Benchmarks negotiate small gains despite volatility

Indian equity indices, snapping two-day losing streak, ended the volatile day of trade slightly in the positive terrain on Tuesday, as investors opted beaten down but fundamentally strong stocks. Earlier, markets opened in the red as sentiments remained down-beat on report that the country’s crude oil import bill jumped 9.5 percent to Rs 3,47,432 crore in the first five months of the current fiscal on account of sharp depreciation of the rupee against the US dollar. Benchmarks soon made a recovery and entered into positive trajectory as sentiments turned sanguine after the Department of Economic Affairs Secretary (DEA) Arvind Mayaram said that there is no room of fear for rupee tanking again, when US Federal Reserve decides on tapering of its stimulus programme. He further stated that Government has enough ammunition in its hands to deal with the situation. Some support also came in as government on Monday said it will not borrow more than Rs 2.35 lakh crore in the second half of the current fiscal.

However, gains on the up-side remained capped as the mood remained jittery on concerns that the Reserve Bank of India (RBI) might increase interest rates again in the near future to rein in persistently high inflation. Meanwhile, foreign institutional investors (FIIs) sold shares worth a net Rs 80.57 crore on September 23, 2013. Sentiments also remained dampened after global rating agency Moody’s revised its forecast, on the Indian economic growth, lower to 4.5 percent for 2013-14 from 5.5 percent projected earlier, on account of deteriorating macro-economic indicators of the country.

Global markets too traded choppy with most of the Asian equity benchmarks ending lower in the red as investors remained 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 from European markets, which traded in the green in early deals ahead of the reports on German business confidence and US home prices.

Back home, the rupee that made a weak start too supported the sentiments paring most of its losses and traded flat at the time of equity markets on the back of dollar sale by custodian. Stocks related to auto sector remained on the buyers’ radar on expectations of higher demand during the upcoming festive season. On the flip side, banking counter traded under  pressure through day’s trade 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.

The NSE’s 50-share broadly followed index Nifty rose marginally and held its psychological 5,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained by around twenty points to finish above the psychological 19,900 mark.

Moreover, broader markets too struggled to get traction during the trade and ended mixed. The market breadth remained in favor of advances as there were 1,147 shares on the gaining side against 1,168 shares on the losing side while 153 shares remained unchanged.

Finally, the BSE Sensex gained by 19.25 points or 0.10%, to settle at 19920.21, while the CNX Nifty added by 2.70 points or 0.05% to settle at 5,892.45.

The BSE Sensex touched a high and a low of 20050.42 and 19782.78, respectively. The BSE Mid cap index gained 0.08% and Small cap index was down by 0.02%.

The top gainers on the Sensex were Bajaj Auto up 2.73%, Tata Power up 2.15%, L&T up 1.82%, NTPC up 1.72% and HDFC up 1.66%, on the flip side, Hindalco Inds down 3.65%, Coal India down 2.56%, Jindal Steel down by 1.98%, Bharti Airtel down by 1.51%, and Wipro down by 1.14%, were the top losers on the index. 

On the BSE Sectoral front, Capital Goods up by 1.05%, Auto up by 1.05%, Power up by 0.78%, Consumer Durables up by 0.23%, and Heal Thcare up by 0.22%, were the top gainers, while Metal down by 1.00%, PSU down by 0.53%, Teck down by 0.46%, IT down by 0.46%, and Oil & Gas down by 0.38%, were the top losers on the sectoral front.

Meanwhile, exerting pressure on the country’s trade balance again, India's crude oil import increased by 9.5 percent to Rs 3,47,432 crore in the April-August period of the current fiscal on account of sharp depreciation of the rupee against the US dollar. In quantity terms, India imported 81.50 million tonne (MT) crude oil during the reported period, up 8.82 per cent from 74.892 MT in the same period last year. India relies heavily on oil imports as it satisfies around 80 percent of the domestic demand.

Rising oil import bill is a serious concern for the country as it is already struggling with high current account deficit (CAD). Country’s CAD widened to a record high to 4.8 percent in the previous fiscal on account of high gold imports and crude oil prices. For this fiscal, Indian crude oil export is expected to rise to around 196 MT, from 184.79 MT recorded in 2012-13.

India also imported 6.36 MT of petroleum products, mostly LPG, in the first five months of the current fiscal. While, LPG imports stood at 2.4 MT, down from 2.8 MT during the same period a year ago. On exports front, India’s exported $24.404 billion fuel mostly diesel, petrol and naphtha in the reported period.

The CNX Nifty touched a high and low of 5,938.40 and 5,854.55 respectively.

The top gainers on the Nifty were Bajaj-Auto up by 2.80%, Tata Power up by 2.72%, NTPC up by 2.03%, Larsen & Toubro up by 1.97% and Cipla up by 1.68%. On the other hand, Hindalco Industries down by 3.65%, BPCL down by 2.60%, Coal India down by 2.48%, Jindal Steel & Power down by 2.04%, and ACC down by 1.90%, were the top losers.

The European markets were trading in green, France’s CAC 40 was up by 0.50%, Germany’s DAX was up by 0.11%, and United Kingdom’s FTSE 100 was 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.