Post Session: Quick Review

The Indian markets witnessed some respite after two days of gloom, ignoring the global headwinds as the US government finally went for shutdown. The domestic markets that made a positive start, contrary to last session when it declined on weak global cues, showed strength on good domestic global cues. Traders took cues from the lower than expected CAD numbers for the first quarter, though the numbers coming at 4.9 percent of gross domestic product were comparatively higher than 3.6 percent of GDP in the previous quarter. In early deals there was some support from the core sector data too that showed fastest pace of growth in seven months to 3.7% in August compared to 3.1% in the previous month.

However, the global cues were mixed as the US markets ended lower overnight on concern of looming government shutdown from the midnight as Senate on Monday twice rejected Republican demands to delay key portions of “Obamacare” as a condition for keeping the government open. Though, most of the Asian markets made positive start expecting that the US Congress can reach a last-minute deal. And the Japanese confidence in Japan reached an almost six-year high. The domestic markets looked unperturbed even with the cautious start of the European markets, which though rebounded from their biggest decline in a month, assessing the impact of US shutdown.

Back home, the mood remained more or less calm on the local front, though in a knee-jerk reaction to the partial shutdown of the US government, the markets lost their strength but soon recovered, hoping a better macroeconomic environment. Meanwhile, Economic affairs secretary Arvind Mayaram said that a shutdown of the US government is not likely to have a major impact on the Indian economy. He also said that the Indian economy will grow at more than 5 percent in the current financial year ending in March 2014 and while commenting on CAD numbers he said that the Q2 GDP growth should be better than first quarter, as Gold import this year would be restricted below 800 tonnes. Markets sentiments were also boosted by the manufacturing data, which despite remaining in contraction mood improved from the last month’s number. The HSBC Purchasing Managers’ Index (PMI) increased at 49.6 in the month of September, as against 47.5 in August. The auto numbers started trickling in and some good monthly sales numbers from Maruti Suzuki, TVS and Atul auto, helped the markets remain firm. Sectorally, the day witnessed comeback of the rate sensitive banking and realty sector which gained over two and half a percent on BSE, however the oil 7 gas and power witnessed cut of over half a percent. In stock specific movement, HUL suffered cut of over a percent after its parent company Unilever warned that slowdown in its emerging markets accelerated in the third quarter. On the same time Maruti Suzuki gained around two percent after reporting 11.7% rise in its total car sales for the month of September.

Global markets were choppy on Tuesday as hopes of a last minute resolution on the US government shutdown died and the White House ordered government agencies to begin shutting down. The shutdown could slow growth and spook investors worldwide.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1316: 1011, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex gained 144.23 points or 0.74% to settle at 19524.00.The index touched a high and a low of 19532.91 and 19264.72 respectively.  Among the 30-share Sensex pack, 17 stocks gained, while 13 stocks declined. The BSE Mid cap and Small cap indices ended higher by 0.55% and 0.51% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 2.85%, Realty up by 2.73%, Capital Goods up by 1.71%, Auto up by 1.16% and Teck up by 0.42% were the top gainers, while Oil & Gas down by 0.73%, Power down by 0.63%, Metal down by 0.28%, PSU down by 0.17% and FMCG down by 0.01% were the top loser in the space. (Provisional)

The top gainers on the Sensex were HDFC Bank up by 3.08%, BHEL up by 2.95%, ICICI Bank up by 2.94%, HDFC up by 2.63% and Bajaj Auto up by 2.35%, while, Tata Power down by 3.82%, Sesa Goa down by 2.91%, NTPC down by 2.87%, ONGC down by 2.11% and Jindal Steel down by 1.42% were the top losers in the index. (Provisional)

Meanwhile, in a big sign of relief to Indian policymakers, eight core industries posted a 7-month high growth rate of 3.7 percent in August mainly on the back of strong performance of power, cement, steel and fertiliser sectors. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weightage of 37.9% in the overall Index of Industrial Production (IIP). However, growth of the core sectors was lower as compared to 6.1 percent recorded in the same month last year.

