Post Session: Quick Review

After reaching closing high in 2013 in the previous session, local equity market added yet another half a percent gains to their kitty on the penultimate session of F&O expiry. It turned out to be Pre-Diwali fireworks at Dalal Street, which resulted into Sensex ending near its record highs, i.e., above the crucial 21,000 level and Nifty just shying away from the crucial 6,250 mark. Much of the momentum was gained by the bourses during second half of the session, while some profit-booking towards the end, did little to extinguish the fire-works at Dalal Street. Meanwhile, broader indices also rode higher with enthusiasm and ended with gains in-line to their larger counterparts. Besides positive local sentiment on the back of in-line expectation RBI’s policy review, positive global-set-up also added to the investors’ glee, which despite being penultimate session of F&O, went on adding position.

On the global front, Asian stocks rose, before the conclusion of the Federal Reserve’s policy meeting, where most economist expect Fed to maintain its $85 billion in monthly bond purchases at a meeting ending today. Meanwhile, European shares edged higher on Wednesday, helped by some strong company earnings, record highs on Wall Street and expectations the US central bank will delay trimming its stimulus for several months.

Hopes of diesel price hike after reports suggested of Government panel favoring capping of subsidy at Rs 6 per litre on diesel prices, also contributed to the cheers at Dalal Street. Sectorally, Health Care, Fast Moving Consumer Goods and Technology counters were the top gainer, while Auto and Public Sector Undertaking (PSU) counters were the weak spells of the trade. Meanwhile, shares of telecom operators too rang loud after reporting in line July-Sept results. While, Tata Communications rallied 10 percent after turning in black in September-quarter, Bhart Airtel too gained after its September-quarter operating margins came at 32%, way higher than street expectation. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1271: 1161, while 177 scrips remained unchanged. (Provisional)

The BSE Sensex gained 104.96 points or 0.50% to settle at 21033.97.The index touched a high and a low of 21086.59 and 20937.12 respectively. Among the 30-share Sensex, 16 stocks gained, while 14 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.25% and 0.64% respectively. (Provisional)

On the BSE Sectoral front, Health Care up by 1.19%, FMCG up by 1.12%, Teck up by 0.66%, Power up by 0.51% and Realty up by 0.47% were the top gainers, while Auto down by 0.05% and PSU down by 0.03% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 5.23%, Dr Reddys Lab up by 4.21%, Hindalco Industries up by 2.77%, ICICI Bank up by 2.23% and Bajaj Auto up by 2.22%, while, Wipro down by 2.17%, SSLT down by 1.29%, HDFC Bank down by 0.95%, SBI down by 0.94% and L&T down by 0.82% were the only losers in the index. (Provisional)

Meanwhile, amid rising concerns over the deteriorating economic fundamentals of the country, the Reserve Bank of India (RBI) has cut Indian economic forecast to 5 percent for current fiscal from 5.5 percent projected earlier. The RBI in its second quarter review of monetary policy has said that domestic constraints coupled with weak external environment continue to put headwinds on the economic growth recovery.

The central bank has mentioned rising inflation a concern for India as it has been eroding consumers and business confidence in the country. The immediate focus of the central bank is to tame inflation. Meanwhile, country’s inflation is likely to ease in near future on the back of strong agriculture output, it added. Referring to the growth in second quarter of current fiscal, the RBI said that strengthening export growth and signs of revival in some services, along with the expected pick-up in agriculture, could support an increase in growth in the second half of 2013-14. By adding further, central bank said that revival of large stalled projects and clearances by the Cabinet Committee on Investment (CCI) would buoy investment and overall economic activity by the end of year.

Currently, 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) widened 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. Further, industrial activity has weakened with a contraction in consumer durables and capital goods sector, reflecting prevailing downturn in both consumption and investment demand.

India VIX, a gauge for markets short term expectation of marginally lost 1.16% at 19.53 from its previous close of 19.79 on Tuesday. (Provisional)

The CNX Nifty gained 30.80 points or 0.50 % to settle at 6,251.70. The index touched high and low of 6,269.20 and 6,222.60 respectively. Out of the 50 stocks on the Nifty, 23 ended in the green, while 24 ended in the red and three stocks remain unchanged.

The major gainers of the Nifty were Bharti Airtel up 5.28%, Dr. Reddy's Laboratories up by 4.18%, BPCL up by 3.13%, Ranbaxy up by 2.96% and Hindalco up by 2.63%. The key losers were Axis Bank down by 2.31%, Wipro down by 2.07%, Bank of Baroda down by 2.06%, Ambuja Cements down by 1.31% and SBI down by 1.29%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.53%, Germany’s DAX up by 0.41% and the United Kingdom’s FTSE 100 up by 0.53%.

The Asian markets concluded Wednesday’s trade in green ahead of the conclusion of the US Federal Reserve’s policy meeting. The regional earnings season also continued to roll on, with investors eyeing reports from major companies in Japan and China. Indonesia plans to issue yen and dollar sovereign bonds in the first half of 2014 to fund its budget deficit. Indonesia’s budget for 2014 calls for a deficit of Rp 175.4 trillion ($15.8 billion), which is equivalent to 1.69% of gross domestic product. Japanese industrial production grew by 1.5% in September, with manufacturers expecting further gains for the current month, the Ministry of Economy, Trade and Industry reported. The result marked a swing from August’s 0.9% drop, though it missed forecasts for a 1.8% gain. A monthly survey of manufacturers included with the data showed optimism for the current month with average expectations for a 4.7% rise in October industrial output up from the 2.5% forecast increase seen in the previous month’s survey. For November, however, the manufacturers expected output to fall by 1.2%.

In Hong Kong, mortgage loan approvals in September fell 6.7% compared with August, to $13.5 billion, the Monetary Authority reported. Among approved mortgage loans, those financing primary market transactions rose 67.5% to $2.8 billion, while those for secondary market transactions dropped 17.4% to $8.1 billion. Mortgage loans for refinancing also dropped 12.3% to $2.6 billion. A World Bank Group report stated that China is among the world’s top 20 in making progress on improving its business regulations since 2005, making it a leading power in East Asia and the Pacific. Separately, Shanghai and Beijing posted the slowest economic growth in the first three quarters of this year among China’s 25 provincial areas which have released their economic data due to the two cities’ greater efforts on economic restructuring.