Markets stage smart intraday recovery,ends flat

Indian equity benchmarks staged a smart recovery in second half of trade on Wednesday and ended the session flat; pairing around all of their early losses, supported by significant buying in software counters amid expectations of margin improvement after rupee breached yet another record low of 68 per US dollar. Earlier, markets made a gap-down start pressurized by feeble global cues and coupled with weakness in rupee. The rupee today breached the 68-mark against the dollar for the first time in history and quoted at all time low of 68.75 in early deals. Sentiments also remained dampened after share prices of three public sector oil marketing companies BPCL, HPCL and IOC plunged as the international crude prices surged on escalating geo-political tension. Though, there are also reports that diesel prices may be increased by at least Rs 3 a litre after the monsoon session of Parliament ends next week.

Global cues too remained unsupportive as most of the Asian equity indices shut shop in the red on concern that US will take military action against Syria. The investors’ moral across the region also got clobbered out of shape amid worries that the US may pullback on aggressive monetary stimulus that had benefited many of these emerging markets until just a few weeks ago. Sentiments also remained down-beat after Emerging market currencies were hit hard, with Indonesian rupiah and Thai baht among others at multi-year lows. Weak opening in European counters too dented the investors’ sentiments with CAC, DAX and FTSE all edging lower by around a percent.

Back home, selling was both brutal and wide as frontline indices lost their crucial 17,500 (Sensex) and 5,150 (Nifty) levels in early trade, but markets started paring losses afterwards, taking support from buying in software and metal counters and short covering in fundamentally strong stocks. Slight recovery in Indian rupee too supported the sentiments. The recovery got accelerated in last leg of trade and both the frontline gauges entered into green terrain on the buzz that Life Insurance Corporation (LIC) - India’s biggest domestic institutional investor was spotted buying shares which helped the Indian stocks to stage a strong intraday rebound. However, bout of volatility was witnessed in dying hours and markets ended flat as investors remained on sidelines ahead of Futures and Options expiry of August derivate contracts tomorrow followed by first-quarter GDP data on Friday which will determine the market trend going ahead.

The NSE’s 50-share broadly followed index Nifty declined by just 2 points to hold its psychological 5,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained around thirty points to end above the psychological 19,950 mark. For the day, markets logged highest ever turnover of over Rs 4.46 lakh crore.

Broader markets, however, clobbered out of shape and snapped the session with cut of over a percentage point. The market breadth remained in favour of decliners, as there were 855 shares on the gaining side against 1348 shares on the losing side, while 134 shares remained unchanged.

Finally, the BSE Sensex gained 28.07 points or 0.16% to settle at 17996.15, while the CNX Nifty declined by 2.45 points or 0.05% to end at 5,285.00.

The BSE Sensex touched a high and a low of 18101.84 and 17448.71, respectively. The BSE Mid cap index was down by 1.03% and Small cap index was up by 1.04%.

The top gainers on the Sensex were, Jindal Steel up by 3.69%, TCS up by 3.68%, Wipro up by 3.63%, Tata Power up by 3.29% and Hindalco Inds up by 2.92%, while, ONGC down by 5.98%, HDFC down by 4.77%, Gail India down by 3.45%, Coal India down by 2.29% and Bharti Airtel down by 2.21% were the top losers in the index. 

The top gainers on the BSE sectoral space were, IT up by 2.68%, Metal up by 1.88%, Teck up by 1.79%, Health Care up by 1.16% and Power up by 0.46%, while Consumer Durables down by 2.97%, PSU down by 2.22%, Realty down by 1.40%, Bankex down by 1.28% and Oil & Gas down by 1.12% were the top losers on the sectoral space.

Meanwhile, in order to boost business sentiments in a slowing economy, the Cabinet Committee on Investment (CCI) has cleared infrastructure projects worth Rs 1.83 lakh crore including 18 power projects that were stuck due to delay in clearance. The 18 power projects worth Rs 83,773 crore, which were stuck due to lack of fuel linkages, will sign coal supply agreements with Coal India by September 6.

The banks have already disbursed as much as Rs 30,000 crore for these power sector projects. Besides this, the CCI cleared hurdles for projects like Reliance Power's 4,000 MW ultra mega power project at Sasan in Madhya Pradesh, L&T's Metro Rail project in Hyderabad, Essar Power's Jharkhand project and Hindalco Industries project. The Cabinet Committee on Investment (CCI) has also set a 60- day deadline for ministries to clear various infrastructure projects in the power, coal and highways sectors.

Country’s infrastructure development is crucial to boost the economy’s growth and thus the government has recently set up the Cabinet Committee on Investments (CCI) to clear the bottlenecks holding back mega infrastructure projects. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector. Further, in order to speed up the implementation of infrastructure projects, the government has also set up special cell, special project monitoring group, which is meant to supplement CCI's efforts and has been tasked with monitoring the progress of projects cleared by CCI.

The CNX Nifty touched a high and low of 5,317.70 and 5,118.85 respectively. 

The top gainers on the Nifty were Ranbaxy up by 9.94%, Cairn up by 5.23%, JP Associate up by 4.00%, Tata Power up by 3.76% and HCL Tech up by 3.61%. On the other hand, BPCL down by 8.14%, PNB down by 6.14%, UltraTech Cement down by 5.91%, ONGC down by 5.51% and Axis Bank down by 5.32%.

The European markets were trading in red, France’s CAC 40 down by 0.27%, Germany’s DAX down by 1.12% and the United Kingdom’s FTSE 100 down by 0.54%.

Most of the Asian markets barring Jakarta Composite and Taiwan Weighted concluded Wednesday’s trade in red, as jitters over a possible US-led military strike against the Syrian government continued knocking Asian equities to a seven-week low and pushed oil prices and safe-haven gold to multi-month highs. An acute risk-off mode also boosted the appeal of the Japanese yen, which held near a one-week high against the dollar and euro after having posted its biggest rally in more than two months. Indonesian shares tumbled to a 14-month trough before concluding the trade in green, while Philippine stocks sank hitting more than eight-month low and Thai equities dropped to near one-year low. Indonesia’s central bank board will meet in a surprise move amid widespread speculation that it will have to raise interest rates again to defend the fast-falling rupiah, now it’s lowest since April 2009.

China will maintain stable macro-economic policies and refrain from any stimulus measures, a senior Chinese official stated, but he urged the United States to study very carefully the timing of an exit from its economic stimulus. Vice Finance Minister Zhu Guangyao stated that China has been sustaining a healthy growth momentum despite all the challenges from external and within, and the country is on track to achieve the growth rate of around 7.5% in line with the government target. Separately, the Census & Statistics Department stated that the value of Hong Kong’s total exports and imports of goods both showed year-on-year increases in July, at 10.6% and 8.3%. The value of total goods exports rose 10.6% year-on-year to $305.4 billion. Within this total, the value of re-exports increased 10.9% to $300.6 billion, while the value of domestic exports fell 6.7% to $4.8 billion.

From a tumbling currency to a crippling current-account shortfall, slowing economic growth, high inflation and retreating investors, Indonesia’s stature as emerging-market superstar is under siege. Standard & Poor’s warned that Indonesia needs to reduce costly fuel subsidies and rein-in the nation’s current account deficit if it hopes to minimize the impact of shrinking growth rates and weakening currencies currently affecting emerging economies. Rupiah forwards gained by the most in more than six weeks and government bonds declined on speculation the central bank will raise interest rates. Bank Indonesia’s board of governors will convene for an extra meeting to evaluate economic, monetary and banking conditions.