Post Session: Quick Review

Unruffled with dismal set of macro-economic data, local barometer gauges continued their gaining momentum and ended in green for the fifth consecutive session on Monday. Besides, gloomy domestic developments, pessimistic global set-up also failed hinder the local markets uptrend. However, in the choppy session of trade, benchmarks slipped in red too, in a knee jerk reaction to the murky Wholesale inflation data, which came at seven month high level of 6.46% as compared to 6.10% in August and  8.07% during the corresponding month of the previous year. Nevertheless, shrugging of the negative news, recovery followed as market-participants initiated some buying at lower levels. The session turned out to be quite commendable given the efforts of the bourses after a flat to weak start. In early deals too, benchmarks shrugged off the ugly factory output data that grew by mere 0.6% in August, underscoring the underlying strength of Indian equity markets, which by the close of trade, saw Sensex and Nifty, gaining over quarter of a percent and ending near the day’s highest level, above the crucial 20,600 and 6,100 level. Broader indices outperforming larger peers, settled with gains of over half a percent.

On the global front, Asian pacific and European shares edged lower as the United States edged closer to a debt default after Democrats and Republicans failed to reach an agreement over the weekend.

Closer home, the upturn of bourses was led by the gains of Index heavyweights, like Tata Consultancy Service, Infosys, Reliance Industries and Tata Motors. Notably, TCS surged over 4%, to hit a new high ahead of July-September (Q2) quarter earnings tomorrow. Shares of India’s largest software services provider has rallied nearly 5% in past two trading sessions after its peer Infosys reported a healthy set of results for Q2FY2014 with dollar revenues coming in significantly ahead of estimates. Meanwhile, Reliance Industries too ended in green ahead of Q2 earnings, due for release later in the evening. In sector specific activities, Information Technology, Banking and Auto counters were in top gear. Meanwhile, banking stocks too were in the demand for the session after RBI’s governor, Raghuram Rajan announced big reforms in the offing for the banking sector. He said that RBI will soon come out with major reforms in the banking sector that will allow foreign banks to enter India in a big way and even take over domestic lenders. On the flip side, stocks from Fast Moving Consumer Goods, Metal and Capital Goods counters were the top laggards of the session. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1290: 1133, while 152 scrips remained unchanged. (Provisional)

The BSE Sensex gained 81.41 points or 0.40% to settle at 20610.00.The index touched a high and a low of 20645.94 and 20497.88 respectively. Among the 30-share Sensex, 12 stocks gained, while 18 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.59% and 0.47% respectively. (Provisional)

On the BSE Sectoral front, IT up by 2.25%, Teck up by 1.75%, Auto up by 0.60%, Bankex up by 0.54% and Oil & Gas up by 0.46% were the top gainers, while Metal down by 0.67%, Capital Goods down by 0.65%, FMCG down by 0.63%, Realty down by 0.35% and Health Care down by 0.34% were the only losers in the space. (Provisional)

The top gainers on the Sensex were TCS up by 4.27%, Wipro up by 2.58%, Tata Motors up by 1.62%, Infosys up by 1.52% and HDFC Bank up by 1.08%, while, Hindalco Industries down by 3.15%, Tata Steel down by 1.88%, Cipla down by 1.75%, Gail India down by 1.73% and BHEL down by 1.56% were the only losers in the index. (Provisional)Meanwhile, Wholesale Price Index (WPI) inflation numbers, considered as the next big trigger after IIP data, for determining the policy stance of the central bank on October 19 quarterly policy review, came as a rude shock, surging over 6.46% in September. The reading for July too has been revised upward to 5.58% from 5.79% earlier.

The annual rate of inflation, based on monthly WPI, stood at 6.46% (provisional) for the month of September, 2013 (over September , 2012) as compared to 6.10% (provisional) for the previous month and 8.07% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 5.64% compared to a build up rate of 4.84% in the corresponding period of the previous year. The Wholesale Price Index for ‘All Commodities’ (Base: 2004-05 = 100) for the month of September, 2013 rose by 1.2% to 179.7 (provisional) from 177.5 (provisional) for the previous month.

