Post Session: Quick Review

Indian markets sensed some recovery on Tuesday after two straight session’s of butchery. Though, the gains were modest but the bourses managed to arrest the fall that they have been going through, since the announcement of RBI’s mid quarter monetary policy. All the beaten down sectors witnessed some buying, though the banking and realty sector were still to get any favour of investors. The rupee that made a weak start tailing the weakness in other emerging market currencies, too recovered on corporate dollar selling and helped the equity markets to strengthen, though negatively impacting the IT and technology stocks.

The global cues were though not that supportive, as majority of the Asian markets ended in red tailing their US counterparts, concerned about the debate on the US fiscal position as the Senate is considering a measure to cut off funding for Obama’s healthcare law. Though, the domestic markets got some support with the positive opening of the European markets, which rose ahead of the reports on German business confidence and US home prices.

Back home, the markets got some support with the government saying that it will not borrow more than Rs 2.35 lakh crore in the second half of the current fiscal, keeping the government’s gross borrowing programme for 2013-14 intact at Rs 5.79 lakh crore with Rs 3.44 lakh crore in the first six months of the current fiscal. Traders even overlooked the global rating agency Moody's revised lower forecast, on the Indian economic growth to 4.5 percent for 2013-14 from 5.5 percent projected earlier, on account of deteriorating macro-economic indicators of the country. However, markets were unable to post any substantial gains and remained range-bound, as there was not much to support the indices on upside. On the contrary there was some disappointment in India Inc after the government said that it was not planning any special stimulus for the corporate sector to tide over the current economic woes. The banking gauge came under pressure in early deals after Moody's downgraded its outlook on the PSU major State Bank of India’s (SBI) financial strength rating to ‘negative’ from ‘stable’. Earlier, Fitch had downgraded some ratings of Indian Bank, Punjab National Bank and Bank of Baroda on expectations of a further deterioration in asset quality. SBI recovered from the lows of the day and but still closed lower by about half a percent. Broader markets too made a flat closing though auto, capital goods and power sector managed to post gains of close to a percent, while metal was the major laggard suffering cut of about a percent.

The market breadth on the BSE ended slightly in red; advances and declining stocks were in a ratio of 1149: 1164, while 155 scrips remained unchanged. (Provisional)

The BSE Sensex gained 27.02 points or 0.14% to settle at 19927.98.The index touched a high and a low of 20050.42 and 19782.78 respectively.  Among the 30-share Sensex, 15 stocks gained, while 15 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.10% and 0.01% respectively. (Provisional)

On the BSE Sectoral front, Auto up by 1.12%, Capital Goods up by 1.09%, Power up by 0.82%, Health Care up by 0.24% and FMCG up by 0.04% were the top gainers, while Metal down by 1.01%, PSU down by 0.58%, IT down by 0.50%, Teck down by 0.50% and Oil & Gas down by 0.35% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 2.54%, Tata Power up by 2.46%, L&T up by 1.92%, HDFC up by 1.90% and NTPC up by 1.72%, while, Hindalco Industries down by 3.39%, Coal India down by 2.74%, Jindal Steel down by 2.04%, Bharti Airtel down by 1.75% and Wipro down by 1.28% were the top losers in the index. (Provisional)

Meanwhile, Global rating agency Moody's has revised its forecast, on the Indian economic growth, lower to 4.5 per cent for 2013-14 from 5.5 per cent projected earlier, on account of deteriorating macro-economic indicators of the country. Citing depreciating rupee a major hurdle for economic growth, Moody’s said that recent depreciation in the rupee value will increase inflationary pressures in the country and keep domestic interest rates relatively high, which will hinder a recovery in domestic demand growth. Indian economic growth slowed down to four-year low at 4.4 percent in Q1 FY14.   

Moody's also warned that India is among the countries that are most vulnerable to capital outflows as it relies heavily on external funding. By adding further, it said that earlier, US Fed's talk for tapering of monetary stimulus depreciated the rupee by 15 per cent, making it the worst performing currency in Asia. The domestic currency depreciated to a record low of 68.86 to the US dollar on August 28 on account of high foreign institutional investors (FIIs) outflow and high current account deficit (CAD).

Presently, Moody’s had reaffirmed ‘Baa3’ (which is equivalent to BBB minus) sovereign credit rating for India that indicates investment grade but with a stable outlook. It had already raised concerns over the rising inflation, inadequate infrastructure and higher subsidy burden on the government.

India VIX, a gauge for markets short term expectation of marginally lost 1.11% at 26.72 from its previous close of 27.02 on Thursday. (Provisional)

The CNX Nifty gained 3.95 points or 0.07% to settle at 5,893.70. The index touched high and low of 5,938.40 and 5,854.55 respectively. Out of the 50 stocks on the Nifty, 23 ended in the green, while 26 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Bajaj-Auto up 2.80%, Tata Power up by 2.72%, NTPC up by 2.03%, L&T up by 1.97% and Cipla up by 1.68%. The key losers were Hindalco down by 3.65%, BPCL down by 2.60%, Coal India down by 2.48%, Jindal Steel down by 2.04% and ACC down by 1.90%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.48%, the United Kingdom’s FTSE 100 up by 0.06% and Germany’s DAX up by 0.10%.

Most of the Asian markets, barring Taiwan Weighted concluded Tuesday’s trade in red with Shanghai giving up most of its gains from the previous session, leading declines in Asia, while the Indonesian rupiah hit a more-than-four-year low against the dollar. Indonesia will boost bilateral swap agreements to almost $40 billion by signing deals with China and South Korea and increasing an existing agreement with Japan, as Southeast Asia’s biggest economy battles a slumping currency. Stocks in Tokyo resumed trading after a public holiday with the Nikkei Average down as stronger yen weighed on the market. Bank of Japan board member Sayuri Shirai stated that central bank’s forward guidance on policy gives it scope to take more step if needed to achieve its goal of 2% inflation, and means it will not end its monetary easing until the target is reached.

Hong Kong’s overall gross domestic product rose 3.3% over a year earlier in real terms in the second quarter of 2013, accelerating from the 2.9% gain in the first quarter, the Census and Statistics Department stated. Analyzed by constituent services sector and on an annual comparison, net output of all the service activities taken together grew 3.7% in real terms in the second quarter, compared with the 2.8% growth in the first quarter.