Post session - Quick review

Profit booking remained the order of the trade today as bourses after piling over a percent gain in the previous session, staged contraction. Unrelenting selling pressure by funds and retail investors at higher levels hauled the barometer gauges lower close to a percent at the start of fresh F&O series. However, this time around also, daunting global developments played the malevolence. Spiraling European debt crisis and the lack of a comprehensive policy to contain the damage mainly sapped investor confidence from the risky asset class. Besides this, Moody's slash on Hungary's government bond rating to 'junk' late on Thursday also added to the pessimistic milieu. Global credit rating agency Moody's on Thursday, slashed Hungary's government bond rating to 'junk' citing high debt levels, weak growth prospects and uncertainty about its ability to meet fiscal goals, in what the government called part of 'financial attacks' against the country.

Market participants vexed over global concerns managed to overlook slew of positive developments on the domestic front which came in the form of FDI in retail sector after India threw open its $450 billion retail market to global supermarket giants late Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia's third-largest economy. The government approved 51 percent foreign direct investment in the supermarket sector, paving the entry of firms such as Wal-Mart, Tesco and Carrefour into one of the world's largest untapped market, which in turn stoked a rally in property developers and retailer stocks early on Friday. Shares of Indian retailers such as Pantaloon Retail (India), Shopper's Stop and Trent, part of the salt-to-steel Tata Group conglomerate -bucking a fall on the wider stock market - jumped on the hopes of tying up with these big global giants. While, Property developer DLF rose as much as 6 percent on hopes foreign investment in multi-brand retail would bring big-ticket projects for real estate players.

Also, in another long-awaited reform which heartened investor’s mind was the cabinet approval for draft Companies Bill, 2011, a development that would replace 55-year-old legislation and is aimed at increasing the accountability of firms while making it easier for them to do business by cutting red tape. The Bill has introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors. Among other things, it also proposes to tighten laws for raising money from the public.

However, negating the optimistic sentiment were the share of Export-driven software services companies such as Infosys and TCS which besides slipping over a percent, featured among the list of worst performers on worries of a worsening global economy hitting their earnings. Followed the suite were the shares of Metal sector which lost substantial points on recent weak economic data from China, the world's largest consumer of aluminum and copper. HSBC's preliminary China manufacturing survey fell to a 32-month low in November 2011, with the reading signaling the sector is now contracting. The Purchasing Managers Index came at 48 on a 100 point scale, reversing from a mildly expansionary reading of 51 in October.

Adding to the murkiness were the shares of European region besides Asian ones. European shares fell early on Friday, losing ground for the ninth time in 10 sessions after a report said that region’s bailout fund may not be able to raise enough funds. The European Financial Stability Facility may not be able to raise enough funds to increase its capacity to more than 1 trillion euro’s as planned because of deterioration in market conditions over the past month, the Financial Times reported. Meanwhile, Asian shares too ended lower after Germany Chancellor Angela Merkel Thursday criticized calls for the issuance of euro-zone bonds once again, following a meeting with French President Nicolas Sarkozy and Italian Prime Minister Mario Monti, saying that common interest rates for all euro-zone borrowers would send the wrong signal. Back on the home turf, BSE barometer index -Sensex- gyrating in a thin range shrugged off over 150 points to conclude the trade above 15600 mark. In a similar trend, broadly followed 50 share index -Nifty- on NSE despite surrendering close to 50 point ended above the 4700 level. Bucking the trend, broader indices ended on a mixed note. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1529:1215 while 134 scrips remained unchanged.

The BSE Sensex lost 190.26 points or 1.20% and settled at 15,668.23. The index touched a high and a low of 15,891.05 and 15,645.78 respectively. 7 stocks advanced against 23 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.42% while Small-cap index was up 0.91%. (Provisional)

On the BSE Sectoral front, Capital Goods up 2.68%, Realty up 1.21%, PSU up 0.60%, Power up 0.42% and Consumer Durables up 0.20% were the top gainers while IT down 2.27%, TECk down 1.79%, Oil & Gas down 1.79%, Metal down 1.70% and Auto down 1.50% were the top losers.

