Post Session: Quick Review

Recovery in the last leg of trade saved benchmarks, leading to a flattish close on Monday. After awfully languishing in the red zone for most part of the session, Indian equity markets staged surprising recovery in the dying hours of trade, suggesting some underlying strength of the bourses. However, pessimistic global set-up combined with absence of positive catalyst at home front led to the muted close of bourses for second consecutive session. Chiefly on speculations of foreign investors reducing their purchases of the nation’s stocks as situation in US remained deadlocked over extending the debt ceiling. Additionally, reports suggesting of disappointing Q2 earning season being in the offing, also led to some jittery nerves. However, some amount of buying which got triggered at lower level aided barometer gauges in erasing their heavy loss. By the close of trade, Sensex and Nifty, in the lackluster session of trade, ended above the crucial 19,900 and 5,900 bastions respectively.

On the global front, signs of growing intransigence among US lawmakers in crucial budget and debt ceiling talks sent both European and Asian shares into a tailspin on Monday. Investors were unnerved by an apparent hardening of stances by Democrats and Republicans over the weekend towards crucial negotiations to end a partial government shutdown and raise the U.S. borrowing limit, needed in 10 days to avoid a debt default.

Closer home, contrary to the subdued trend, stocks from Information Technology, Metal and Health Care witnessed buying interest. Indian software services exporters attracted buying on hopes to gain from additional business from their largest market, the United States, as a slew of regional banks there look to outsource more technology work than ever before. Nevertheless, expectation of good result from Infosys also fired up all the stocks from the sector. On the flip side, stocks from Banking, Realty and Capital Goods counters were the negative forces. Banking stocks came under heavy selling pressure, led by the sharp fall of ICICI Bank which slipped over 1.50% on reports that the bank has raised an alarm over loan default by Dabhol power plant after being rendered idle due to fuel supply issues. In stock-specific activity, Apollo Tyres gained over 4.50% on growing uncertainty about the status of its $2.5 billion deal to buy US based Cooper Tire & Rubber Co. On the other hand, Coal India lost over 3% after reports suggested that the government may go ahead with plans to divest 5 per cent stake through follow-on public offer (FPO).The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1282: 1086 while 154 scrips remained unchanged. (Provisional)

The BSE Sensex lost 0.73 points to settle at 19915.22.The index touched a high and a low of 19921.38 and 19647.88 respectively.  Among the 30-share Sensex, 17 stocks gained, while 13 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.45% and 0.47% respectively. (Provisional)

On the BSE Sectoral front, IT up by 1.21%, Metal up by 0.91%, Teck up by 0.89%, Health Care up by 0.87% and Power up by 0.45% were the top gainers, while Bankex down by 1.16%, PSU down by 0.41%, Capital Goods down by 0.39%, Realty down by 0.32% and Consumer Durables down by 0.29% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.42%, Hindalco Industries up by 3.05%, TCS up by 3.00%,  Jindal Steel up by 1.71% and BHEL up by 1.46%, while, Coal India down by 3.13%, Bharti Airtel down by 1.95%, Maruti Suzuki down by 1.59%, L&T down by 1.57% and ICICI Bank down by 1.39% were the top losers in the index. (Provisional)

Meanwhile, as per the Confederation of Indian Industry (CII) survey, Indian industry growth in the period of  July-September, 2013 remained dismal, despite the government introducing various measures to boost the economy’ s growth. CII, survey, based on the study of 91 industrial sectors in the domestic economy, revealed that sectors reporting contraction in the July to September quarter rose sharply to 38.46% from 15.5% in the year-ago period. 

The recent CII highlighted that the number of sectors, which saw contraction in terms of revenue in the second quarter of 2013-14 rose to 35 from 16 a year ago. Sectors that saw contraction included utility vehicles, bus and truck tyres, newsprint, cellular services and natural gas. CII survey further said that the number of sectors that showed excellent growth, or growth in excess of 20%, rose marginally to 4.39% from 3.8% a year earlier. Moreover, the sectors showing high growth of 10-20% declined to 10.98% in the July-September quarter from 29.1% growth in the same period of previous fiscal. By adding further, CII said that sectors that witnessed excellent growth include hydroelectric power and television sets, while the high growth sectors included air-conditioners, two-wheelers, refrigerators, and washing machines. Sectors witnessing low growth up to 10% comprised cement, alcoholic beverages, nuclear power, railway equipment, and electric fans, among others, it added.

Indian industry body further said that industry growth is likely to remain under pressure in coming future as Indian economy is showing no signs of bottoming out in the near future. Therefore, there is a need for a concerted effort from policymakers to introduce a number of measures to boost investment in the industry. Meanwhile, Indian economic growth slowed down to four year low at 4.4 percent in Q1 FY14.

India VIX, a gauge for markets short term expectation, marginally gained 0.17% at 26.83 from its previous close of 26.13 on Friday. (Provisional)

The CNX Nifty gained 1.95 points or 0.03% to settle at 5,909.25. The index touched high and low of 5,912.00 and 5,825.85 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 Ranbaxy up 5.47%, Tata Steel up by 4.51%, BPCL up by 4.09%, TCS up by 3.06% and Hindalco up by 3.05%. The key losers were Coal India down by 3.24%, Bharti Airtel down by 1.98%, Axis Bank down by 1.97%, ICICI Bank down by 1.50% and Maruti Suzuki down by 1.43%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 1.08%, the United Kingdom’s FTSE 100 down by 0.62% and Germany’s DAX down by 1.01%.

Most of the Asian markets barring KLSE Composite concluded Monday’s trade in red as budget gridlock in Washington which shut down the US government now threatens to trigger a devastating debt default. Shanghai Stock Market was closed on account of National Day and will be open for trading on October 8. The World Bank cut its growth forecast for developing economies in East Asia and the Pacific region as a whole in 2013 to 7.1% from the previous forecast of 7.8%. The World Bank expects the Chinese economy to expand by 7.5% this year, down from its April forecast of 8.3% and below the International Monetary Fund’s most recent forecast of 7.75%. China’s 2014 growth is estimated at 7.7%, the World Bank stated, down 0.3% point from the previous prediction.

Japan’s index of leading economic indicators rose less-than-expected last month. The Cabinet Office stated that Japan’s index of leading economic indicators rose to a seasonally adjusted 106.5, from 107.7 in the preceding month whose figure was revised down from 107.8. Taiwan’s trade balance fell more-than-expected last month to a seasonally adjusted annual rate of 2.35B, from 4.59B in the preceding month. Consumer price inflation in Taiwan rose more-than-expected in the last quarter. The National Statistics Taiwan reported that Taiwanese CPI rose to a seasonally adjusted annual rate of 0.83%, from -0.79% in the preceding quarter.