Post Session: Quick Review

In a choppy session of trade, benchmark equity indices regained fire-power in the dying hours to post a rally for second consecutive session of trade on Friday.  After dipping several times below the neutral line and giving out impression of negative close, benchmark equity indices unexpectedly picked up momentum to conclude in positive territory. Approval of land acquisition bill combined with rupee recovery, pepped up sentiment at D-Street. Although, bouts of profit-booking were witnessed at the time and post Prime Minister was giving speech in Parliament. Investors’ failing to draw any fresh take-away from Prime Minister’s Speech resorted to profit-booking.

However, the uptrend of the bourses remained limited on account of underlying caution ahead of the GDP data set to be released later in the day, which is expected to grow at 4.7% in the April-June quarter, lower than its decade-low growth of 5% seen in the last fiscal year and also with PM expecting relatively flat GDP numbers for Q1FY14. Prolonging gains for second straight session, Sensex and Nifty, both gained over a percent and half, ending past the crucial 18,600 and 5,450 levels respectively. Meanwhile, broader indices ended on mixed note; with Midcap index on BSE ending a bit below the neutral line and Smallcap index ending with gains of over quarter of a percent.

On the global front, Asian stocks finished mostly higher on Friday, bringing an end to a month of brutal selling in Southeast Asia. Markets were broadly positive on the final trading day for a tough month in Asia, despite renewed concerns over if and when the US Federal Reserve will start to roll back its bond-buying program hit Southeast Asian markets especially hard. Meanwhile, European shares edged lower on Friday, setting them on course for their worst weekly loss since June, as a rally in France's L’Oreal and Hermes after their first-half results was offset by losses in oil stocks.

Closer home, approval of land acquisition bill in apparently the most productive monsoon sessions of Parliament, heartened investors at Dalal Street. Although, few market-participants winded up their position with the end of the month, which led to benchmarks slipping below the neutral line for couple of time, audacity of select investors ahead of GDP data, tailing rupee recovery, aided sentiment.  On the BSE sectoral front, Consumer Durable, Banking and Health Care stocks were the prominent gainers, leading the markets from front, while those from Metal, Capital Goods and Realty counters were the top losers.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1161: 1068, while 179 scrips remained unchanged. (Provisional)

The BSE Sensex gained 229.99 points or 1.25% to settle at 18631.03.The index touched a high and a low of 18679.26 and 18272.76 respectively.  Among the 30-share Sensex pack, 18 stocks gained, while 12 stocks declined. (Provisional)

The BSE Mid cap index ended lower by 0.02% and Small cap index ended higher by 0.28%. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 2.27%, Bankex up by 1.84%, Health Care up by 1.83%, FMCG up by 1.82% and IT up by 1.61% were the top gainers, while Metal down by 2.40%, Capital Goods down by 0.30%, Realty down by 0.29%, Power down by 0.25% and Auto down by 0.15% were the top losers. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 5.62%, Cipla up by 4.96%, TCS up by 3.96%, HDFC Bank up by 3.86% and Hindustan Unilever up by 3.70%, while, Jindal Steel down by 8.85%, Sesa Goa down by 2.70%, Tata Motors down by 2.35%, Hindalco Inds down by 1.87% and Mahindra & Mahindra down by 1.61% were the top losers in the index. (Provisional)

Meanwhile, in yet another desperate attempt by the Congress party-led United Progressive Alliance to garner support ahead of the next general election, Lok Sabha approved the path breaking Land Acquisition Bill. The bill, which will replace a muddled law dating back to the 19th century, seeks to provide 'just and fair' compensation to families whose land as been acquired for industrial purposes and help accelerate industrial investment by making the rules clearer.

The Bill, rechristened as 'The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012, was passed in the Lower House with 216 votes against 19. To ensure that landowners benefit from the almost lopsided increase in the value of land after the development of a large infrastructure or industrial project, the bill proposes compensation by four times the market value in rural areas and twice the market value in urban areas. It also includes provision to deal with cases where compensation has not been paid in five years, and non-development of the acquired land for five years (to prevent a real estate arbitrage play).

