Post Session: Quick review

Indian equity markets in the choppy session of trade gained close to a percent ahead of the conclusion of the two-day US Federal Reserve meeting later in the evening. After slipping several times below neutral line and recovering thereafter, local equity markets picked up pace in the last leg of trade to end well in the green terrain. Building on previous sessions’ gains, both, Sensex and Nifty, ended just shy of the crucial 20,000 and 5,900 psychological levels respectively.

Appreciation of Rupee on dollar sales by banks and exporters on the back of its weakness overseas, also aided the sentiment at Indian equity markets. Nevertheless, positive trade of European markets, which held nearly 5 years high on expectations that the US central bank would announce only a moderate reduction in its programme of monetary stimulus, provided the required impetus to the local equity markets.  Many investors expect the Fed to cut its $85 billion monthly purchases of bonds by about $10 billion.

However, Asian shares ended mixed as investors contemplated over what could be the first tentative step taken by the US Federal Reserve to wean the world off the super-easy money it has used to treat the last five years of financial turmoil.

Closer home, Indian equity markets after making a flattish start stunned the traders with its momentum approaching the last hour of trade. With across the board buying, all the sectoral indices ended in green. Nevertheless, stocks from Realty, Banking and Fast Moving Consumer Goods enticed maximum attention. Consumer goods makers and drug companies perceived defensive, rose on caution ahead of the conclusion of the two-day US Federal Reserve meeting.  Besides, shares of jewellery makers also hogged limelight in today’s trading session after the government increased import duty on gold and silver to 15 percent from 10 percent to protect the domestic industry. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1219: 1117, while 167 scrips remained unchanged. (Provisional)

The BSE Sensex gained 158.13 points or 0.80% to settle at 19962.16.The index touched a high and a low of 20013.33 and 19775.29 respectively. Among the 30-share Sensex, 24 stocks gained, while 6 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.45% and 0.08% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 2.03%, Bankex up by 1.56%, FMCG up by 1.37%, Oil & Gas up by 0.87% and Health Care up by 0.81% were the top gainers, while there were no losers in the space. (Provisional)

The top gainers on the Sensex were NTPC up by 3.67%, Tata Power up by 3.11%, Dr Reddys Lab up by 2.64%, SBI up by 2.38% and Hindustan Unilever up by 2.21%, while, BHEL down by 4.76%, Hero MotoCorp down by 2.84%, Sesa Goa down by 1.58%, HDFC down by 0.61% and Mahindra & Mahindra down by 0.47% were the only losers in the index. (Provisional)

Meanwhile, foreign direct investment (FDI) into India increased by 12.9 percent on y-o-y basis to $1.66 billion in July from $1.47 billion recorded in the same month of previous fiscal, highest in the previous three months. During April to July period of current fiscal, FDI inflows were up by 20 per cent to $7.05 billion over the same period of previous fiscal.

The sectors that received large inflows during the first four months of FY14 include services ($1.02 billion), pharmaceuticals ($1 billion), automobile industry ($637 million) and construction ($359 million). Country wise, maximum FDI during the period came from Singapore ($2.21 billion), followed by Mauritius ($1.85 billion), the Netherlands ($520 million), Germany ($518 million), and the US ($371 million).   

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas. Meanwhile, India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Further, a rise in FDI will help support the rupee, which recently depreciated to record low of over 68.50 against the US dollar. 

India VIX, a gauge for markets short term expectation of volatility lost 0.85% at 27.69 from its previous close of 27.93 on Tuesday. (Provisional)

The CNX Nifty gained 49.25 points or 0.84% to settle at 5,899.45. The index touched high and low of 5,916.90 and 5,840.20 respectively. Out of the 50 stocks on the Nifty, 36 ended in the green, while 14 ended in the red.

The major gainers of the Nifty were DLF up 4.91%, NTPC up by 4.00%, Tata Power up by 3.97%, Grasim up by 3.72% and Bank of Baroda up by 3.31%. The key losers were BHEL down by 4.43%, Hero MotoCorp down by 2.95%, Sesa Goa down by 1.55%, Cairn India down by 1.39% and NMDC down by 0.97%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.50%, Germany’s DAX up by 0.46% and the United Kingdom’s FTSE 100 up by 0.21%.

Most of the Asian markets concluded Wednesday’s trade in red ahead of close of the much-anticipated US Federal Reserve policy meeting. The Fed will wrap up its meeting later Wednesday, with many investors expecting the central bank to start reducing the scale of its bond-buying program - a process that has become known as tapering. South Korean markets will be closed from today i.e. September 18 for the rest of the week for the Chuseok holidays. Trade will resume on September 23. The average prices of new homes in 70 Chinese cities in August rose to their highest levels so far this year, spurred by unabated home-buying in major cities even as analysts called for more sustainable policies to tame price gains. Compared with a year earlier, growth in median home prices in 70 Chinese cities accelerated in August for the seventh straight month after a turnaround in January, data released by the National Bureau of Statistics showed. In Hong Kong, total goods exports volume rose 8.8% in July over a year earlier, while the volume of goods imports rose 8.5%, the Census & Statistics Department reported. The volume of Hong Kong’s goods re-exports for the month rose 9.2%, while domestic exports fell 7.9%. Total export volume to the Mainland rose 13.1% compared to the same period last year.

Meanwhile, Business sentiment among Asia’s top companies deteriorated in the third quarter, led by businesses in export engines such as China and South Korea, ending three consecutive quarters of improving sentiment. The Thomson Reuters/Insead Asia Business Sentiment Index fell to 66 in the third quarter from 71 in the second quarter when it reached the highest level in more than a year. An index reading above 50 indicates an overall positive outlook. Some of the weakest readings came from north Asia’s economies of China, South Korea and Taiwan, and regional trading hub Singapore, all of which turned in readings of 50 - highlighting the impact of a stuttering global economy.