Post Session: Quick Review

After seven-day bearishness, Indian equity markets finally saw the light of the day mainly on pep talk of RBI’s governor, Raghuram Rajan which coupled with dovish comments from Fed chairman nominee Janet Yellen who suggested the Fed may not be close to scaling back its stimulus, taking the markets out of the woods. Recovering from an oversold state after seven consecutive days of decline, investors got sentimental boost with RBI’s pledge of no rush in tapering dollar swap window and also lowering estimates of current account deficit (CAD) for 2013-14 to less than 3 percent of GDP at $56 billion. Unruffled with dismal set of macro-economic data, Indian equity markets traded strength to strength and logged gains of over a percent, with Sensex just ending shy of psychological 20,400 level and Nifty ending past crucial 6,050 mark. Meanwhile, broader indices too witnessing similar kind of traction ended with gains of over a percent. However, for the week both Sensex and Nifty lost of over a percent.

On the global front, receiving positive handover from Asian pacific shares, European shares rallied early on Thursday, recouping all the ground they lost earlier this week, after the Federal Reserve's incoming chair, Janet Yellen, eased concerns that stimulus measures would start to be rolled back this year.

Closer home, markets right from the start of trade looked confident, although they came from day’s high after the release of eight months high inflation data, the trade remained largely jubilant. Higher but in-line street estimated Inflation numbers, mainly prevented any rough weather at Dalal Street. On the macro-front, in yet another blow to the economy after the double digit retail inflation numbers, India's main inflation gauge, based on monthly WPI, accelerated to highest since February at 7% for the month of October as against 6.46% (Provisional) for the previous month of September and 7.32% during the corresponding month in the previous year. Nevertheless, hopes that Fed would not taper anytime soon as expected early mainly kept the markets in pink of its health. The rally, though was broad-based but was led by rate sensitives, viz, Auto, Banking and Realty counter.  Shares in state-owned banks rallied tracking gains in benchmark bonds after Reserve Bank of India governor Raghuram Rajan unveiled that RBI will buy bonds worth Rs 8000 crore via open market operations (OMO) on Monday. Additionally, telecom stocks viz Bharti Airtel, Idea Cellular, etc rang loud after Telecom Minister Kapil Sibal underscored that much awaited merger and acquisition (M&A) guidelines for the telecom sector, will be unveiled after the Empowered Group of Ministers (EGOM) deliberates upon the matter at its meeting scheduled on November 22. Thus, the overall market breadth on BSE ended on positive side; advances and declining stocks were in a ratio of 1417:1072, while 153 scrips remained unchanged. (Provisional)The BSE gained 205.02 points or 1.08% to settle at 20399.42.The index touched a high and a low of 20568.99 and 20348.27 respectively. Among the 30-share Sensex, 23 stocks gained, while 7 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.06% and 1.09% respectively. (Provisional)

While, there were no losers on the BSE sectoral front, the top gainers on the Sensex, were Auto up by 2.91%, bankex up by 2.66%, Realty up by 2.28%, Capital Goods up by 1.88% and Power up by 1.73% (Provisional)

The top gainers on the Sensex were Tata Motors up by 5.52%, Tata Steel up by 4.58%, ICICI Bank up by 3.58%, Mahindra & Mahindra up by 3.36% and Hero MotoCorp up by 2.34%, while, Coal India down by 3.81%, Cipla down by 2.05%, Sun Pharma down by 1.34%, TCS down by 1.29% and Gail India down by 1.10% were the top losers in the index. (Provisional)

Meanwhile, in yet another blow to the economy after the double digit retail inflation numbers, India's main inflation gauge, based on monthly WPI, accelerated to highest level since February at 7% for the month of October as against 6.46% (Provisional) for the previous month of September and 7.32% during the corresponding month in the previous year, mainly driven by higher fuel and manufactured goods prices. These numbers although way higher than RBI’s commonly perceived comfort level of 5% were in-line with street expectation. Worryingly, August inflation figures too were revised upwards to 6.99% from 6.10% earlier. Thus, with this the build-up inflation rate in the financial year so far stood at 5.64% compared to a build up rate of 4.84% in the corresponding period of the previous year.

