Post Session: Quick Review

In a volatile session of trade, Indian equity markets lost ground for sixth straight session and witnessed loss of over a percent to conclude near a month low level, which was below the psychological 20,300 (Sensex) and 6,100 (Nifty) marks respectively. The session turned out to be largely unproductive mainly because several attempts of recovery were rendered futile. Prevailing caution ahead of the release of key macro-economic data, IIP and CPI, later in the evening mainly kept traders on the sidelines, which anyways were reluctant to open any fresh bets against the backdrop of negative global set-up. On the macro-front, while on one hand, October consumer price index (CPI) is expected to be in double-digits at around 10%, on the other, September IIP data is expected to bring some positive surprise. Jump in September core sector data which grew by a year-high of 8% in September, is expected to have some impact on the overall index. Besides, hopes that the Federal Reserve could start tapering its $85billion-a-month asset purchase programme next month or in January, also sent Rupee past 63.50/$ mark and wrecked havoc at Dalal Street.

On the global front, Asian pacific shares made a mixed close in absence of major trading cues and also as markets awaited the release of economic policy details from a key meeting of China's ruling Communist Party in Beijing, which is due to conclude on Tuesday after four days. Meanwhile, European shares, tailing negative Asian counterparts, dipped in early trade, further drifting away from five-year highs, after a spate of disappointing company updates confirmed the trend of weak demand and poor revenues in the quarterly earnings season. While, German chip maker Infineon fell 5 percent after flagging a revenue drop at all of its units for the current fiscal quarter, the world's second-biggest mobile operator-Vodafone dropped 0.6% after reporting a 4.9% drop in quarterly organic service revenue, hit by very weak trading in Europe.

Closer home, markets squandering a flattish to positive start gyrated listlessly till afternoon deals, post to which inexorable selling pressure took-over and dragged the benchmarks to the day’s lowest point by the close of trade. No respite came to the markets which tanked over a percentage on across the board selling that dragged almost all the sectoral indices in red, with only exceptions being the stocks from defensive-Fast Moving Consumer Goods and Health Care counters. Nevertheless, top sellers were stocks from Banking, Power and Metal counters. Additionally, Auto stocks also ran out of steam after domestic car sales snapped two consecutive months positive trend and registered 4% fall to 163199 units in October.

Disappointment also crept from the drubbing of Hindalco Industries stock which lost over quarter of a percent after the company reported marginal fall in Q2 net profit. Additionally, Godrej Industries stocks plunged by 3% after the company reported 22% rise in Q2 consolidated net profit. Meanwhile, the entire ADAG stocks were under pressure after Reliance Power reported 54.81% fall in its net profit for second quarter at Rs 16.16 crore, which took the stocks lower by 3%. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 989: 1471, while 130 scrips remained unchanged. (Provisional)

The BSE Sensex lost 223.51 points or 1.09% to settle at 20267.45.The index touched a high and a low of 20584.22 and 20262.22 respectively. Among the 30-share Sensex, 3 stocks gained, while 26 stocks declined and one stock remains unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.82% and 0.76% respectively. (Provisional)

On the BSE Sectoral front, FMCG up by 0.34% and Health Care up by 0.02%, were the only gainers, while Bankex down by 1.83%, Power down by 1.70%, Metal down by 1.64%, Realty down by 1.49% and Auto down by 1.42% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 0.71%, ITC up by 0.54% and Sun Pharma up by 0.18%, while, Tata Motors down by 4.08%, ICICI Bank down by 2.66%, SSLT down by 2.47%, Tata Power down by 2.46% and SBI down by 1.94% were the top losers in the index. (Provisional)

Meanwhile, as per a survey by industry body Ficci, Indian manufacturing sector is likely to witness subdued growth in the October-December quarter of current fiscal particularly due to the concerns over high interest rates. The Ficci’s report, based on the survey of thirteen manufacturing industries,   has found that prevailing high cost of credit is impacting the margins of the manufacturing industries and the sector like automotive, capital goods and electronics are expected to witness sluggish growth in Q3 FY14. Presently, interest rate paid by the manufacturers ranges from 8 to 16 percent with average interest rate at around 12 percent per annum.

Meanwhile, the survey revealed that five out of thirteen sectors are likely to witness low growth (less than 5 percent). Two sectors such as leather and paper, are expected to have a strong growth of over 10 percent in Q3 2013-14 while remaining sectors are likely to witness moderate growth. Further, the investment into manufacturing sector is also likely to remain subdued in reported quarter as 72 percent respondents not having any plans for capacity additions for the next six months as compared to 74 percent respondents in the previous survey. Further, outlook on hiring people also looks miserable in manufacturing sector with over 75 percent of the respondents unlikely to hire additional workforce in next three months.

Meanwhile, the survey noted that demand conditions appear to be slightly better in Q3 2013-14 as 44 percent respondents reporting higher order books for the quarter under review as compared to 32 percent respondents in the previous quarter.

India VIX, a gauge for markets short term expectation of volatility gained 4.40 % at 20.86  from its previous close of 19.98 on Monday. (Provisional)

The CNX Nifty lost 67.00 points or 1.10% to settle at 6,011.80. The index touched high and low of 6,108.70 and 6,011.75 respectively. Out of the 50 stocks on the Nifty, 10 ended in the green, while 40 ended in the red.

The major gainers of the Nifty were Ranbaxy up 1.51%, M&M up by 0.93%, ITC up by 0.92%, Cairn up by 0.60% and Sun Pharmaceuticals up by 0.41%. The key losers were JP Associate down by 4.88%, Tata Motors down by 4.27%, Axis Bank down by 3.38%, DLF down by 3.31% and Tata Power down by 3.19%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.23%, the United Kingdom’s FTSE 100 down by 0.22% and Germany’s DAX down by 0.18%.

The Asian markets concluded Tuesday’s trade on mixed note with Japanese stocks outperformed Asian markets for the second straight session as the yen weakened to its lowest level in seven weeks. In China, the region was cautious as investors waited for the outcome of China’s Third Plenum - a major political meeting that is expected to result in the new government producing a policy blueprint for the next decade. The meeting started on Saturday and is expected to finish later on Tuesday. Banks in China lent less than expected in October as the central bank prioritizes managing risks and controlling inflation over boosting the economy. New yuan lending totaled 506.1 billion yuan ($83 billion) last month, up 700 million yuan from October last year.

Strong sentiment in the mid- to low-end housing segment lifted new home sales in Shanghai to a six-week high. The purchases of new homes, excluding government-subsidized affordable housing, rose 8.2% week on week to 406,600 square meters during the seven-day period ended on Sunday. Household confidence in Japan rose less-than-expected last month. Japanese Household Confidence rose to a seasonally adjusted annual rate of 41.2, from 45.4 in the preceding month. Philippines Industrial Production fell to a seasonally adjusted annual rate of 16.3%, from 18.3% in the preceding month.