Manufactured Products, the major group with weight of 64.97%, rose by 0.70% to 151.0 (provisional) from 150.0 (provisional) for the previous month. Within the group, index for Food Products group rose by 1.4% to 170.0 (provisional) from 167.7 (provisional) for the previous month due to higher price of tea leaf (blended) (20%), processed prawn (14%), copra oil, cotton seed oil and tea leaf (unblended) (4% each), palm oil (3%),  groundnut oil, sunflower oil, gingelly oil and tea dust (blended)  (2% each) and rice bran oil, soyabean oil,  mixed spices, ghee, khandsari, maida, wheat flour (atta),  oil cakes,    gram powder (besan), tea dust (unblended) and gola (cattle feed) (1% each).  However, the price of bakery products and sugar (1% each) declined.

Meanwhile, Primary Articles, the major group having a weightage of 20.12% in overall index, witnessed a rise of 1.5% to 251.6 (provisional) from 247.8 (provisional) for the previous month. Within the group the index of ‘Food Article’ rose by 0.8% to 252.3 (provisional) from 250.3 (provisional), while the index for ‘Minerals’ group rose by sharp 6.4% to 352.1 (provisional) from 330.9  (provisional), due to higher price of copper ore (9%), crude petroleum (8%), dolomite (6%), iron ore (5%), steatite (2%) and       limestone and zinc concentrate (1% each).  However, the price of barytes (9%), sillimanite (7%) and chromite and manganese ore (1% each) declined. However, the index for 'Non-Food Articles' group declined by 2% to 213.7 (provisional) from 209.6 (provisional) for the previous month.

Further, Fuel & Power, having weight of 14.91% rose by 2.6% to 207.5 (provisional) from 202.3  (provisional) for the previous month due to higher price of light diesel oil (11%), furnace oil (8%), aviation turbine fuel (7%), naphtha (7%),  petrol (6%), lubricants (3%), kerosene and bitumen (3% each), high speed diesel (2%) and LPG (1%). Notably, core inflation rose to 2.1% versus 1.9% (month on month).The alarming rise in WPI numbers after a disappointing factory output data is likely to make the central bank's job lot more difficult, as this adds to their dilemma for fighting inflation, even at the cost of comprising with the pace of economy’s growth, which is already running at decade low. Thus, the elevated price levels will add more pressure on the Reserve Bank of India, leading to further rate hikes.

India VIX, a gauge for markets short term expectation of volatility lost 3.13% at 22.85 from its previous close of 23.59 on Friday. (Provisional)

The CNX Nifty gained 16.50 points or 0.27 % to settle at 6,112.70. The index touched high and low of 6,124.10 and 6,082.90 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 TCS up 4.55%, Ambuja Cements up by 2.77%, Wipro up by 2.41%, ACC up by 2.27% and Bank of Baroda up by 1.63%. The key losers were Hindalco down by 3.24%, Asian Paint down by 3.02%, Gail down by 2.14%, CIPLA down by 2.06% and Tata Steel down by 1.96%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.05% and Germany’s DAX down by 0.21%, while the United Kingdom’s FTSE 100 up by 0.05%

Most of the Asian markets barring Shanghai Composite concluded Monday’s trade in red weighed by an unexpected drop in exports from China and the threat of default by the world’s largest economy later this week. Hong Kong, Indonesian and Japanese markets remained closed for the trade today on account of public holidays. China’s exports fell 0.3% in September from a year earlier, ending two consecutive months of rises. Imports, however, increased 7.4% last month from a year ago, accelerating from August’s 7% rise. This left the country with a trade surplus of $15.2 billion in September, compared with $28.52 billion in August and 44.7% less than the same month last year.

Chinese consumer prices rose faster than expected in September though remaining within the government’s target range, while wholesale prices hit their 19th straight month of decline. China’s consumer price index rose 3.1% in September compared to the year-earlier period, accelerating from a 2.6% gain in August. Producer price inflation in China rose more-than-expected last month to an annual rate of -1.3%, from -1.6% in the preceding month.

Singapore’s gross domestic product rose unexpectedly in the last quarter to a seasonally adjusted 5.1%, from 3.8% in the preceding quarter. Retail sales in Singapore rose less-than-expected last month. The Statistics Singapore stated that Singaporean Retail Sales rose to a seasonally adjusted -7.8%, from -8.2% in the preceding month whose figure was revised down from -7.8%.

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