The Wholesale Price Index for ‘All Commodities’ (Base: 2004-05 = 100) for the month of October, 2013 rose by 0.3% to 180.3 (provisional) from 179.7 (provisional) for the previous month. Out of this, Manufactured Products, the major group with weight of 64.97%, rose by 0.4% to 151.6 (provisional) from 151.0 (provisional) for the previous month. Within the group, index for Food Products group declined by just by 0.1% to 169.8 (provisional) from 170.0 (provisional) for the previous month due to lower price of tea leaf (blended) (3%), tea dust (unblended) (2%) and tea dust (blended), sugar, gur, sunflower oil and khandsari (1% each). However, the price of processed prawn (4%), ghee, mixed spices, cotton seed oil, oil cakes and copra oil (1% each) moved up.

Meanwhile, Primary Articles, the group having a weightage of 20.12% in overall index, remained unchanged at its previous month level of 251.6 (provisional). Within the group the index of ‘Food Article’ declined by 0.4% to 251.4 (provisional) from 252.3 (provisional) for the previous month due to lower price of ragi and maize (5% each), tea (4%) and poultry chicken, fruits & vegetables and fish-marine (3% each).  While, the prices of fish-inland (8%), moong (5%), coffee (3%), condiments & spices, egg, wheat, urad and pork (2% each) and rice, mutton, beef & buffalo meat, barley and arhar (1% each) moved up.

Further, Fuel & Power, having weight of 14.91% rose by 0.9% to 209.4 (provisional) from 207.5 (provisional) for the previous month due to higher price of electricity (agricultural) (13%), electricity (industry) (10%), electricity (domestic) (5%), electricity (commercial) and electricity (railway traction) (4% each), aviation turbine fuel (3%) and bitumen, lubricants and kerosene (1% each). 

Worryingly, October’s core Inflation too spiked up to 2.6% against 2.1% in the previous month. Thus, this set of data combined with double digit retail inflation number and lower than expected factory output figures exert pressure on RBI to continue its fight against inflation in its upcoming monetary policy review in Mid-December.

India VIX, a gauge for markets short term expectation of volatility lost 5.81% at 19.26 from its previous close of 20.45 on Wednesday. (Provisional)

The CNX Nifty added 67.05 points or 1.12% to settle at 6,056.65. The index touched high and low of 6,101.65 and 6,036.65 respectively. Out of the 50 stocks on the Nifty, 38 ended in the green, while 11 ended in the red and one stock ended unchanged. (Provisional)

The major gainers of the Nifty were Axis Bank up by 6.06%, Tata Motors up by 5.34%, JP Associates up by 5.09%, Tata Steel up by 4.84% and Bank of Baroda up by 3.76%. The top losers were Coal India down by 3.54%, Cipla down by 2.33%, Sun Pharma down by 1.82%, Asian Paints down by 1.62% and TCS down by 1.11%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.74%, the United Kingdom’s FTSE 100 added 0.81% and Germany’s DAX was up by 0.86%

The Asian markets concluded Thursday’s trade in green after Federal Reserve chair nominee Janet Yellen released remarks suggesting the central bank should continue supporting the US economy with stimulus. Japan’s gross domestic product grew at an annualized rate of 1.9% in the three-month period that ended in September. Although the result represents a sharp slowdown from the second quarter, when the economy grew by 3.8%, the lower number was anticipated. The growth data is the latest check on the progress of a range of pro-growth policies in Japan, known as Abenomics. These measures include aggressive monetary easing from the Bank of Japan that has pushed down the value of the yen.

China’s fiscal revenue growth accelerated for three months in a row in October amid a rebound in the world’s second-largest economy. The revenue, comprising income of the central and local governments, climbed 16.2 percent year on year to 1.2 trillion yuan ($197 billion) last month. The revenue grew 13.4 percent in September and 9.2 percent in August. South Korea's central bank kept its benchmark interest rate steady at 2.50%, standing pat for a sixth straight month amid caution over the country’s economic recovery and benign inflation. The last rate move was a surprise quarter-percentage-point rate cut in May, when the government also introduced a $16 billion extra budget, seeking to revive an economy that grew 2.0% in 2012, the slowest in three years.