Post Session: Quick Review

It turned out to be ecstatic session of trade on Wednesday at Dalal Street, where benchmark equity indices changing gears in the second half of the session, went on adding ground, halting only at day’s highest points, with gains of over a percent. 30 months low trade deficit data mainly provided a shot of adrenaline to bourses, which were trading downbeat after gap-down start, up till the afternoon deals. Feeble global cues and a cut in India’s growth estimate to 3.75% for FY2013 by IMF had pressurized the sentiment in early deals. Additionally, prevailing caution ahead of Q2 earning season also kept investors on the side-lines. However, the scenario changed after the release of narrower than expected trade deficit data, which dipped to lowest since March 2011 at $6.76 billion in September, against $10.9 billion in August, after exports posted double digit growth for third consecutive month, and imports slid for the fourth month in a row. By the close of trade, both Sensex and Nifty, adding over percentage, re-conquered the crucial 20,200 and 6,000 levels respectively. Broader indices too witnessed some buying and ended with gains of over half a percent.

On the global front, Asian shares pared early losses to end mostly positive on Wednesday after news that President Barack Obama will nominate Janet Yellen as Federal Reserve chairwoman gradually trumped concerns over a partial government shutdown in the US. Asia initially took its lead from the US. Meanwhile, European shares too recovered from one month low on similar news, mainly as Yellen is expected to continue with the policies the Fed has established under Bernanke.

Closer home, overall neutral tone of RBI’s governor about the future scope of monetary policy and appreciation of Rupee back to 61 level on narrower than expected trade deficit data in September also added to the positive tone for Indian equities markets. On the BSE sectoral front, amidst across the board buying activities, only stocks from Consumer Durables pivotal begged to differ, while, those from Realty, Health Care and Banking counters emerged as the major pillars of strength.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1411: 1033, while 164 scrips remained unchanged. (Provisional)The BSE Sensex gained 275.53 points or 1.38% to settle at 20259.14.The index touched a high and a low of 20277.74 and 19826.96 respectively. Among the 30-share Sensex, 24 stocks gained, while 6 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.97% and 0.57% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 4.19%, Health Care up by 2.15%, Bankex up by 2.00%, Capital Goods up by 1.84% and Power up by 1.61% were the top gainers, while Consumer Durables down by 0.53%was the only loser in the space. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 5.70%, Bajaj Auto up by 2.79%, HDFC Bank up by 2.68%, Tata Steel up by 2.43% and Jindal Steel up by 2.43%, while, Wipro down by 1.58%, SSLT down by 1.10%, Mahindra & Mahindra down by 1.10%, Maruti Suzuki down by 0.60% and Cipla down by 0.49% were the only losers in the index. (Provisional)

Meanwhile, offering further solace to Indian currency, trade deficit narrowed to a two-and-a-half-year low at $6.76 billion in September, compared with $10.9 billion in August, after India’s exports posted double digit growth for third consecutive month, and with imports sliding for the fourth month in a row.

India’s exports during September, 2013 grew by 11.15% at $27.68 billion as compared to $24.90 billion during September 2012 thanks to stronger demand from Western nations and increased competitiveness thanks to the weaker rupee. While exports slid by 18.1% year-on-year to $34.44 billion against the level of $42.05 billion in September, 2012. The steep decline of imports for fourth consecutive month was witnessed on account of sharp slide of gold imports to $0.8 billion in September as compared to $4.6 billion in September 2012, as both government and the Reserve Bank of India’s clamped down on gold imports after the rupee had slipped to record low levels.

India, the world’s biggest buyer of gold, has raised the import duty on gold three times this year, taking it to 10%, and in July the government told importers that a fifth of their purchases would have to be turned around for export, leaving only 80 percent for domestic use.

Further, trade deficit for April-September, 2013-14 stood at $80.12 billion was lower by 12.74% than the deficit of $91.82 billion during the corresponding period of the previous year, with exports growing by mere 5.14% at $152.10 billion and imports sliding by 1.80% at $232.23 billion during April-September 2013 as compared to corresponding period of the previous year.

India VIX, a gauge for markets short term expectation of volatility lost 2.56% at 26.55 from its previous close of 25.87 on Thursday. (Provisional)

The CNX Nifty gained 85.55 points or 1.44% to settle at 6,013.95. The index touched high and low of 6,015.50 and 5,877.10 respectively. Out of the 50 stocks on the Nifty, 40 ended in the green, while 10 ended in the red.

The major gainers of the Nifty were DLF up 5.98%, Sun Pharmaceuticals up by 5.73%, JP Associate up by 4.35%, Kotak Bank up by 4.02% and IDFC up by 3.52%. The key losers were Wipro down by 1.54%, M&M down by 1.41%, SSLT down by 1.02%, Cairn down by 0.68% and BPCL down by 0.60%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.48% and Germany’s DAX up by 0.22%, while the United Kingdom’s FTSE 100 down by 0.03%.

Most of the Asian markets concluded Wednesday’s trade in green despite stalemate in Washington which increased fears that the world’s largest economy might breach the federal debt ceiling, causing the Treasury to default on debt. South Korea Stock Exchange was closed today on account of ‘Hangul Day’. Indonesia’s rupiah forwards fell the most in more than a week on concern that slowing global economic growth will hurt the nation’s exports, which dropped for a 17th month in August. The International Monetary Fund cut its expansion outlook for the global economy this year to 2.9 percent from an earlier projection of 3.1 percent.

The IMF cuts its growth forecast for China, Indonesia’s biggest overseas market, to 7.3 percent next year from an April projection of 8.2 percent. The IMF reduced its prediction for 2014 growth in Japan, Indonesia’s No. 2 export destination, to 1.2 percent from 1.4 percent. The Washington-based lender cut its expansion forecast this year for Indonesia to 5.3 percent from 6.3 percent and for 2014 to 5.5 percent from 6.4 percent. The HSBC China Services Business Activity Index, a gauge of operating conditions in service firms geared toward private enterprises, was 52.4 last month, down from 52.8 in August. Activity in private service companies grew at a slower pace in September, indicating weakness in China’s economy although it has been recovering strongly in the past few months.