Post Session: Quick Review

It turned out to be an exuberant session of trade, wherein BSE’s Sensex, rose to its highest level since November 2010, while NSE’s Nifty marked its highest level in nearly five months and settled just shy of 6,200 levels, with gains of over one and half a percent. Markets after getting flat start clinched substantial ground to settle near day’s highest point. Positive global cues on hopes that the potential damage to the US economy from the long government shutdown would discourage the Federal Reserve from scaling back its stimulus programme at least until the beginning of next year, bolstered risk appetite for emerging market’s assets class such as equities. For the week Sensex and Nifty gained over one and half a percent. Meanwhile, on the broader indices front, CNX Midcap index gained 0.10%, BSE Smallcap index added close to 0.30% for the week.

On the global front, optimism witnessed on account of China’s quickening growth, just a day after US. Legislators’ finally broke a confidence-sapping fiscal impasse, also spilled across European markets which were trading with modest gains. China's economy grew 7.8% in the third quarter, its fastest pace this year and in line with expectations, as firmer foreign and domestic demand lifted factory production and retail sales.

Closer home, the secular move of the bourses at Dalal Street, were led by stocks from Banking, Metal and Capital Goods counters. Banking stocks rallied on anticipation that Reserve Bank of India would increase the cap of the amount that banks’ could borrow through repo window in its upcoming monetary policy review on October 29. Meanwhile, metal stocks shine in trade after China’s economy, the world's largest consumer of copper and aluminum, registered better than expected GDP growth. Further, PSU OMC’s stocks were in demand after Rupee’s appreciated to two week high level in early deals on account of broad dollar losses against the basket of major currencies, while Aviation stocks hogged limelight on account of weak crude and strong rupee. In across the board rally, none of the sectoral indices ended in red. However, Indian currency witnessed an intra-day reversal of trend after reports suggested Reserve Bank of India (RBI) considering closing the dollar swap window offered to oil companies. Nevertheless, the market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1402: 1082, while 167 scrips remained unchanged. (Provisional)

The BSE Sensex gained 447.61 points or 2.19% to settle at 20863.12.The index touched a high and a low of 20932.23 and 20486.78 respectively. Among the 30-share Sensex, 27 stocks gained, while 3 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.02% and 0.71% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 3.88%, Metal up by 3.24%, Realty up by 2.94%, Capital Goods up by 2.92% and FMCG up by 1.93% were the top gainers, while there were no losers. (Provisional)

The top gainers on the Sensex were Tata Steel up by 6.21%, SSLT up by 5.89%, ICICI Bank up by 4.68%, L&T up by 4.06% and Hindalco Industries up by 3.19%, while, Bajaj Auto  down by 0.59%, Hindustan Unilever down by 0.12% and Cipla down by 0.06% were the only losers in the index. (Provisional)

Meanwhile, Moody's Analytics, an arm of the global credit ratings agency Moody's, has said that Indian economy has bottomed out and recovery is on the way on the back of improved investments, as the government has been actively trying to restart stalled investment projects, both in the public and private sectors. However, the recovery will be modest, as weak business sentiment will take time to turn around and fixed investment is expected to grow by 3.5 per cent in 2014 after being flat in 2013.

By adding further, Moody’s said that Indian economy would not achieve 8 percent GDP growth rate again soon and is likely to grow at its potential growth rate of 6.5 per cent by the second half of 2015. Weak investment scenario amid prevailing global economic slowdown and contracted consumer demand on account of high inflation has slowed down Indian economy’s growth to around 5 percent in FY13 from average growth rate of over 8 percent recorded over the past few fiscal years. It added that prudent macroeconomic policies and continued reforms will drive steady acceleration in economic activity, although the upturn will be patchy and difficult for the coming six months.

Recently, the International Monetary Fund (IMF) has cut Indian economic forecast to 3.75 percent in 2013 from 5.7 percent projected earlier, while, the World Bank has revised economic growth forecast downwards to 4.7 percent for the current fiscal from 6.1 percent growth projected earlier. At present, Indian economy is struggling with slowdown and its growth has slowed down to four year low at 4.4 percent in April-June quarter, 2013. Further, all macro-economic indicators have deteriorated with current account deficit (CAD) widening to a record high of 4.9 per cent of GDP in the April-June quarter, 2013. Further, rupee value has also depreciated over 15 percent against dollar in 2013, which has become a cause of concern for the country, as India is structurally an import intensive country.

India VIX, a gauge for markets short term expectation of volatility lost 4.46% at 20.12 from its previous close of 21.06 on Thursday. (Provisional)

The CNX Nifty gained 135.85 points or 2.25% to settle at 6,181.70. The index touched high and low of 6,201.45 and 6,070.90 respectively. Out of the 50 stocks on the Nifty, 49 ended in the green, while 1 ended in the red.

The major gainers of the Nifty were IndusInd Bank up 6.39%, Tata Steel up by 6.09%, SSLT up by 5.97%, Axis Bank up by 5.55% and JP Associate up by 5.55%, while Bajaj Auto down by 0.02% was the only loser in the index (Provisional)

The European markets were trading in green with, France’s CAC 40 up by 0.41%, Germany’s DAX up by 0.14% and the United Kingdom’s FTSE 100 up by 0.28%.

Most of the Asian markets barring Nikkei 225 concluded Friday’s trade in green following a batch of economic data from China that were roughly in line with expectations. While Chinese data showed the economy grew at its fastest clip of the year in the third quarter, more recent statistics for September suggested a mild slowdown is now underway. China’s gross domestic product was 7.8% higher in the July-September quarter compared to a year earlier, accelerating from the second quarter’s 7.5% increase, and a 7.7% rise in the first quarter, the National Bureau of Statistics. Industrial production in China, which measures output at factories, workshops and mines, gained 10.2 percent in September year-on-year, the National Bureau of Statistics stated, while retail sales, a key indicator for consumer spending, was up 13.3 percent. China's business climate index, a major gauge of the country's macroeconomic outlook, rebounded slightly in the third quarter. The business climate index was 121.5 points for the third quarter, up 0.9 points from the previous quarter. Besides, fixed asset investment, a measure of government spending on infrastructure, was up by 20.2 percent during the first nine months of the year.

The volume of Hong Kong’s domestic exports dropped 11.3% in August, compared to the same month last year, while that of goods re-exports fell by 1.6%, the Census & Statistics Department announced. Taken together, the volume of total exports of goods decreased by 1.7%, while the volume of goods imports was almost unchanged. The prices of total exports of goods for the month increased by 1.1% year-on-year, while the prices of imports of goods went up 0.5%. Indonesian bonds rose this week, pushing the 10-year yield to the lowest level in almost three months, as speculation that Federal Reserve will delay tapering stimulus drove inflows.