Post Session: Quick Review

The start of the F&O expiry week turned out to be a dismal one, where bears went berserk over the bourses to end the session with a cut of over half a percent. In the lackluster and result-heavy session of trade, benchmarks after getting a quiet start went on losing ground and halted only near day’s lowest point. Although, bit of recovery was witnessed in morning deals, but selling pressure during the last leg of trade dragged the markets lower. Cautiousness ahead of RBI’s quarterly monetary policy review tomorrow, amidst the expectation that India’s apex bank would hike key interest rates by 25 basis points, while further slashing MSF rate by the same quantum, kept traders jittery of investing into risky equities. Meanwhile, lack of positive triggers in home markets coupled with mostly disappointing corporate earnings also encouraged investors of squaring off their long held position ahead of crucial RBI’s policy meet and volatile F&O expiry despite positive global set-up. Thus, by the close, while Sensex ended below 20,600 level, Nifty, managed to close a bit above 6100 level. Meanwhile, broader indices too were beaten down in trade and ended with same quantum of loss as larger peers.

On the global front, Asian markets clocked a positive session of trade on Monday following a record close on Wall Street, and as investors picked up bargains after broad losses last week. Additionally, European shares advanced on Monday, with a new record high for a key US index on strong earnings and expectations of the US Federal Reserve continuing its stimulus for longer, boosting investor sentiment.

Closer home, the losses of the bourses were led by the stocks belonging to Fast Moving Consumer Goods, Realty and Metal counters, which emerged as top laggard of the bourses. On the flip side, Consumer Durable, Capital Goods and Oil & Gas counters were the major pockets of the strength, which limited the further slide of the markets. Decline of index heavyweights, ITC and Hindustan Unilever (HUL), played spoilsport for the entire pivotal. While, six straight quarter slowdown of sales growth by HUL, on account of weak consumer demand dragged company’s shares lower by a percent, ITC too plunged close to four percent on revenue growth concern. ITC, although reported higher-than-expected 21.5% growth in its net profit of Rs 2,230 crore in three months period ended September 2013, its net sales increased way below the street’s expectation at 8.9% to Rs 7,780 crore during September quarter from Rs 7,146 crore in a year ago period. Meanwhile, in other quarterly earnings, ICICI bank slipped despite reporting 20% growth in Q2 net profit and asset quality improvement. Additionally, TVS Motors too slowed down by over 2.5% despite reporting 97% rise in Q2 net profit. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1006: 1403, while 164 scrips remained unchanged. (Provisional)

The BSE Sensex lost 104.17 points or 0.50% to settle at 20579.35.The index touched a high and a low of 20771.36 and 20550.64 respectively. Among the 30-share Sensex, 9 stocks gained, while 21 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.76% and 0.43% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 1.49%, Capital Goods up by 0.90%, Oil & Gas up by 0.39% and Auto up by 0.02%, were the only gainers, while FMCG down by 2.67%, Realty down by 2.24%, Metal down by 1.80%, Power down by 1.16% and Bankex down by 1.14% were the top losers in the space. (Provisional)

The top gainers on the Sensex were L&T up by 1.91%, HDFC up by 1.50%, ONGC up by 1.46%, Tata Motors up by 0.55% and Wipro up by 0.47%, while, ITC down by 3.87%, SSLT down by 3.56%, Tata Steel down by 3.11%, SBI down by 2.54% and Hero MotoCorp down by 2.04% were the top losers in the index. (Provisional)

Meanwhile, in order to meet India’s growing coal demand, the government will soon invite bids from private players to kickstart coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. The decision to invite bids was taken by a nine-member high-level committee, headed by coal secretary and having senior officials from the finance ministry, Planning Commission as well as the law ministry. According to the proposal, the coal mines will remain in the ownership of the public sector while the private partner will receive a mining charge on the coal mines. Further, sale of such coal will be undertaken by the public entity, which grants the PPP concession.

The move will also be helpful to check the widening current account deficit (CAD) of the country by reducing the coal imports. In spite of world's fifth largest in terms of reserves and third-largest producer of coal, India's domestic output has failed to keep pace with demand over the past few years. At present, Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. In the previous fiscal, India imported $16 billion worth of coal. 

India is the world's third-largest producer of coal and the fifth largest in terms of reserves. Presently, Coal India is the only producer of domestic coal, which is struggling to meet domestic requirement. Thus, the government is of the view that involvement of private players will produce faster and cheaper coal for the country. Acute coal shortages in the country has become primary reason for power deficit in the country as coal-fired plants account for 57% of India's installed electricity capacity. 

India VIX, a gauge for markets short term expectation of volatility gained 4.26 % at 21.29 from its previous close of 20.42 on Friday. (Provisional)

The CNX Nifty lost 42.00 points or 0.68% to settle at 6,102.90. The index touched high and low of 6,168.75 and 6,094.10 respectively. Out of the 50 stocks on the Nifty, 13 ended in the green, while 37 ended in the red.

The major gainers of the Nifty were L&T up 1.89%, ONGC up by 1.51%, HDFC up by 1.49%, Wipro up by 0.56% and Kotak Bank up by 0.51%. The key losers were JP Associate down by 5.36%, Bank of Baroda down by 4.42%, ITC down by 3.93%, PNB down by 3.74% and Sesa Sterlite down by 3.63%. (Provisional)

The European markets were trading on a mixed note; Germany’s DAX gained 0.13% and UK’s FTSE 100 was up 0.07%, while France’s CAC 40 was down 0.35%.

All the Asian markets concluded Monday’s trade in green as investors spurred bets that Federal Reserve will maintain stimulus. A pickup in interbank lending rates in China also spooked investors and regional markets started the week in recovery mode, following a series of declines last week that hit Japan and China especially hard. Indonesia’s finance minister stated that inflation rate in October is estimated to be up less than 0.4 percent from the previous month. The statistics bureau is scheduled to release October inflation data on November 1. Shanghai’s gross domestic product expanded 7.8 percent from a year earlier in the third quarter, up from the 7.6 percent increase in the second quarter and securing a stable economic performance. The Shanghai Statistics Bureau stated that in the first three quarters, Shanghai’s economy rose 7.7 percent with the output reaching 1.55 trillion yuan ($252 billion).

Thai factory output fell 2.9 per cent in September from a year earlier, more than expected and adding to concerns about the country’s ability to get out of recession. September was the sixth straight month in which output has fallen. The output data comes in the wake of surprisingly poor September exports, which fell 7.1 per cent from a year earlier, and the central bank cutting its forecast for growth this year to 3.7 per cent from 4.2 per cent.