Petroleum refinery production, representing 5.94% weight in IIP index grew by 4.9% in August, 2013 over August 2012. Cumulative growth of Petroleum refinery production during April-August, 2013-14 was at 4.8% over the index of corresponding period of previous year. Electricity generation having 10.32% weight in index registered a growth of 6.7% in August, 2013 over the same month of corresponding period. During April to August 2013-14 it recorded a growth of 4.1% over the index of corresponding period of previous year.

Fertilizer production with weightage of 1.25% in IIP index registered a growth of 1.7% in August, 2013 over August, 2012. The cumulative index of Fertilizer production during April to August 2013-14 grew at 1.8% on YoY basis.

Steel and Cement sectors having weightage of 6.68% and 2.41% respectively in IIP index, registered a growth of 4.3% and 5.5% respectively, in the month under review over August 2012. In cumulative terms, steel and cement production was 4.1 % and 3.2% during April to August 2013-14.

Crude oil, with weightage of 5.22% in index moderated by 1.5% in August, 2013 over August, 2012, while its cumulative index during April to August 2013-14 moderated by 1.6% over corresponding period of previous year. Further, coal production with weightage of 4.38% in index registered a growth of 5.5% in August, 2013 over the same period of corresponding period. However, on cumulative basis, growth during April-August, 2013-14 was increased by 0.5% compared to April- August 2012-13.

Natural Gas production having weightage 1.71% in IIP index declined by 16.1% in August 2013 as compared to the month in August, 2012. The cumulative index for Natural Gas production during April to August 2013-14 declined by 17.0% over corresponding period of previous year.

India VIX, a gauge for markets short term expectation of volatility lost 3.30% at 25.77 from its previous close of 26.65 on Monday. (Provisional)

The CNX Nifty gained 50.00 points or 0.87% to settle at 5,785.30. The index touched high and low of 5,786.45 and 5,700.95 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 DLF up 6.99%, Ranbaxy up by 5.90%, IndusInd Bank up by 4.66%, Axis Bank up by 3.98% and ICICI Bank up by 3.45%. The key losers were Tata Power down by 3.88%, Sesa Goa down by 3.18%, NTPC down by 2.61%, ONGC down by 2.18% and Hindustan Unilever down by 1.82%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.73% and Germany’s DAX up by 0.60%, while the United Kingdom’s FTSE 100 down by 0.19%.

The Asian markets concluded Tuesday’s trade in green following modest sell-off sparked after deadline for US government shutdown passed. Hong Kong market was closed on account of National Day, while Shanghai Stock Market will remain close from October 1 to October 7 on account of Golden Week holiday. Japanese Prime Minister Shinzo Abe proceeded with an April sales-tax increase and will implement a stimulus program as he tries to rein in the world’s biggest debt burden without jeopardizing efforts to end deflation. Sentiment among large Japanese companies sharply improved in the three months to September, the Bank of Japan’s Tankan survey showed. The Tankan Manufacturing index rose to a seasonally adjusted 12 from 4 in the preceding quarter.

Indonesia recorded a surprise trade surplus for August, its first in five months, offering some relief to the ailing rupiah, but the country’s current account deficit will likely keep weighing on Asia’s weakest currency this year. Southeast Asia’s largest economy had a trade surplus of $130 million in August, compared with a record $2.3 billion deficit the previous month. Indonesia’s consumer price index rose 8.40% in September year on year, the Central Statistics Agency (BPS) reported. That was down from the 8.79% increase in August. Indonesian President Susilo Bambang Yudhoyono’s administration plans to release additional economic measures to the raft of policies announced in August, as the government seeks to address weakening economic growth and a depreciating rupiah.

Hong Kong’s government spending from April to August amounted to $170.3 billion, while revenue collected totaled $126.3 billion, resulting in a $44 billion deficit. Financial Services & the Treasury Bureau stated that the deficit was mainly because some major types of revenue, including salaries and profits taxes, were mostly received towards the end of a financial year. The fiscal reserves stood at $689.9 billion as at August 31. South Korea’s trade balance fell more-than-expected to a seasonally adjusted 3.71B, from 4.85B in the preceding quarter.