Post Session: Quick Review

Indian markets failed to replicate the vigor they showed last week and made a lackluster start of the new week with major indices swinging in and out of the red line throughout the day, unable to get any direction lacking any supportive cues. Though, the start was good and the benchmarks added gains to their over three years high reached in last session, taking cues from the good going in the global markets. However, profit booking soon emerged taking the markets lower from the high points of the day, traders were slightly perturbed by the weakening in dollar, which turned lower despite RBI’s statement that it has no immediate plan to close the dollar-swap window for oil companies and it will be done in a calibrated manner. 

On the global front, the Asian markets taking cues from the surge in the US markets and on hopes that the Fed will delay the tapering of its bond buying programme due to the partial shutdown of the US government, moved higher for the day with Chinese market taking the lead gaining over one and half a percent. However, the soft start of the European markets weighed on the local bourses sentiments.

Back home, the local markets came off their highs in the very first hour of trade and Sensex reversed the gears from almost the 21000 levels and kept on struggling throughout the session to get some traction but there was hardly any incident of firm recovery attempt to reach that level again. The only silver lining of the trade was the secular trend in the broader markets, which despite the volatility in the benchmarks kept their spirit high for the entire session, adding another one percent. There was some buying in the last leg of trade that barely managed to take the markets in green and benchmark managed to extend their gaining streak. Sectorally the start of the day was capital goods, which moved up by over four percent mainly on the back of the better than expected numbers from the industry heavyweight Larson and Toubro. Rate sensitive realty too found good favour from the investors and gained over three percent. In the non sectoral gauges on the BSE, sugar remained buzzing since morning with report that India’s sugar output dropped by 4.5% to 25.14 million tonnes in 2012-13 marketing year ended last month, due to lower crushing and recovery levels in key producing states. All the major sugar companies added decent gains, Balrampur Chini was up by over 2%, Shree Renuka Sugars gained over 3%, Bajaj Hindhusthan around 5% and Mawana Sugars was up by about 2%. However, there was another gauge of Aviation that despite a good news ended mostly in red. It was reported that the domestic traffic grew for the second consecutive month in September despite steep fare increases by most airlines. Finally Sensex ended just below the 20900 mark while Nifty crossed the 6200 level.

The market breadth on the BSE ended strongly in green; advances and declining stocks were in a ratio of 1448:988, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex gained 11.00 points or 0.05% to settle at 20893.89.The index touched a high and a low of 20970.92 and 20768.99 respectively. Among the 30-share Sensex, 20 stocks gained, while 10 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.86% and 1.27% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 4.19%, Realty up by 2.96%, Metal up by 1.74%, Power up by 1.09% and PSU up by 0.91% were the top gainers, while FMCG down by 1.22%, IT down by 0.53% and Teck down by 0.33% were the only losers in the space. (Provisional)

The top gainers on the Sensex were L&T up by 6.05%, Maruti Suzuki up by 3.20%, Hindalco Industries up by 3.10%, Tata Steel up by 2.34% and SSLT up by 1.97%, while, Jindal Steel down by 3.66%, ITC down by 2.63%, TCS down by 2.21%, BHEL down by 1.52% and Bharti Airtel down by 1.14% were the losers on the index. (Provisional)

Meanwhile, Government’s worries are likely to increase further with tax collection growing at a sluggish pace, it has been reported that the Indirect tax collections in the first half (April-September period) of this fiscal grew by mere 5.1 percent to around Rs 2,29 lakh crore, not even halfway mark of the budgeted Rs 5.65 lakh crore for the whole year. In September, total indirect tax collection stood at Rs 42,700 crore, up 13 percent from the same month last year. Government had increased its indirect tax collection target to Rs 5.65 lakh crore for 2013-14, up by 19 percent from Rs 4.73 lakh crore in the last fiscal.

The drop in collection was mainly due to the decline of Excise collection by 6 percent during the period to over Rs 89,000 crore, against the same period in the last fiscal year. However, Customs mop up was up 10 percent to Rs 80,550 crore during the period, while the Service tax collection grew by 16 percent to Rs 59,000 crore during the period.

Growth in industrial production has slowed and the drop in Excise collection reflects the slump in manufacturing activity, as slowing economic growth is likely to impact collection of indirect taxes and raise outgo on subsidies. The Finance Ministry, however, is expecting collections to pick up in the coming months led by a growth in industrial output in July and August and the pick up in industrial output is expected to reflect in taxes from October.

India VIX, a gauge for markets short term expectation of marginally gained 0.29% at 20.18 from its previous close of 20.12 on Friday. (Provisional)

The CNX Nifty gained 20.45 points or 0.33% to settle at 6,209.80. The index touched high and low of 6,218.95 and 6,163.30 respectively. Out of the 50 stocks on the Nifty, 36 ended in the green, while 14 ended in the red.

The major gainers of the Nifty were Asian Paints up 8.81%, Larsen & Toubro up by 6.20%, DLF up by 5.94%, IDFC up by 4.82% and Maruti Suzuki up by 3.55%. The key losers were Jindal Steel down by 3.54%, ITC down by 2.67%, TCS down by 2.07%, HCL Tech down by 1.68% and BHEL down by 1.52%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.28% and Germany’s DAX down by 0.12%, while the United Kingdom’s FTSE 100 up by 0.15%.

Most of the Asian markets barring Taiwan Weighted concluded Monday’s trade in green as sentiment was buoyed by hope of fresh measures from the Chinese government. The State Council notified that it will continue to deepen economic reform and transform the economy, pushing up technology stocks expected to benefit from new policies. South Korea and Malaysia signed a currency swap agreement worth $4.7 billion, in a move to encourage bilateral trade and help curb currency swings. In Hong Kong, rising prices of vegetables accelerated consumer prices by 4.6 percent in September over the same month a year earlier, compared with 4.5 percent in August. In the first nine months, the Composite CPI increased by 4.3 percent on year.  

Japan logged a record run of monthly trade deficits after the country’s energy bill soared in September, but exports to China were buoyant after a territorial dispute a year earlier hammered demand for Japanese goods. Japan’s trade deficit expanded 64.1 percent on-year to $9.5 billion in September as a weak yen pushed up import costs. The merchandise trade shortfall came to 932.1 billion yen ($9.5 billion) against a deficit the previous year of 568.2 billion yen. That was the 15th straight month of deficit, the longest spell since comparable data started in 1979. The Japanese Ministry of Economy, Trade and Industry stated that Japan’s All Industries Activity Index rose to a seasonally adjusted 0.3%, from 0.4% in the preceding month whose figure was revised down from 0.5%.