Post Session: Quick Review

Correction continued at Dalal Street for the third consecutive session on Thursday, though markets for once gave a glimpse of breaking into green after two long sessions of drubbing. Final hour of trade mainly turned out to be game changer for Indian equity markets which witnessed reversal of trend to settle near day’s lowest point. Slew of negative factors plagued investors’ sentiment. Firstly, the re-affirmation of negative outlook of India by global rating, S&P, which also warned of potential downgrade of India’s sovereign credit rating if the new government fails to reverse India's low growth. Additionally, downtrend of European shares also added to prevailing caution ahead of US July-September GDP data, which could set the course for the Federal Reserve's policy, something which the markets have been closely following. By the close of trade, Nifty losses yet again were wider than Sensex. While, Sensex settled with a cut of over quarter of a percent to shut shop above 20,800, Nifty lost close to half a percent to settle sub 6,200 level. Meanwhile, broader indices underperforming larger peers by fat margins went home with colossal loss of close to a percent.

On the global front, Asian shares fell on Thursday as caution ahead of US data which could set the course for the Federal Reserve's policy overshadowed potential gains from Wall Street's record close. Meanwhile, European shares too reflecting subdued trend of Asian counterparts, edged lower ahead of European Central Bank rate decision. Street widely expects ECB to leave interest rates at a record low, though there is an outside chance of a cut after surprisingly weak euro zone inflation data.

Closer home, final hour’s drubbing pressure which dragged the markets to day’s low did not surprise the markets as the major indices from the start of the trade swung between red and green, though markets witnessed sudden spurt in the afternoon deals after breaking into green terrain, but the optimism fizzled out as apprehensive investors preferred cashing their profit in light of negative reports. Markets in the morning deals mainly cheered the rally of small to mid-sized private banks on hopes that these companies could become potential acquisition targets after Reserve Bank of India (RBI) finally come out with framework on how foreign banks will operate in the country. However, volatility haunting Dalal Street yet again negated all the gains. Sectorally, Information Technology, Metal and Health Care counters were the top gainers, while Realty, Consumer Durables and Banking counters were the top laggards. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1087: 1397, while 147 scrips remained unchanged. (Provisional)

The BSE Sensex lost 73.76 points or 0.35% to settle at 20821.18.The index touched a high and a low of 21142.85 and 20797.06 respectively. Among the 30-share Sensex, 11 stocks gained, while 19 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.08% and 1.07% respectively. (Provisional)

On the BSE Sectoral front, IT up by 1.17%, Metal up by 0.87%, Teck up by 0.52% and Health Care up by 0.06%, were the only gainers, while Realty down by 2.79%, Consumer Durables down by 2.31%, Bankex down by 2.25%, Power down by 1.93% and PSU down by 1.43% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.30%, Infosys up by 1.33%, TCS up by 1.25%, Hindalco Industries up by 1.21% and Bajaj Auto up by 1.12%, while, BHEL down by 4.38%, SBI down by 3.27%, ICICI Bank down by 2.85%, Tata Power down by 2.44% and Tata Motors down by 2.40% were the top losers in the index. (Provisional)

Meanwhile, despite the recent initiatives taken by the government to accelerate the reform process and prop up the snail paced economic growth, global rating agency Standard & Poor (S&P) has retained its negative outlook and affirmed its sovereign credit rating of ‘BBB-/A-3’ on India. However, in a blow, the rating agency has warned of a likely downgrade in 2014 if the new government fails to reverse India's low growth. It underscored that the current investment-grade ratings are supported by institutional strengths and foreign exchange reserves.

The rating agency had earlier in August this year had reiterated its negative outlook on India, citing concerns over India's fiscal and current account deficits. Further, these ratings just reaffirm the same negative outlook on India.

However, it remains to be highlighted that ever since the rating agency affirmed its negative outlook for India in August, both government and Reserve Bank of India took slew of measures to improve the macro-economic condition, which also resulted in a swift recovery in the Indian currency. Further, Finance Minister P Chidambaram in the last week also pointed over green shoots of Indian economy, i.e, good monsoon, rising exports, strong core sector growth and a lower-than-expected current account deficit, which were termed as good auguries for an economic revival.

India VIX, a gauge for markets short term expectation of volatility lost 1.87% at 19.87 from its previous close of 20.25 on Wednesday. (Provisional)

The CNX Nifty lost 27.90 points or 0.45% to settle at 6,187.25. The index touched high and low of 6,288.95 and 6,180.80 respectively. Out of the 50 stocks on the Nifty, 18 ended in the green, while 32 ended in the red.

The major gainers of the Nifty were Tata Steel up 4.28%, HCL Tech up by 2.03%, Hindalco up by 1.43%, Infosys up by 1.29% and TCS up by 1.19%. The key losers were Bank of Baroda down by 6.19%, DLF down by 4.71%, BHEL down by 4.10%, Axis Bank down by 3.78% and BPCL down by 3.69%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.13% and the United Kingdom’s FTSE 100 down by 0.25%, while Germany’s DAX up by 0.01%.

The Asian markets concluded Thursday’s trade mostly in red as investors remained cautious ahead of the major risk events that are scheduled to occur at the end of the week. Over the weekend, China will start a major political meeting - the so-called Third Plenum - where the country’s new leadership is expected to unveil a blueprint for economic policy for the next decade. Bank Indonesia’s consumer confidence index, based on more than 4,600 households, rose 2.4 points to 109.5 in October. In September, the index stood at 107.1. Readings above 100 means consumers are generally optimistic about economic conditions. Indonesia’s Finance Minister Chatib Basri stated that the country’s top priority is to halt a widening current account deficit even if does mean deliberately slowing Southeast Asia’s largest economy.

Foreign currency reserve assets of Hong Kong reached $309.6 billion at end October, the Hong Kong Monetary Authority stated. This represented an increase of 2 percent from $303.5 billion at end September. The total foreign currency reserve assets represent more than seven times the currency in circulation.