Post Session: Quick Review

Indian equity markets witnessed a complete trend reversal in Thursday’s trade. Benchmarks that made a cautious but positive start surprisingly started moving up and by the late noon trade surged to their over three years high, supported by broad based buying after a sharp fall in last session. However, the second half of the trade was equally disappointing with major indices losing all their gains slipped into red territory and found it hard to recover from there till last.

On the global front, the cues remained mixed as after a negative close of the US and subsequent fall in early deals, the Asian markets mostly ended in green. Though, the Chinese markets closed lower despite a flash report showing that manufacturing output strengthened more than anticipated this month. The Purchasing Managers’ Index released by HSBC Holdings Plc and Markit went up to 50.9 reading compared with a median estimate of 50.4. Later, the European markets too made a good start but failed to re-energize the markets.

Back home it was a disappointing day of trade when profit booking took the centre stage, dragging the markets into red. Traders considering the high level an opportunity opted to book profit. The early gains in the markets was mainly propelled by the banking stocks that continued their surge after Finance Ministry finalized the bank-wise capital infusion plan aggregating Rs 14,000 crore by March next year and at one point of time bank Nifty crossed its record high of over 11000 mark. Strength in rupee that supported the equity markets, too saw paring most of early gains. Telecom stocks that gained in early trade on the back of TRAI sticking to its recommendations for steep cuts in the floor price of spectrum for upcoming auctions as well as on spectrum refarming, came off their days high and most of them barring Bharti, ended in red. Result reactions  too kept the markets buzzing, Wipro continued its slide for the second day in a row after weak revenue guidance, while the whole cement sector was under pressure after Ambuja Cements reported 45.40% fall in its net profit at Rs 165.97 crore for the September quarter. Aviation pack  too showed subdued trend, down by 2-3% after second-biggest carrier by domestic market share, Jet Airways reported its worst quarterly loss at Rs 891.01 crore for the quarter as compared to a net loss of Rs 99.67 crore for the same quarter in the previous year. Also FIPB approved the Singapore Airlines’ proposal to start an aviation venture with Tata Sons entailing an initial foreign investment of $ 49 million. Morever, the broader indices too lost their momentum and made a mixed closing.

The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1194:1291, while 188 scrips remained unchanged. (Provisional)The BSE Sensex lost 60.51 points or 0.29% to settle at 20707.37.The index touched a high and a low of 21039.42 and 20656.70 respectively. Among the 30-share Sensex, 9 stocks gained, while 21 stocks declined. (Provisional)

The BSE Mid cap index ended higher by 0.11%, while Small cap index ended lower by 0.03%. (Provisional)

On the BSE Sectoral front, Capital Goods up by 1.08%, Auto up by 0.51%, Consumer Durables up by 0.29%, Bankex up by 0.23% and FMCG up by 0.17%, were the top gainers, while IT down by 1.81%, Teck down by 1.58%, Realty down by 1.35%, Power down by 1.23% and PSU down by 0.86% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.40%, L&T up by 1.71%, Gail India up by 1.59%, HDFC Bank up by 1.36% and Tata Motors up by 1.24%, while, Wipro down by 4.36%, Coal India down by 3.62%, TCS down by 2.45%, BHEL down by 2.24% and Jindal Steel down by 1.85% were the top losers in the index. (Provisional)

Meanwhile, in a major development, Petroleum Ministry has allowed private upstream companies like Reliance Industries and Cairn India to start producing oil and gas from discoveries even before securing approval for field investment plans. To enable monetization of the finds contained with an already producing area, Oil Minister M Veerappa Moily approved 5-page guidelines for production and development of oil and gas discoveries.

As per the guidelines approved, each company will be allowed the option to submit an integrated development plan (IDP) encompassing multiple new discoveries. Presently, every discovery is treated as a separate factory and operators are required to first get approval for commercial viability and then seek approval for an investment plan, called a field development plan (FDP).

However, now the Ministry has permitted submission of declaration of commerciality (DOC) and FDP/IDP together by subsuming DOC within the FDP/IDP. Further while, the cases with single discovery will be termed as FDP and cases of multiple discoveries will be termed as IDP.

Thus, with these new guidelines, the contractor, for early monetisation of new discoveries in a mining lease (or producing) areas, may be allowed by the Management Committee (MC) to produce hydrocarbons from the notified new discoveries, pending approval of FDP/IDP. However, this will be subjected to condition that the contract has taken approval of the MC for the annual work programme, budget and program quantity for such new discoveries. Additionally, recovery of all costs associated with new recoveries pending approval of FDP/IDP, despite their inclusion in the annual work program and budget, will not be permitted.

India VIX, a gauge for markets short term expectation of volatility gained 1.42% at 20.64 from its previous close of 20.35 on Wednesday. (Provisional)

The CNX Nifty lost 14.95 points or 0.24% to settle at 6,163.40. The index touched high and low of 6,252.45 and 6,142.95 respectively. Out of the 50 stocks on the Nifty, 20 ended in the green, while 30 ended in the red.

The major gainers of the Nifty were Ranbaxy up 2.71%, IDFC up by 2.68%, NMDC up by 2.60%, M&M up by 2.56% and Gail up by 1.56%. The key losers were HCL Tech down by 4.63%, Wipro down by 4.59%, Coal India down by 3.81%, TCS down by 2.58% and BHEL down by 2.28%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.23%, the United Kingdom’s FTSE 100 up by 0.38% and Germany’s DAX up by 0.55%.

The Asian markets barring Shanghai Composite and Hang Seng concluded Thursday’s trade in green after upbeat data from China showed manufacturing activity expanded to a seven-month high in October. The upbeat reading, however, did little to offset fears over the Chinese economy, as China’s interbank lending rate moved higher for a second day, reviving fears of a liquidity crunch in June. In addition, data showing a further rise in house prices earlier in the week increased concerns that Beijing could step in to cool down the market. China’s manufacturing is extending its rebound into October, according to a preliminary reading of the sector released. The flash reading of October’s China manufacturing Purchasing Managers’ Index (PMI) rose to a seven-month high of 50.9, up from September’s final reading of 50.2, though it remained just below the Chinese government’s own PMI, which hit 51.1 last month.

China’s gross domestic product (GDP) growth forecast has been raised to 7.6 percent from 7.5 percent for 2013. The report, released, also forecast GDP growth for the fourth quarter of 2013 to reach 7.5 percent year on year. Hong Kong’s trade balance fell more-than-expected last month. The Hong Kong Census and Statistics Department stated that Hong Kong Trade Balance fell to a seasonally adjusted -42.0B, from -39.6B in the preceding month.