Post Session: Quick Review

Indian equity markets went through correction in the choppy session of trade on Thursday, wherein benchmark equity indices slipping couple of times in red and recovering subsequently, finally shut shop in red with a cut of over half a percent. The selling pressure which was witnessed with the negative start of European markets mainly washed all the early gains of the bourses. Additionally, jitters were witnessed across Dalal Street after World Bank lowered India’s forecast to 4.7% from 6.1% for the current fiscal year, citing a sharp slowdown in manufacturing and investment as well as negative business confidence. By the close of the trade, both Sensex and Nifty, tanked close to 3 /4 of a percent, to conclude near the crucial 20,400 and 6,000 psychological levels respectively. Meanwhile, broader indices outperforming the larger peers, settled with slender gains.

On the global front, Asian stocks rose as investors heaved a sigh of relief after the US lawmakers yesterday voted to reopen the US government and raise the nation’s debt ceiling. US legislators produced a last-minute deal to lift the US government's borrowing limit and dodge a potentially catastrophic debt default. On the other hand, unease on account of an 11th hour deal to break a US fiscal impasse pushing back the prospect of another bruising fight in Washington, dragged European markets lower.

Closer home, bourses’ losses were led by the stocks of Information Technology counters, which were bulldozened cruelly, ended with cut of over 3%. Stocks from Capital Goods, Auto and Realty counters too followed the suit. On the flip side, Consumer Durables, Oil & Gas and Fast Moving Consumer Goods counters acted against the wind. Profit-booking at higher levels post better than expected results from TCS and HCL Technologies, pounded the IT sector brutally. Additionally, banking stocks too got hammered out of shape after reports suggested of FII reducing their exposure in banking stocks during September quarter on concerns of margin stress due to slowdown in the economy, rising non-performing assets and higher cost of funds. However, Axis Bank and HDFC Bank, were exceptions as these stocks ended well in green on reporting better than expected results. Axis Bank’s shares rallied over a percent after the bank reported a 21.2% increase in net profit to Rs. 1,362.31 crore for the second quarter ended September 30, 2013, while HDFC Bank too gained over quarter of a percentage even after reporting slowest quarterly growth in nearly a decade. The bank has posted a rise of 27.07% in its net profit at Rs 1982.32 crore for the quarter ended September 30, 2013 as compared to Rs 1559.98 crore for the same quarter in the previous year. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1224: 1243, while 141 scrips remained unchanged. (Provisional)

The BSE Sensex lost 136.81 points or 0.67% to settle at 20410.81.The index touched a high and a low of 20629.80 and 20375.42 respectively. Among the 30-share Sensex, 11 stocks gained, while 19 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.05% and 0.10% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 1.93%, Oil & Gas up by 1.29% and FMCG up by 1.17%, were the only gainers, while IT down by 3.62%, Teck down by 2.64%, Capital Goods down by 2.39%, Auto down by 1.35% and Realty down by 1.09% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.82%, ONGC up by 2.22%, ITC up by 1.94%, RIL up by 1.42% and Hero MotoCorp up by 1.23%, while, TCS down by 5.37%, Tata Motors down by 3.97%, L&T down by 3.95%, Wipro down by 3.25% and Infosys down by 1.88% were the top losers in the index. (Provisional)

Meanwhile, giving respite to government's concern over the widening current account deficit (CAD) of the country, Planning Commission has estimated that India’s CAD will be around 2.5 percent of GDP in current fiscal, which is sharply lower than Finance Ministry's target of $70 billion or 3.7 percent of GDP. Planning Commission projection is based on a sharp decline in gold imports and better-than-expected growth in exports. Indian exports increased by 11.15%, a double-digit growth for the third consecutive month to $27.68 billion for the month of September. Imports of gold and silver plunged more than 80% to $0.8 billion in September from $4.6 billion a year earlier.

With the significant double-digit growth in country’s exports and a sharp contraction in imports, India’s trade deficit in September fell to its narrowest level in two-and-half years to $6.76 billion as against $17.15 billion in the same month of previous year and $10.9 billion recorded in August, 2013. Indian gold import bill for 2013-14 is expected to be $35-38 billion against $56 billion in 2012-13. Further, Planning Commission said, in case of increase in gold imports due to festival demand, it could easily be financed and thus the overall deficit would be not be impacted. On the other hand, the government is confident about improving country’s merchandise exports to $325 billion against $309 billion estimated earlier. 

CAD, the difference between inflow and outflow of foreign exchange widened to a record high of 4.9 per cent of GDP in the April-June quarter, 2013. High CAD also remained the main reason for rupee depreciation, which depreciated by over 15 percent against dollar in 2013.

India VIX, a gauge for markets short term expectation of lost 2.18% at 21.06 from its previous close of 23.24 on Tuesday. (Provisional)

The CNX Nifty lost 49.85 points or 0.82% to settle at 6,039.20. The index touched high and low of 6,110.75 and 6,032.55 respectively. Out of the 50 stocks on the Nifty, 18 ended in the green, while 32 ended in the red.

The major gainers of the Nifty were JP Associate up 6.11%, Bharti Airtel up by 2.92%, ONGC up by 2.27%, ITC up by 1.76% and BPCL up by 1.49%. The key losers were HCL Tech down by 7.09%, TCS down by 5.25%, IndusInd Bank down by 4.66%, L&T down by 4.11% and Tata Motors down by 3.82%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.50%, the United Kingdom’s FTSE 100 down by 0.63% and Germany’s DAX down by 0.23%.

Most of the Asian markets barring Shanghai Composite and Hang Seng concluded Thursday’s trade in green after Washington lawmakers voted to reopen the US government and raise the debt ceiling. Foreign investment in China gained 6.2 percent to $88.6 billion in the first nine months of 2013. The country attracted $8.8 billion of foreign direct investment in September-- up 4.9% on the year. The government however warned that the world’s number two economy still faced domestic and external headwinds. The commerce ministry stated that China’s trade will face challenges in coming months due to slowing demand from emerging markets.

The Bank of Japan is preparing a plan to extend three special loan facilities that have backed more than $81 billion in lending over the past three years, a step intended to nudge Japan’s risk-averse banks to start creating credit. The unemployment rate in Hong Kong remained unchanged last month. The Census and Statistics department stated that Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3%, from 3.3% in the preceding month. The government expects the unemployment rate to remain at low levels in the near term, given the generally positive hiring attitude in the corporate sector.