The top gainers on the Sensex were BHEL up 3.89%, L&T up 3.32%, DLF up 2.48%, SBI up 2.10% and Coal India up 1.46%.

On the flip side, Maruti Suzuki down 4.00%, Hindalco down 3.73%, Sterlite down 3.33%, Tata Steel down 3.23% and Hero MotoCorp  down 3.13% were the top losers on the index. (Provisional)

Meanwhile, the Union Cabinet on November 24 finally approved a proposal of up to 51% foreign direct investment (FDI) in multi-brand retail, and up to 100% FDI in single brand retail. The route has been long tapped by foreign retailers such as Wal-Mart and Carrefour to enter Asia's second fastest growing economy.

However, the proposal clearance has come with some checks; foreign investors will be required to invest up 50% of total FDI in back-end infrastructure, excluding the land cost and rentals. Retailers will also need to source at least 30% of manufactured/processed products from small industries, excluding agricultural items. The government has also retained the first right on sourcing agricultural produce. In terms of single-brand retail, the government has made 30% sourcing from SMEs mandatory once the FDI limit exceeds 51%. Not only this, the policy will allow foreign retailers to set up shop only in cities with a population of more than 10 lakh as per the 2011 Census. There are 55 such cities in India currently.

The Union Cabinet's move is likely to bolster the interest of foreign retailers in India, even as many existing joint venture (JV) partnerships between Indian and foreign retailers could get realigned. Various industry bodies have welcomed the decision of the government, FICCI president, Harsh Mariwala said, ‘We welcome the long awaited move of the Government of allowing FDI in multi-brand retail. It is a step which will have positive implications for various segments like food processing, farming and SMEs. This policy initiative is expected to bring more investments not just in the front end but also in the back-end infrastructure, which would result in reduced wastages and would also help in addressing the issue of inflation over a period of time.’

Industry body ASSOCHAM said foreign investments in Indian retail sector will inject competition and efficiencies, create lakhs of new jobs across the country and reduce considerable difference in farm gate prices, wholesale prices and retail prices.

India VIX, a gauge for market’s short term expectation of volatility gained 4.18% at 29.12 from its previous close of 27.95 on Thursday. (Provisional)

The S&P CNX Nifty lost 53.40 points or 1.12% to settle at 4,703.05. The index touched high and low of 4,767.30 and 4,693.10 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy up 3.73%, BHEL up 3.53%, L&T up 3.33%, BPCL up 2.99% and DLF up 2.12%.

On the other hand, Hindalco down 4.02%, Reliance Power down 3.91%, Maruti down 3.86%, Sterlite down 3.57% and Sesa Goa down 3.43% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 0.49%, Germany's DAX down 0.37% and FTSE 100 down 0.37%.

After yesterday’s rally, investment sentiments in Asian region vanished as all the Asian equity indices hammered badly in Friday’s session after German Chancellor Angela Merkel ruled out issuance of common euro bonds and a bigger role for the ECB to combat the worsening credit crisis in the euro area. European policymakers continue to struggle to break the current logjam over how to resolve the ongoing fiscal crisis, forcing investors to avoid risky assets. Fitch Ratings, citing Portugal’s large fiscal imbalances, its high indebtedness across all sectors and an adverse macroeconomic outlook, reduced the country's credit rating to BB+. That means Portugal is considered non-investment grade by Fitch, making it even more difficult for the struggling country to return to the bond markets. Adding to the pain was Hungary, which was downgraded to junk by Moody’s Investors Service late Thursday.

Meanwhile, Japan’s consumer prices fell for the first time in four months in October, an indication that slowing global demand and the yen’s strength are weighing on the world's third-biggest economy. Japan's core consumer price index fell 0.1% in October. Chinese shares ended down by 0.70 percent on Friday, weighed down by property and financial shares amid uncertainty over the timing of policy easing measures and volatility in global markets. While, Nikkei remained near two and a half year low as leaders were no closer to a consensus on how to contain the euro-zone debt crisis.