Post session - Quick review

Position squaring remained the order of the day on Wednesday as the benchmark equity indices after taking a breather in the previous session resumed their southbound journey. Bulls which came out of their hibernation in the previous session, a short of technical relief, failed to show their mettle for another session in light of twin threats, a flagging US economy and Europe's inexorably worsening sovereign debt crisis.

Barometer gauges fell like a -house of cards- in trade today after a weak Chinese manufacturing survey renewed fears of a hard landing for the world's No. 2 economy and also as exacerbating worries about faltering global growth following a downward revision of US GDP data ate into risk appetite. HSBC flash manufacturing purchasing managers' index (PMI) slumped in November to 48, lowest since March 2009, besides blemishing trade at Asian pacific markets also played mood dampener at Dalal Street.

However, negative leads came from overnight trade at Wall street after a government report showed the US economy grew at a 2 percent annual rate from July through September, down from an initial estimate of 2.5 percent, prompted an early carnage at Indian equity markets, which took the benchmark equity indices to fresh 2011 low’s. Higher borrowing costs for Spain, which renewed worries about Europe's debt crisis was another reason for accentuated selling pressure as the higher rates indicated that investors were still skeptical that the country will get its budget under control despite a new government coming to power this week. Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels. Furthermore, European shares tumbled to their lowest in seven weeks in early trade on Wednesday, too added to the pessimism, thereby bludgeoning the frontline indices near a two year lows in noon trades.

Back on the home turf, domestic woes too added to the gloom as Finance ministry ruled out the possibility of forex market intervention by RBI by stating it as undue, which in turn dissuaded the market participants from placing large bets. The rupee on Tuesday slid to an all-time low of 52.73 against the US dollar as foreign investors continued to pare their exposure to Asia's third-largest economy on lingering global uncertainty and mounting worries over the domestic economy. 

However, slender 'V' shape recovery came to the markets approaching the closing bell as the bottom fishing which emerged in select blue chip stocks, impelled recuperation. Some solace also came to markets with the shares of Unitech, Reliance Communication and DB Realty which jumped in the range of 4-20 percent after Supreme Court granted bail to five company executives charged in a multi-billion dollar telecoms licensing scandal.  Stocks from Consumer Durable too toiled hard for contraction of losses. However, stocks from Capital Goods, TECk and Information technology counters that were down with colossal losses negated all the upbeat sentiment, thereby prompting a 20 month low level close for barometer indices. Sensex offloading over 300 points settled miles away from 16k mark. Similarly, 50 shares broadly followed index- Nifty-cracking over a century points concluded the trade tad above the 4700 level. The broader indices, which too imitated the style and pattern of larger counterparts, went home with gigantic loss of over percent and a half each. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 836:1969 while 110 scrips remained unchanged.

The BSE Sensex lost 349.17 points or 2.17% and settled at 15,716.25. The index touched a high and a low of 15,969.60 and 15,478.69 respectively. 2 stocks advanced against 28 declining ones on the index (Provisional)

The BSE Mid-cap index lost 1.96% while Small-cap index was down 1.65%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 0.46% was the only gainer while Capital Goods down 2.96%, TECk down 2.71%, IT down 2.62%, Oil & Gas down 2.49% and Bankex down 2.34% were the top losers.

The top gainers on the Sensex were Bajaj Auto up 0.82% and NTPC up 0.64%.

On the flip side, JP Associates down 5.21%, HDFC Bank down 4.24%, Bharti Airtel down 3.92%, Wipro down 3.53% and BHEL down 3.51% were the top losers on the index. (Provisional)
Meanwhile, the central government has allowed one million tonnes of sugar export for the 2011-12 crop marketing year which started in October and it also removed curbs on traders to hold stocks of sweetener, a decision that would help the industry to improve their cash flow and enable them to make timely payment to cane growers. This move of the central government came after a persistent demand from millers in the wake of a sharp increase in cane prices. 

An Empowered Group of Ministers on Food (EGoM), chaired by Finance Minister Pranab Mukherjee, approved exports as the  India’s sugar production is expected to cross the domestic demand by 3-4 million tonnes in the 2011-12 marketing year. The EGoM has approved one million tonnes of sugar export under the Open General License (OGL) scheme though the demand was for three million tonnes. In case of stock holding limits, it has been lifted on sugar traders from December 1 as the country stares at a bumper crop.

During last marketing year, the government has allowed 2.6 million tonnes of exports out of which 1.5 tonnes via OGL in three tranches. The production of sugar in India, which is second largest producers and largest consumers, is estimated to grow 7.4 percent to 26 mt, while consumption is seen rising at 6 per cent to 22 mt in 2011-12 marketing year. However, despite the persistence demand from the sugar millets for exports from the start of current marketing year, the food ministry was reluctant to allow, due to fear of price increase in festival season, when generally demand for sugar is higher.

The EGoM also decided to export 10,000 tonnes of rice to Kenya, Somalia and Djibouti on a government-to-government basis. Further export of 1,600 tonnes each of skimmed milk powder, 24,000 tonnes of wheat, 21,200 tonnes of rice, 1,200 tonnes of pulses and 2,400 tonnes of edible oil to Bhutan had been allowed on a government-to-government basis.India VIX, a gauge for market’s short term expectation of volatility gained 12.17% at 30.68 from its previous close of 27.35 on Tuesday. (Provisional)

The S&P CNX Nifty lost 102.20 points or 2.12% to settle at 4,710.15. The index touched high and low of 4,779.50 and 4,640.95 respectively. 4 stocks advanced against 46 declining ones on the index. (Provisional)

The top gainers on the Nifty were NTPC up 1.00%, Reliance Communications up 0.71%, Bajaj Auto up 0.43% and HUL up 0.03%.

 On the other hand, BPCL down 5.34%, JP Associates down 5.13%, HDFC Bank down 4.52%, IDFC down 4.36% and Ranbaxy down 4.21% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 0.63%, Germany's DAX down 0.05% and FTSE 100 down 0.46%.

Asian markets resumed witnessing slaughter after a day halt as provisional reading on manufacturing growth in China showed contraction and weaker-than-expected economic expansion in the US too dampened the sentiments. HSBC China manufacturing gauge has fallen to 48.0 in November from 51.0 last month. Forecasts for the HSBC flash manufacturing Purchasing Managers Index had called for a 50.1. A level above 50 implies expansion while anything below it denotes contraction while, the US economy expanded at a slower than expected pace in the third quarter, evident after the Commerce Department lowered its GDP growth estimates to 2% from earlier estimates of 2.5%.

Hong Kong and China shares declined below their crucial 18,000 and 2,400 mark, dragged down by materials and finance-related stocks as investors rotated selling and took profit in cyclical sectors with risk aversion staying high in global markets.

Japanese markets remained closed for trade on Wednesday on account of Labor Thanksgiving day.