index ended lower by 0.48% and Small cap index ended higher by 0.24%. (Provisional)

On the BSE Sectoral front, Metal up by 4.24%, Realty up by 1.78%, PSU up by 0.42%, Bankex up by 0.28%  and FMCG up by 0.09% were the top gainers, while Consumer Durables down by 4.09%, Auto down by 2.65%, Health Care down by 1.82%, IT down by 1.49% and Teck down by 1.15% were the top losers. (Provisional)

The top gainers on the Sensex were Sterlite Industries up by 8.39%, Tata Steel up by 3.83%, Coal India up by 1.71%, ICICI Bank up by 1.58% and Hindalco Industries up by 1.51%, while, Tata Motors down by 5.07%, Sun Pharma down by 2.70%, Mahindra & Mahindra down by 2.69%, BHEL down by 2.66% and Hero MotoCorp down by 2.40% were the top losers in the index. (Provisional)

Meanwhile, in order to boost India’s infrastructure sector, the government has cleared 28 big-ticket investment projects worth Rs 1.1 lakh cr, which have been stuck for years for want of numerous government clearances. After intensive project-wise discussions with ministries, special project monitoring group headed by cabinet secretary Ajit Seth has managed to secure these clearances for mega investment projects.

These infrastructure projects include 18 power projects with a generation capacity of 15,636 mw, four highway projects worth Rs 4,400 crore, and Rs 1,200-crore steel plant in Odisha. Further, the coal ministry has also agreed to sign fuel supply agreements for all these projects by August 31. Three railway projects in poorly connected states such as Mizoram, Assam and Chhattisgarh, with an investment outlay of over Rs 7,100 crore, have also got green signal. Moreover, the government also cleared Delhi airport aerocity project worth Rs 12,000 crore and Petroleum distillation units, being set up by Bharat Petroleum, worth Rs 1,419 crore.

The government has identified the development of infrastructure as a most crucial one to boost the economy’s growth. Recently, it has set up the Cabinet Committee on Investments (CCI) to clear the bottlenecks holding back mega infrastructure projects. However, the committee met just once a month and didn't have the bandwidth to resolve ground-level issues holding up private sector investments.  Thereby, the government set up special cell, which is  meant to supplement CCI's efforts in cases where the problem can be involved by way of discussions between ministries also acts as the CCI's secretariat and has now been tasked with monitoring the progress of projects cleared earlier by CCI. Meanwhile, for the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

India VIX, a gauge for markets short term expectation of volatility gained 6.40 % at 27.23 from its previous close of 25.59 on Monday. (Provisional)

The CNX Nifty lost 18.90 points or 0.35% to settle at 5,395.85. The index touched high and low of 5,417.80 and 5,306.35 respectively. 21 stocks advanced against 29 declining on the index. (Provisional)

The top gainers on the Nifty were Sesa Goa up by 14.75%, JP Associate up by 4.05%, BPCL up by 4.02%, Tata Steel up by 3.73% and Cairn up by 3.44%.

On the other hand, Tata Motors down by 5.04%, ACC down by 4.38%, HCL Tech down by 4.02%, BHEL down by 2.76% and Sun Pharmaceuticals down by 2.52%.

The European markets were trading in red; France’s CAC 40 down by 1.50%, Germany’s DAX down by 1.10% and the United Kingdom’s FTSE 100 down by 0.65%.

All the Asian markets concluded Tuesday’s trade in red amid worries that a reduction in the Federal Reserve’s bond purchases would hurt demand for emerging market assets. Several regional currencies were also weighed down amid worries of foreign investors withdrawing funds from the region. The Malaysian ringgit slid to its lowest in more than three years, while the Thai baht touched a one-year low. Chinese shares edged lower in choppy trade, with gains in industrial and railway-related sectors offset by weakness in properties and securities, while Nikkei tumbled touching 7-week low on Fed uncertainty. Besides, new lending to housing developers and homebuyers both surged in Shanghai last month on an annual basis, signaling a pickup in momentum in the Chinese property market. New housing development loans in Shanghai amounted to 4.7 billion yuan ($764 million) in July, a significant rebound of 5.6 billion yuan from a year earlier when the figure was negative, the Shanghai Head Office of the People’s Bank of China stated. The city’s housing loans rose for the sixth consecutive month in July on an annual basis due to rising market sentiment and growing individual demand.

Hong Kong’s inflation accelerated in July from June, mostly due to a low comparison base caused by the government’s one-off property relief measures last year, the Census and Statistics Department stated. The composite consumer price index rose 6.9% on year in July, picking up from June’s 4.1% rise, and was above the median forecast for a 6.2% rise. The sharp year-on-year rise was primarily due to public-housing rental waivers, which were carried out in July last year, distorting the on-year comparison with a lower base. The Hong Kong government stated in its most recent forecast in August that it expects the CPI to rise 4.3% this year, up from the 4.1% increase in 2012. Malaysia’s trade surplus fell to its lowest level in April since the 1997 Asian financial crisis, raising the prospect of its first trade deficit in 16 years. Exports slumped further in May and June, although the trade balance moved higher.

Meanwhile, two leading American business groups stated that US firms operating in ASEAN countries are skeptical that regional bloc can meet a 2015 deadline to establish a single market. Despite their skepticism, the survey showed that US companies are optimistic about overall business prospects in the region. Indonesia was named the most attractive country for new business expansion, followed by Vietnam, Thailand and Myanmar. Meanwhile the Philippines showed the biggest improvement in its business environment between 2008 and 2013, the survey added.