Post Session: Quick Review

The October series futures and options contract expiry day turned out to be a thrilling one for the local equity markets, which led to Sensex ending near all time high level of 21,150 and Nifty just shy of the crucial 6,300 level, recording highest ever turnover for the day. While, volatility ruled the roost for the most part of the trading session, the last hour of the trade turned out to be a game changer, a peculiar characteristic on the F&O expiry session. Investors at Dalal Street went on buying spree after US Federal Reserve maintained an aggressive monetary stimulus program and reiterated that it will await stronger economic conditions before scaling it back. The Fed’s decision to hold steady its $85 billion per-month bond-buying program, gave a sentimental boost to the bulls which for third consecutive session ended on sanguine note. Meanwhile, recommendations of steep diesel price hike, which could cut country’s huge oil subsidy bill, also lifted the market, which in absence of positive global set-up staged a remarkable rally. Meanwhile, broader indices also gained momentum in-line with larger peers, to end with gains in the range of 0.50-1.50%.

On the global front, Asian markets suffered a blow on Thursday as the US Federal Reserve’s latest policy outlook was deemed less dovish than some were counting on. Helping sentiment was the Bank of Japan’s decision to stick with its massive stimulus programme, which has shown tentative signs of breaking the grip of deflation. Meanwhile, European shares slipped further away from five-year highs on Thursday, with the Fed’s statement raising concerns the US central bank would start trimming its stimulus sooner than foreseen.

Closer home, the secular up-move of the markets was led by across the board rally of the bourses, however bucking the trend were the stocks belonging to Health Care counter. On the flip side, Consumer Durables, Public Sector Undertaking and Banking counters were the star performers of the session. Meanwhile, slew of good earnings from PSU banks also cheered Dalal Street. While, Bank of Baroda surged over 10% despite reporting 10.24% fall in Q2 net profit, Bank of India rallied by 21% on reporting two fold jump at Rs 621.77 crore for second quarter ended September 30, 2013. Additionally, Allahabad Bank added over 13% on reporting 17.76% rise in Q2 FY14 net profit at Rs 275.81 crore.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1318: 1168, while 171 scrips remained unchanged. (Provisional)

The BSE Sensex gained 130.55 points or 0.62% to settle at 21164.52.The index touched a high and a low of 21205.44 and 20991.98 respectively. Among the 30-share Sensex, 18 stocks gained, while 12 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.43% and 0.55% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 3.32%, PSU up by 2.43%, Bankex up by 2.05%, Metal up by 1.73% and Oil & Gas up by 1.54% were the top gainers, while Health Care down by 1.42%, IT down by 0.10% and Auto down by 0.01% were the only losers in the space. (Provisional)

The top gainers on the Sensex were SBI up by 4.47%, Tata Steel up by 2.97%, ICICI Bank up by 2.32%, Tata Power up by 2.11% and Gail India up by 2.06%, while, Dr Reddys Lab down by 3.36%, Sun Pharma down by 1.90%, Mahindra & Mahindra down by 1.22%,  Infosys down by 0.99% and Cipla down by 0.91% were the only losers in the index. (Provisional)

Meanwhile, Concerned over the rising inflation in the country, the Reserve Bank Governor Raghuram Rajan said that inflationary expectations are still high and the central bank will take tough stance in near future to bring it down to RBI’s comfort zone of four to five percent. WPI inflation accelerated to 7-month high of 6.46% in the month of September on y-o-y basis as against 6.10% in August mainly on the back of high food article prices.

The immediate focus of the central bank is to tame inflation as rising inflation has been eroding consumers and business confidence in the country. Recently, the RBI in its second quarter review of monetary policy has hiked repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.5% to 7.75% with immediate effect in order to restrain inflation. On the other hand, the government has also planned to introduce inflation-based certificate to provide some cover to households from impact of inflation.

Allaying fear over the US Fed taper, Raghuram Rajan said that India now is in a better position to face the US Federal Reserve's bond buyback programme mainly on the back of country’s comfortable current account deficit (CAD) position and its ability to raise money from external sources. India’s CAD widened to a record high of 4.9 per cent of GDP in the April-June quarter, 2013. Meanwhile, CAD is expected to come down below the government's target at 70 billion or 3.7 percent of GDP on account of number of measures taken by the RBI and the government to check country’s CAD.

India VIX, a gauge for markets short term expectation of volatility lost 5.83% at 18.39 from its previous close of 19.53 on Wednesday. (Provisional)

The CNX Nifty gained 47.45 points or 0.76% to settle at 6,299.15. The index touched high and low of 6,309.05 and 6,235.90 respectively. Out of the 50 stocks on the Nifty, 35 ended in the green, while 15 ended in the red.

The major gainers of the Nifty were Bank of Baroda up 10.98%, PNB up by 9.44%, SBI up by 4.35%, JP Associate up by 4.14% and IDFC up by 3.46%. The key losers were Dr. Reddy's Laboratories down by 3.49%, Ambuja Cements down by 2.80%, Sun Pharmaceuticals down by 1.71%, Lupin down by 1.68% and Ranbaxy down by 1.31%. (Provisional)

Most of the European markets were trading in red with, Germany’s DAX down by 0.21% and the United Kingdom’s FTSE 100 down by 0.38%, while France’s CAC 40 up by 0.01%.

The Asian markets concluded Thursday’s trade in red after the Federal Reserve left monetary policy unchanged, while China was weighed down by declines in banking stocks. Lenders in China were in focus after several of the country’s largest banks reported their third-quarter earnings, with profit growth continuing to decline as the sector faced a maturing economy and interest-rate pressure. The Bank of Japan kept its monetary policy unchanged by a unanimous vote, as was widely expected, while also keeping its inflation forecast steady. Bank of Japan raised its growth projection for the fiscal year beginning April 2014 from 1.3% to 1.5%. However, it held to its previous outlook for 1.9% core consumer inflation in fiscal 2015, excluding the effects of a new consumption-tax hike.

China’s international balance of payments showed a surplus in the third quarter of this year, marking the fourth straight quarter of surpluses. The surplus under the current account totaled $39.7 billion in the three months, the data released by the State Administration of Foreign Exchange showed. In Hong Kong, the total retail sales value in September, provisionally estimated at $35.8 billion, rose 5.1% year-on-year, the Census & Statistics Department reported. After netting out the effect of price changes over the same period, the total retail sales volume grew 4.9% in the month. The revised estimate of the value of total retail sales in August increased 8.1% over the same period a year earlier, while the volume of total retail sales grew 7.2%. Separately, government expenditure for the April-September period amounted to $201.6 billion, with $141.5 billion in revenue, resulting in a $60.1 billion deficit. Fiscal reserves stood at $673.8 billion as at September 30.