Post Session: Quick Review

Indian markets extending their hangover of RBI’s unexpected Repo rate hike, slipped further on Monday. The start of the crucial F&O expiry week was a mood dampener with benchmarks not getting any respite from the relentless selling after a subdued gap-down start. Traders were concerned after the hawkish tone of the new RBI governor and there were fear of another rate hike going further. Though, in first half there was cautiousness too, ahead of the announcement of the government’s second-half borrowing calendar.

The global cues though were mixed, as some of the Asian markets showed sharp surge after a flash measure of the China’s manufacturing jumped more than forecast to 51.2 in September from 50.1 in August. However, the European markets made a flat start ahead of the release of a measure of European industrial activity. The domestic markets that had started showing some recovery once again fell on subdued start of the European counterparts.

There was gloom across the markets with some resistance coming only from the consumer durables, IT and Tech sector stocks with rupee once again turning to the depreciating trajectory, as the dollar remained in demand by the importers due to their month end obligations. Markets even overlooked Planning Commission deputy chief Montek Singh Ahluwalia’s statement that growth will pickup in H2FY14 and the RBI’s move was more of a rebalancing act. Benchmarks tried to hold their gap-down opening level during the morning trade but the worried investors took the opportunity to book profits. Once after slipping off the crucial support level of 19900 (Sensex) and 5900 (Nifty) the trade turned very choppy and there was hardly any resistance with markets continuing their downtrend till last. Broader markets, which showed some strength in early trade and even entered the green, too lost their traction and closed in red. Finally the markets ended near the lows of the day, down by around two percent. The most impacted pack of the trade were banking and realty, while the banking suffered purely on post RBI policy symptom, it was a double whammy for the realty, which apart from the rise in rate, suffered due to a report highlighting the huge inventories of the real estate developers and concern of some distress selling. The non sectoral gauge ‘Sugar’ too remained buzzing with UP based sugar companies suffering cut of around 1-3%, lobbying for an immediate review on current cane pricing and introduction of the revenue sharing model as per the Rangarajan committee recommendations. The PSU oil marketing companies were the other pack that was severely beaten down with no diesel price hike in sight.

The market breadth on the BSE ended in favour of negative; advances and declining stocks were in a ratio of 996: 1317, while 143 scrips remained unchanged. (Provisional)

The BSE Sensex lost 362.75 points or 1.79% to settle at 19900.96.The index touched a high and a low of 20199.81 and 19826.30 respectively.  Among the 30-share Sensex pack, 8 stocks gained, while 22 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.27% and 0.58% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 2.36%, IT up by 0.91% and Teck up by 0.43% were the top gainers, while Bankex down by 4.41%, Realty down by 4.33%, Capital Goods down by 3.28%, PSU down by 2.56% and Power down by 2.26%, were the top losers in the space. (Provisional)

The top gainers on the Sensex were Sesa Goa up by 3.14%, Hindalco Industries up by 1.84%, Wipro up by 1.75%, Coal India up by 1.08% and Dr Reddy's Lab up by 1.06%, while, SBI down by 5.39%, Maruti Suzuki down by 5.19%, ONGC down by 4.86%, ICICI Bank down by 4.39% and L&T down by 4.20% were the only losers in the index. (Provisional)

Meanwhile, as per the Associated Chambers of Commerce and Industry of India (Assocham), Indian non-oil trade deficit in the current financial year is likely to be much lower at $65-72 billion as against the $81.8 billion in 2012-13 on the back of curbs on gold imports. In order to check the country’s gold imports, the government had recently hiked gold import rates to 15% from 10% earlier and central bank also introduced 80/20 rule under which 20% of all gold imports has to be re-exported. Indian gold imports declined to $0.65 billion in August as compared to $2.9 billion in the previous month and a record $8.4 billion in May. 

Indian non-oil imports during August, 2013 were estimated at $21.96 billion, which was 10.4% lower than non-oil imports of $24.50 million in August, 2012. Non-oil imports during April-August, 2013-14 were valued at $128.11 billion, which was 0.3% lower than the level of such imports valued at $128.46 billion in April-August, 2012-13. However, industry body, Assocham said that the oil trade deficit may go up in the current fiscal because of continuing pressure on the crude oil prices in the international markets. Oil imports during April-August, 2013-14 were recorded at $69.68 billion, which was 5.60% higher than the oil imports of $65.98 billion in the corresponding period last year.

In order to boost Indian oil and gas sector, Assocham expressed the need of a holistic energy policy so that a lot of investment in the country will be channeled in the exploration of both crude and natural gas. It further suggested that policies governing oils pricing mechanisms, to be paid to the contractors, should be fixed in a transparent manner. Further, it mentioned that centre and state governments should reduce over-dependence on the oil sector for raising taxation revenue.

India VIX, a gauge for markets short term expectation of volatility gained 9.26% at 27.02 from its previous close of 24.73 on Friday. (Provisional)

The CNX Nifty lost 122.35 points or 2.04% to settle at 5,889.75. The index touched high and low of 5,989.40 and 5,871.40respectively. Out of the 50 stocks on the Nifty, 9 ended in the green, while 40 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Sesa Goa up 2.92%, HCL Tech up by 2.85%, Hindalco up by 1.80%, Hero MotoCorp up by 1.28% and Dr. Reddy's Laboratories up by 1.26%. The key losers were Bank of Baroda down by 7.33%, DLF down by 7.03%, Axis Bank down by 6.56%, IndusInd Bank down by 6.44% and Jaiprakash Associates down by 6.12%. (Provisional)

Most of the European markets were trading in red with, the United Kingdom’s FTSE 100 down by 0.20% and Germany’s DAX down by 0.04%, while France’s CAC 40 up by 0.10%.

Most of the Asian markets concluded Monday’s trade in red with Shanghai moving higher on further signs of an improving Chinese economy, while Southeast Asian markets gave up some of the gains they made. This early indicator is the latest in a string of economic data in recent weeks that points to a recovery in Asia’s largest economy, picking itself from weakness earlier in the summer. Japanese market was closed today on occasion of ‘Autumn Equinox Day’. Preliminary results from HSBC’s closely watched gauge of China’s manufacturing activity, released showed a jump to a six-month high in September, beating expectations and boosting local stocks. The flash version of the China manufacturing Purchasing Managers’ Index, published by HSBC and Markit, rose to 51.2, compared to August final result of 50.1. A reading above 50 indicates expansion, while anything below that signals contraction.

In Hong Kong, overall consumer prices rose 4.5% year-on-year in August, less than July’s corresponding 6.9% increase, the Census & Statistics Department reported. Netting out the effects of all one-off Government relief measures, the year-on-year rate of increase in the Composite Consumer Price Index in August was 4.3%, slightly higher than July's 4.2% increase, mainly due to the increases in private housing rentals, as well as the prices of salt-water fish and package tours.