However, to be enacted as a law, the bill needs to pass the muster of the Rajya Sabha and then will require the President's approval. The bill, once enacted, will make it mandatory to obtain the consent of 80 per cent landowners for acquiring land for private sector projects and 70 per cent consent for public-private projects.

Further, although proposed legislation may appease farmers, industry lobbies have already given it thumbs down. Confederation of Indian Industry president S. Gopalakrishnan voiced 'serious concerns' over some provisions of the Bill. As per the CII president, passage of this bill would increase the land acquisition cost by over three folds, making industrial projects unviable and raising costs in the overall Indian economy.

India VIX, a gauge for markets short term expectation of volatility lost 5.44% at 27.81 from its previous close of 26.21 on Thursday. (Provisional)

The CNX Nifty gained 70.15 points or 1.30% to settle at 5,479.20. The index touched high and low of 5,493.30 and 5,360.20 respectively. Out of the 50 stocks on the Nifty, 28 ended in the green, while 22 ended in the red.

The major gainers of the Nifty were Bajaj-Auto up 5.26%, Cipla up by 5.05%, TCS up by 4.26%, HDFC up by 4.24% and Hindustan Unilever up by 4.20%. The key losers were Jindal Steel down by 9.22%, Grasim down by 3.16%, Ranbaxy down by 2.63%, Tata Steel down by 2.53% and Hindalco Industries down by 2.43%.(Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.57%, Germany’s DAX down by 0.54% and the United Kingdom’s FTSE 100 down by 0.42%.

Most of the Asian markets, barring Nikkei 225 and Straits Times concluded Friday’s trade in green on signs of a positive lead from Wall Street. Japanese stocks fell on caution ahead of the month’s end and a long weekend in the US, while Australian and South Korean shares ended higher after a positive lead from Wall Street. Hong Kong shares were largely flat with positive bias with many investors staying on the sidelines awaiting a report on the health of Chinese manufacturing.  China’s official manufacturing purchasing managers index (PMI) for August, the latest indicator of manufacturing activity in the mainland, is due on Sunday. The Korea Composite Stock Price Index concluded to their highest close in nearly three months on upbeat US data and a sixth consecutive day of net buying by foreign investors. Stock markets in China rose alongside most regional peers lifted by finance, insurance and retailers after Chinese bank earnings beat expectations.

Japan posted some strong economic data, with the Finance Ministry reporting a second straight rise for consumer prices in July and a drop in the jobless rate. The core consumer price index, which excludes volatile fresh-food costs, rose 0.7% from a year earlier, accelerating from June’s 0.4% rise. The gain was the largest since November 2008 and marked a victory for the government of Prime Minister Shinzo Abe and the Bank of Japan, which have been pushing policies to rid Japan of crippling deflation. On a monthly basis, the core CPI was up 0.1%. Meanwhile, August core CPI for metropolitan Tokyo -- seen as a leading indicator for the nation as a whole -- was 0.5% higher than a year earlier, compared to a projected 0.4% rise seen. Separately, the unemployment rate slipped to 3.8% from 3.9% in June marking the second consecutive monthly drop for the jobless rate. In other data, spending for households of two or more people edged up a price-adjusted 0.1% during July, swinging from a 0.4% drop in June. The data provided evidence the Bank of Japan’s unprecedented monetary easing was yielding results in its attempt to pull the nation from an era of falling prices.

Chinese banks have extended 37.1 billion yuan ($6 billion) of loans to 6,626 micro and small businesses and farmers in Shanghai during the first half of this year, the Shanghai Bureau of the China Banking Regulatory Commission stated. Under the program that encourages lending to small companies and farmers, new loans of this type rose 10.5 billion yuan during the first half. The loans were made under a program organized by the regulator as the local government boosted measures to support small businesses amid the nation’s economic slowdown.