Post session - Quick review

Indian equity markets once again witnessed an scary session of trade as investor’s abandoned risky equity assets amidst signs that rising borrowing costs were affecting AAA-rated France, which stirred fears that even core euro zone members may not escape contagion from the region's debt crisis. The political outlook which remained unclear in struggling Italy and Greece as they attempt to push through severe austerity measures needed to get bail-out funds and win market confidence, got the bourses under pressure. Italian 10-year bond yields on Tuesday climbed back above 7 percent, a level of funding costs seen as unsustainable for the debt-ridden country, while Spanish 10-year bond yields rose to 6.3 percent. The trend then spread to France, where the premium over comparable German Bonds hit euro-era highs above 190 basis points.

Back on the home turf, benchmark indices in the midst of daunting global setup and lacking any significant upside trigger faltered, as fears of slowdown in the economy prompted investors to go short on their positions on reports that India’s September services export receipt declined by 5.63% month-on-month. The services sector contributes over 50% to India's GDP. Import payments were at $6.8 billion in September, slightly lower than $6.86 billion in the previous month, data showed. Meanwhile, India’s state run oil marketing firms slashed petrol prices for the first time in almost three years after an increase this month, sparked protests by the opposition and some members of the ruling coalition. The move sparked sharp sell-off in stocks like IOC, BPCL and HPCL which fell in the range of 3-7%. However, Aviation Stock crashed in trade today after public sector oil marketing companies hiked prices of aviation turbine fuel by about 2% per kilo litre from midnight Tuesday, 15 November 2011.  However, Kingfisher Airlines continuing its bull run proved to be an exception. The stock accumulated over 14% after a defiant Vijay Mallya rubbished talks of shutting down Kingfisher Airlines and tried to put up a brave front as the airline suffered a bigger second-quarter loss. Mallya said, the airline has a turnaround plan ready, is confident of cutting debt, and needs working capital from banks. The stock has been on move ever since reports flashed that Reliance Industries might be a white knight for Kingfisher. However, Reliance refuted to the news that stated that the company might either make a financial investment in the airline or pick up equity through a preferential offer which could be followed up by an open offer to public shareholders.

On the global front, overnight on Wall Street, indices closed marginally higher on Tuesday after data on retail sales showed Americans spending more on autos, electronics and building supplies in October-the fifth straight month of increases. Sales increased 0.5 percent from the previous month, a faster rate than economists expected and the latest indication that the US economy is likely to avoid another recession. However, Asian stock market ended in red for yet another day as uncertainties looming over the European region once again remained the primary overhang. Meanwhile, European shares extended gains on Wednesday, with Italian and Spanish stocks gaining as sovereign bond yields fell back from the alarmingly high levels that sparked a sell-off in equities in the previous two sessions.

Back on Dalal Street, although some recovery came in the dying hours of trade, but the benchmarks by the end of the trade again slipped in red. On the BSE sectoral front, stocks from Consumer Durable, Fast moving Consumer Goods and Metal counters aided the benchmarks in recovery, while stocks from Capital Goods, Power and Oil & Gas counters undid the good work. 30 share barometer index of BSE-Sensex-plummeted over a 100 points to conclude the trade below 16800 level. Similarly, 50 share index of NSE-Nifty-declining over 25 points ended sub 5100 mark. The broader indices too knocked off over 0.50%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 937:1902 while 103 scrips remained unchanged.

The BSE Sensex lost 9.82 points or 0.06% and settled at 16,872.85. The index touched a high and a low of 16,878.30 and 16,641.65 respectively. 15 stocks advanced against 15 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.52% while Small-cap index was down 1.04%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 1.32%, FMCG up 0.98%, Metal up 0.84%, Realty up 0.77% and Bankex up 0.56% were the only gainers while Capital Goods down 3.36%, Power down 1.68%, Oil & Gas down 0.88%, Health Care down 0.71%  and IT down 0.59% were the top losers.

The top gainers on the Sensex were Jindal Steel up 3.53%, SBI up 2.66%, DLF up 2.45%, Tata Steel up 2.44% and ONGC up 1.91%.

On the flip side, L&T down 3.47%, BHEL down 3.46%, JP Associates down 3.21%, Hero MotoCorp down 2.78% and Sun Pharma down 2.78% were the top losers on the index. (Provisional)

Meanwhile, India’s services export receipt for the month of September declined by 5.63% to $11.22 billion as compared to $11.89 billion in August, according to the data released by Reserve Bank of India (RBI). Imports of services also slipped marginally by 1.02% to $6.79 billion in the month under review, compared to $6.86 billion in August.

During the July-September quarter of this fiscal, India’s cumulative export of services amounted to $33.525 billion. Imports, meanwhile, stood at $19.553 billion during the second quarter of the fiscal year 2011-12, as per RBI release.

The services sector, which contributes over 50% to India's GDP, is going through turbulent times off late thanks to the deteriorating situation in Euro-zone and slowing American economic growth. The US and Europe together account for around 75% of India’s services exports. In addition, domestic economic activity too remains vulnerable with depreciating rupee, rising borrowing costs and mounting inflationary pressure taking its toll and making the domestic environment unaccommodating for the service sector.

RBI has recently started releasing provisional aggregate monthly data on India's international trade in services, with a lag of 45 days. This provisional data will undergo a revision once the Balance of Payments (BoP) data is compiled on a quarterly basis, which will be released with a lag of a quarter, the apex bank said.

India VIX, a gauge for market’s short term expectation of volatility lost 3.58% at 25.04 from its previous close of 25.97 on Tuesday. (Provisional)

The S&P CNX Nifty lost 5.05 points or 0.10% to settle at 5,063.45. The index touched high and low of 5,065.20 and 4,989.50 respectively. 26 stocks advanced against 24 declining ones on the index. (Provisional)

The top gainers on the Nifty were Jindal Steel up 2.92%, Tata Steel up 2.75%, SBI up 2.72%, DLF up 2.63% and M&M up 2.11%.

On the other hand, SAIL down 5.40%, BPCL down 4.42%, Siemens down 4.27%, GAIL down 3.62% and HCL Tech down 3.35% were the top losers. (Provisional)

The European markets are trading in mix, with France's CAC 40 up 0.12%, Germany's DAX down 0.87% and FTSE 100 down 0.03%.

The carnage on Asian equity indices prolonged for yet another day on fears that the debt crisis may spread to other euro zone nations as rising borrowing costs were affecting AAA- rated France. The political outlook remained unclear in Italy and Greece as they tried to push through severe austerity measures needed for bailout package and win the market confidence. The Italy Prime Minister designate, Mario Monti, is expected to unveil Italy’s new government on Wednesday. Moreover, the sentiments were also down as cash continued to flow out of European government debt on Tuesday, triggered by a less-than-stellar auction of Spanish treasury bills, pushing yields on Italian bonds above the key psychological 7.0% again and hitting even fiscally strong Northern European nations, such as Triple-A-rated France, Austria, the Netherlands and Finland.

Meanwhile, Chinese benchmark declined over two and a half percent on Wednesday, the biggest fall in nearly two months, dragged by financial and property issues after the International Monetary Fund warned that China’s biggest commercial banks face systemic risks. The IMF warned on Tuesday that China’s biggest commercial banks face systemic risks if a combination of credit, property, currency and yield curve shocks that could be withstood in isolation were to occur together.