Market reverses early gains to make seventh straight day of loss

Indian markets remained lackluster after six straight days of fall on Wednesday, though they bucked the global trend and overlooking the disappointing IIP data for September and surge in CPI inflation to double digit and moved in green terrain but the mood never looked firm and traders remained cautious on global concern that US Federal Reserve will soon begin scaling down its asset buying program. But there was complete trend reversal in second half that took the markets even lower from where they started, ending in red for the seventh straight day.

The global markets though gave a soft cue with US markets ending mostly lower on indication that Fed will go for stimulus tapering soon. The Asian markets remained concerned too and snapping two sessions’ gains, most of the indices in the region closed with sharp losses as there was concern of Fed’s probable decision to taper and disappointment of Chinese leaders' failure to outline steps to curb state dominance of the economy. The European markets too made a somber start and declined for the second day in a row awaiting data that may show euro-area industrial output fell.

Back home, the Indian markets went for a gap-down start tailing the weakness in the global peers and in a knee-jerk reaction to the lower than expected Industrial Production numbers, which grew by 2% compared to a contraction of 0.7% in the corresponding period last year but remained much lower than the expected 3%.Also, driven by food prices, the annual consumer price inflation quickened to 10.09% in October from 9.84% in September, both the indices seemed extending the fall for the seventh day as the Nifty slipped below the 6000 mark. However, reversing the course of action, the markets bounced back in green in the early few minutes of trade, though trade was not smooth even afterwards, as the benchmarks kept moving in and out of the red line lacking any major supportive cues. Rupee showed some strength, recovering from its continuous fall and from almost breaching 64/$ mark on speculative RBI intervention, but traded in a tight band above the 63/$ mark. Markets got a fillip from the inline results of PSU lender State Bank of India (SBI), the bank reported NII increase of 11.6%, however its net profit for the quarter ended September 30, 2013 fell by 35.1% from a year earlier to Rs 2,375 crore, mainly due to higher provisions amidst deteriorating asset quality. But what happened in the final hours of trade were mere repetition of what has been going for the past more than a week and benchmarks encountered heavy selling at the highest points of the day, which took the markets once again in the red terrain. Broader markets too remained in sober mood since morning and ended with cut of over half a percent.

Finally, the BSE Sensex lost 87.51 points or 0.43%, to settle at 20194.40, while the CNX Nifty declined by 28.45 points or 0.47% to settle at 5,989.60.

The BSE Sensex touched a high and a low of 20365.59 and 20161.64, respectively. The BSE Mid cap index was down by 0.59%, while the Small cap index lost 0.65%.

The top gainers on the Sensex were Hindalco Inds up 2.29%, Tata Steel up 1.86%, Mahindra & Mahindra up 1.83%, Sun Pharma up 1.61%, and Tata Motors up 1.58%, on the flip side Gail India down 2.43%, SSLT down 2.24%, Cipla down 2.00%, Hero MotoCorp down 1.85%, and HDFC Bank down 1.83%, were the top losers on the index. 

On the BSE Sectoral front, Auto up by 0.47%, Consumer Durables up by 0.22%, Metal up by 0.19%, and PSU up by 0.11%, were the only gainers, while Realty down by 1.14%, FMCG down by 0.98%, IT down by 0.65%, Bankex down by 0.62%, and Capital Goods down by 0.59%, were the top losers on the sectoral front.

Meanwhile, in order to check frauds related to the property, the Reserve Bank of India (RBI) has asked the non- banking financial companies (NBFCs) to register the records of all equitable mortgages created in their favour on and after 31st March 2011 with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) set up by the government in order to keep records of all mortgages deal.

As per the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002, financial institutions and banks are required to file the details of all mortgages created in their favor by way of deposit of title deeds on the portal of the CERSAI in the prescribed format.

Institutions notified under the SARFAESI Act have to mandatorily register with CERSAI, while the institutions that are not notified under the act, too have to register mortgages created in their favor by deposit of title deeds with the CERSAI.

The move is aimed to reduce frauds related to the property as the central bank is of the view that the potential fraud or multiple financing against the same property may not be fully prevented in the absence of the records of all the equitable mortgages obtained even by non-SARFAESI notified banks or financial institutions (including NBFCs) with the CERSAI.

The CNX Nifty touched a high and low of 6,042.25 and 5,972.45 respectively.

The top gainers on the Nifty were Tata Steel up by 3.02%, Hindalco Industries up by 2.61%, Sun Pharmaceuticals Industries up by 2.07%, State Bank of India up by 1.95% and Tata Motors up by 1.81%. On the other hand, Cipla down by 2.54%, GAIL (India) down by 2.47%, HDFC Bank down by 2.17%, IndusInd Bank down by 2.09%, and Sesa Sterlite down by 2.08%, were the top losers.

The European markets were trading in red, France's CAC 40 was down by 0.28%, Germany's DAX was down by 0.18%, and United Kingdom's FTSE 100 was down by 0.81%. 

The Asian markets concluded Wednesday’s trade in red after China’s leaders failed to provide a clear direction on policy over the coming decade. Stocks in China in particular reacted badly to Tuesday’s conclusion of the Third Plenum while the Nikkei’s strong upward streak in the last two sessions came to a halt. China’s leaders pledged to enact fiscal and land reforms, relax investment controls and let the market play a decisive role in allocating resources, following a four-day Communist Party policy meeting. The Third Plenum was important because it gave an opportunity for the new government to present a plan on how it would reshape the economy in order to achieve sustainable growth. The negative market reaction points toward dissatisfaction over the lack of details after the meeting.

Chinese banks’ non-performing loan ratio rose slightly to 0.97% at the end of September from 0.96% a quarter earlier, the China Bank Regulatory Commission reported. Non-performing loans totaled 563.6 billion yuan ($92.5 billion) at the end of third quarter, compared with CNY539.5 billion at the end of June. Japan’s Core Machinery Orders fell more-than-expected and stood at -2.1% from 5.4% in the preceding month. South Korea’s jobless rate stood at 3% in October, unchanged from the previous month even as government data showed an increase in job creation from a year ago. But unemployment among young people aged 15-29 was up marginally to 7.8% from 7.7% in September.