Post Session: Quick Review

Trading in sync with most of emerging market’s sell-off, Indian equity markets too ended in shambles on Tuesday as market-participants dumped stock on every possible occasion, which led to benchmark equity indices ending in gut with a colossal cut of over three percent. No respite came to the ailing equity markets, depicting weak trend in the backdrop of pessimistic global set-up. Lok Sabha's approval of a $20 billion bill for providing cheap grain to the poor, which renewed doubts about the government's resolve to control spending ahead of elections due next year, dragged Rupee to life time low level of 66/$ mark, denting sentiment. This coupled with concerns of a downgrade in country’s sovereign rating by global rating agency, Fitch, also weighed on investors’ sentiment. on the macro-front, amid rising doubts over the country’s widening deficits due to a huge depreciation in the rupee's value, global ratings agency Fitch warned India of a downgrade if the country is unable to meet its fiscal deficit target adding that India's fiscal numbers look weak and the space to contain expenditure is very limited in the second half of the financial year. Back on Dalal Street, ending near day’s low, Sensex and Nifty, registering massive three digit losses, ended near September 2012’s low , i.e., below the crucial 18,000 and 5,300 levels respectively. Meanwhile, broader indices though not witnessed as big losses as their larger peers, still suffered cut of over one and half a percent.

On the global front, a broad selloff hit emerging markets, sparked by worries over possible US intervention in Syria. The slump came after US Secretary of State John Kerry said late Monday that the recent use of chemical weapons against Syrian civilians is a 'moral obscenity,' raising expectations that the US could take military action against the Middle East nation. Mirroring Asian counterparts’ trend, European stocks fell in early trade on Tuesday as unease about the threat of a military strike against Syria prompted some investors to cash in on recent strong gains.

Closer home, sentiment failed to shore-up even after Finance Minister P Chidambaram said that Rupee was significantly undervalued and soon will find its appropriate level. With no place to hide, stocks only from Information Technology counters emerged as knight in the shining armor, while rest all 12 sectoral indices ended in red on BSE. Major losers on BSE were stocks belonging to Banking, Capital Goods and Power counters that were beaten badly out of shape. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 724: 1530, while 141 scrips remained unchanged. (Provisional)

The BSE Sensex lost 590.05 points or 3.18% to settle at 17968.08.The index touched a high and a low of 18460.72 and 17921.82 respectively. Among the 30-share Sensex pack, 3 stocks gained, while 27 stocks declined. (Provisional)The BSE Mid cap and Small cap indices ended lower by 2.02% and 1.58% respectively. (Provisional)

On the BSE Sectoral front, IT up by 0.17% was the only gainer, while Bankex down by 5.39%, Capital Goods down by 5.00%, Power down by 4.53%, Realty down by 3.90% and PSU down by 3.90% were the top losers. (Provisional)

The top gainers on the Sensex were Infosys up by 1.04%, Dr Reddys Lab up by 0.42% and  Gail India up by 0.03%, while, BHEL down by 10.22%, HDFC down by 7.61%,  HDFC Bank down by 7.53%, L&T down by 5.60% and  NTPC down by 5.56% were the top losers in the index. (Provisional)

Meanwhile, the share of exports in the country's gross domestic product (GDP) has declined marginally to 17.3 percent in 2012-13 from 17.6 percent in 2011-12. Commerce and Industry Minister Anand Sharma said that marginal decline in exports’ share is attributable to the ongoing global economic crisis, which led to contraction in international demand.

Commerce Minister said that economic slowdown in developed economies and sovereign debt crisis in Europe have adversely impacted demand for our various sectors’ exports including exports of engineering goods, gems and jewellery, textiles, electronic goods and iron ore among others. By adding further, Anand Sharma added that except 2012-13, the share of exports in the GDP of the country has shown a consistent rise and increased to 17.6 percent in 2011-12 from 15.7 percent recorded in 2010-11.

In the previous fiscal, Indian exports declined by 1.76% to $300.6 billion which were the first ever decline since 2009-10. Presently, there is a need to boost exports in order to contain country’s high current account deficit (CAD), which widened to a record high of 4.8 percent of GDP in the previous fiscal. Further, high CAD also remained main factor behind the fall in domestic currency value, which recently depreciated to a record high of over 65 per dollar. Meanwhile, the government is doing all efforts to boost country’s export and has recently announced a slew of measures including sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

India VIX, a gauge for markets short term expectation of volatility gained 11.52 % at 29.42 from its previous close of 26.38 on Monday. (Provisional)

The CNX Nifty lost 189.05points or 3.45% to settle at 5,,287.45. The index touched high and low of 5,427.40 and 5,274.25 respectively. 3 stocks advanced against 47 declining on the index. (Provisional)

The top gainers on the Nifty were Infosys up by 1.03%, Dr. Reddy's Laboratories up by 0.98% and HCL Technologies up by 0.05%. On the other hand, IDFC down by 16.15%, BHEL down by 10.65%, IndusInd Bank down by 8.69%, JP Associate down by 8.68% and HDFC Bank down by 7.44%.

The European markets were trading in red; France’s CAC 40 down by 1.28%, Germany’s DAX down by 1.44% and the United Kingdom’s FTSE 100 down by 0.64%.

Most of the Asian markets, barring Shanghai Composite concluded Tuesday’s trade in red after US hardened its stance against Syria, with south-east Asian markets hit particularly hard, while mainland Chinese shares gained after data showing an increase in industrial profits. Japan’s Nikkei share average fell for a second straight day, taking cues from other weak Asian stock markets, with investors generally reluctant to trade actively ahead of potentially market-moving events in the coming weeks. Investors are keeping eyes on developments over Syria and waiting to get clarity on when the US Federal Reserve will scale back its stimulus measures.

China will be able to meet the economic growth target of 7.5% this year as the economy is stabilizing, helped by supportive policies at home and rising demand abroad, an official with the National Bureau of Statistics stated. Chinese industrial firms’ total profit from January to July was 11.1% higher than the same period a year earlier. The rate of annualized gains was unchanged from the January-June reading but marked a slowing from the January-May year-on-year rise of 12.3%. For July alone, industrial profit rose 11.6%, accelerating from a 6.3% increase in June. Separately, new home purchases ended above the 200,000-square-meter threshold in Shanghai for the second consecutive week, with mid- to low-end properties selling strongly. Sales of new homes, excluding government-subsidized affordable housing, totaled 202,000 square meters last week, a slight dip of 0.5% from the previous seven-day period.

In Indonesia, following criticism that its economic stimulus package lacked information, the national government revealed financial details on its plan to curb oil imports, saying it hopes it will help wipe $3 billion off the current account deficit. The policy aims reduce fuel imports, which stood at $5.8 billion in the first half of the year, according to the Central Statistics Agency (BPS). Hatta Rajasa, the coordinating minister for the economy, stated that the current account deficit which reached $9.8 billion in the second quarter would likely fall in coming months.