Post Session: Quick Review

It turned out to be fifth straight session of decline for Indian equity markets on Monday, with investors pressing sales at various counters on the back of subdued regional counterparts after better-than-expected US jobs data bolstered case for Federal Reserve scaling stimulus as early as next month. Bears for yet another session gave investors a run for their money, which anyways were reluctant to open fresh bets ahead of the release of crucial macro-economic data, viz Industrial production data and retail inflation data tomorrow. Meanwhile, depreciation of Indian currency to seven weeks low, which came as a blessing in disguise for Information Technology stocks, also perturbed markets. However, the only bright spot in the dull trade remained the October export data, which rose for fourth consecutive month in double digit pace. On the macro-front, exports rose by 13.47% year-over-year (Y-o-Y) at $27.27 billion, leaving trade deficit at $10.56 billion as compared to $20.21 billion a year ago. Post the numbers, the markets managed to cut back substantial portion of losses, however the selling pressure soon resumed and dragged markets to lowest point of the day by the end of the trade. Both, Sensex and Nifty, losing close to a percent, settled around the 20,500 and 6,050 levels respectively. Meanwhile, broader indices also witnessed similar magnitude of losses as larger peers.

On the global front, Asian pacific shares mostly fell to a four-week low on Monday as a surprise surge in US jobs growth heightened worries the Federal Reserve will start reducing stimulus as soon as next month. Labor Department figures showed that American employers added 204,000 workers last month after a revised 163,000 gain in September that was larger than previously estimated. However, select indices like Japan’s Nikkei 225, Hong Kong's Hang Seng and China's Shanghai Composite closed higher on account of some positive economic data from China over weekend, providing further evidence of a steady recovery from a slowdown earlier in the year as industrial production grew by 10.3% on year in October. Meanwhile, European shares edged higher in early trading on Monday, with investors betting that the growing pace of US economic recovery will offset any negative impact of the Federal Reserve's likely move to cut stimulus.

Closer home, sectorally, Health Care and Information Technology were the gainers for the session, conversely, Realty, Capital Goods and Public Sector Undertaking were the top losers. While, Rupee depreciation brought cheers for IT pack and dragged PSU OMCs lower, by negating the impact of lower crude oil prices. Additionally, most of the earnings today turned out to be flops, while Godrej Consumer Products slipped over quarter of a percent despite reporting 22% growth in Q2 consolidated net profit, Tata Chemicals lost close to two percent on reporting 48% fall in Q2 consolidated net profit. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1056: 1339, while 145 scrips remained unchanged. (Provisional)

The BSE Sensex lost 163.27 points or 0.79% to settle at 20502.88.The index touched a high and a low of 20672.53 and 20453.15 respectively. Among the 30-share Sensex, 6 stocks gained, while 24 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.83% and 0.61% respectively. (Provisional)

On the BSE Sectoral front, Health Care up by 1.27%, IT up by 0.35% and Teck up by 0.31%, were the only gainers, while Realty down by 3.05%, Capital Goods down by 2.52%, PSU down by 1.80%, Power down by 1.62% and Metal down by 1.40% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 3.08%, Tata Steel up by 1.29%, Maruti Suzuki up by 0.96%, TCS up by 0.48% and HDFC Bank up by 0.32%, while, Hindalco Industries down by 4.55%, L&T down by 2.98%, SBI down by 2.57%, Hero MotoCorp down by 2.38% and ONGC down by 2.37% were the top losers in the index. (Provisional)

Meanwhile, after falling to a two-and-a-half-year low the previous month, India's trade deficit widened to $10.56 billion in October against $6.7 billion in September as higher demand for oil and gold pushed up imports. However, that is unlikely to worry the authorities as although the gap widened from that in September, it remained way below last year’s level, when the gap was at $20.21 billion.

Meanwhile, in a positive sign, exports rose year-over-year (Y-o-Y) for the fourth straight month at a double-digit pace, at $27.27 billion, up 13.47% from October 2012 and almost the same as September's $27.68 billion. On the other hand, imports shrank to $37.83 billion against $44.24 billion a year earlier. However, gold and silver imports for the month crept higher at $1.3 billion from $0.8 billion in September, but was way lower than $6.8 billion a year ago. Further, even oil imports rose to $15 billion in October from $13.19 billion in September due to rise in fuel consumption.

India's ballooning trade deficit has been a key contributor of Current-Account Deficit, which widened to a record 4.8% of Gross Domestic Product (GDP) in the last fiscal year and in turn weighed on the rupee currency, raising concerns on how the country would manage to finance the current-account shortfall once the U.S. Federal Reserve begins unwinding its easy-money policies. However, the government in the past has taken slew of measures to clamp down its gold imports as well boost exports, which in turn has brought back the trade deficit to manageable levels. Nevertheless, with the rise in gold imports again, Economist Pronob Sen underscored that although the core gold demand will continue, higher exports will also remain sustainable on lower base.

India VIX, a gauge for markets short term expectation of volatility gained 1.73 % at 19.98  from its previous close of 19.64 on Friday. (Provisional)

The CNX Nifty lost 57.80 points or 0.94% to settle at 6,082.95. The index touched high and low of 6,141.65 and 6,067.75 respectively. Out of the 50 stocks on the Nifty, 8 ended in the green, while 42 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Dr. Reddy's Laboratories up 2.82%, Cairn up by 2.23%, Tata Steel up by 1.41%, Maruti Suzuki up by 0.50% and HDFC Bank up by 0.48%. The key losers were Hindalco down by 4.72%, Axis Bank down by 3.91%, ACC down by 3.75%, IndusInd Bank down by 3.64% and NMDC down by 3.54%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.22%, Germany’s DAX up by 0.03% and the United Kingdom’s FTSE 100 up by 0.07%.

The Asian markets concluded Monday’s trade on mixed note as the strong labor report strengthened concerns that the Federal Reserve could start to roll back its stimulus measures sooner than expected. Also in China, a major political meeting was underway in Beijing. The so-called Third Plenum will finish on Tuesday, and is expected to result in a road map for the new government’s policies over the next decade. China posted signs of steady economic growth coupled with modest inflation in October, providing encouraging news on the economy as a key policy meeting of the Communist Party got under way. Industrial production rose 10.3% year over year in October, beating expectations and September’s 10.2% rate. Inflation ticked up slightly, to 3.2% from 3.1%, staying within the government’s stated comfort range.

Japan’s current account balance logged a surplus for the eighth consecutive month in September. The surplus in the balance, one of the widest gauges of international trade, stood at 587.3 billion yen in the reporting month. The surplus amounted to 161.5 billion yen in August. Among key components, the balance of goods trade came to a deficit of 874.8 billion yen. Indonesia’s house prices accelerated in the third quarter as demand remained strong despite the rising cost of building materials and labor. Bank Indonesia’s residential property price index advanced by 13.5% over the July to September period compared to the same period last year.