Post Session: Quick Review

Volatility ruled the roost on the penultimate session of F&O expiry, especially the last hour of trade as benchmark equity indices kept altering between green and red terrain, finally settling in the favour of red, with slender loss of close to one tens of a percent. After signaling a positive close, benchmarks suddenly took a U-turn in the fag end of the trade as investors preferred squaring off their position fearing more volatility on account of F&O expiry and well ahead of the release of GDP data late on Friday.

Notably after trading weak for the entire trading session, benchmarks apparently started trimming losses on account of optimistic statement made by planning commission deputy chairman, Montek Singh Ahluwalia who underscored the economy to expand by over 6% next fiscal and Current Account Deficit to be significantly lower below 3% this fiscal. Nevertheless, expiry jitters soon gripped the markets, which ended well near the psychological 20,400 (Sensex) and 6,050 (Nifty) levels respectively. Meanwhile, broader indices unable to decide upon one trajectory, ended on mixed note.

On the global front, Asian stocks ended mostly lower on Wednesday as funds switched to better performing markets and as trading thinned out ahead of the Thanksgiving holiday in the US. On the flip side, European stocks were higher on Wednesday, tracking Tuesday's Wallstreet rally as investors eyed the release of German consumer climate data, as well as a string of US economic reports later in the day.

Closer home, while most of the sectoral indices ended in red, Consumer Durables, Auto and Fast Moving Consumer Goods counters were outperformers. Meanwhile, sugar stocks surged after Prime Minister Manmohan Singh set up a committee on Tuesday under the chairmanship of agriculture minister to look into how to give help to struggling sugar mills, which fuelled speculations that help for the industry could include higher import duties or interest rate-free loans amongst other things. On the flip side, stocks from Power, Realty and Technology counters were the top losers. Rupee’s appreciation mainly dragged the Information Technology shares lower. On the currency front, speculated corporate dollar inflows on account of Mylan Inc' s purchase of a unit of Strides Arcolab, for a deal valued at $1.6 billion, mainly was keeping the momentum positive for Indian currency against the backdrop of negative local equities. The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1137: 1335, while 159 scrips remained unchanged. (Provisional)

The BSE Sensex lost 10.36 points or 0.05% to settle at 20414.66.The index touched a high and a low of 20482.67 and 20348.06 respectively. Among the 30-share Sensex, 13 stocks gained, while 17 stocks declined. (Provisional)

The BSE Mid cap index ended higher by 0.28% and Small cap index ended lower by 0.16%. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 1.34%, Auto up by 1.02%, FMCG up by 0.86%, Metal up by 0.52% and Capital Goods up by 0.32%, were the top gainers, while Power down by 0.84%, Realty down by 0.82%, IT down by 0.66%, Teck down by 0.65% and Healthcare down by 0.42% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.34%, ITC up by 1.01%, Coal India up by 0.97%, ONGC up by 0.82% and Tata Steel up by 0.81%, while, Bharti Airtel down by 1.68%, SBI down by 1.43%, NTPC down by 1.31%, Wipro down by 1.04% and SSLT down by 1.02% were the top losers in the index. (Provisional)

Meanwhile, the Finance Ministry has zeroed upon half a dozen companies to liquidate its stake held in these companies, in order to meet the difficult to achieve Rs 40,000 crore divestment target for the current fiscal, which could help contain country’s fiscal deficit target of 4.8% of GDP. So far, the government has only managed Rs 1,323 crore from disinvestment. In order to make this task possible, the finance ministry is also planning to tweak the disinvestment strategy by reviving Specified Undertaking of Unit Trust of India (Suuti) and launching public-sector exchange-traded funds (ETFs).

Suuti, through which the government holds stakes in private companies, like ITC, L&T and Axis Bank, was dismantled after a Cabinet decision in March 2013. Post to this, it was decided that Rs 40,000-crore assets would be transferred to an asset management company (AMC), which would leverage the assets to raise resources for the government. However, now the government wants to revive Suuti in order to do away with Cabinet clearance, each time it sells shares held by proposed AMC if the trust is not revived.

Further, with barely few months left in the fiscal year, the disinvestment department has initiated consultations with stakeholders on the possibility of instruments such as 'exchangeable bonds' to raise funds. However, this is not something new since the Finance minister P Chidambaram in his budget for 2007-08 had allowed these exchangable bonds that allow the issuer to unlock a part of its holdings in group companies without immediate actual dilution. Supposedly, the government issues the bonds to cash-rich Coal India, in return give it shares of, say, Steel Authority of India, which would create a cross holding among public sector companies.

Meanwhile, among the companies likely to be disinvested in this year, the first could be Power Grid Corporation of India (PGCIL) or IOC in December. The public issue for Engineers India (EIL) is scheduled for January, while that for Hindustan Aeronautics is likely to come after that.

India VIX, a gauge for markets short term expectation of volatility lost 2.08% at 21.14 from its previous close of 20.69 on Tuesday. (Provisional)

The CNX Nifty lost 2.15 points or 0.04% to settle at 6,056.95. The index touched high and low of 6,074.00 and 6,030.30 respectively. Out of the 50 stocks on the Nifty, 23 ended in the green, while 27 ended in the red.

The major gainers of the Nifty were Tata Motors up 2.45%, BPCL up by 1.85%, Grasim up by 1.44%, UltraTech Cement up by 1.16% and Coal India up by 1.12%. The key losers were JP Associate down by 3.05%, Power Grid down by 2.28%, Bharti Airtel down by 1.54%, DLF down by 1.47% and SBI down by 1.44%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.16%, the United Kingdom’s FTSE 100 up by 0.32% and Germany’s DAX up by 0.20%.

The Asian markets barring Nikkei 225 and Straits Times concluded Wednesday’s trade in green with Chinese stocks moving higher on financial reform hopes. The head of China’s central bank assured the market of more financial reforms, including free deposit rates and a more flexible currency. People’s Bank of China head Zhou Xiaochuan also stated that China will allow more foreign institutions to invest in the domestic stock and bond markets. He added that China will not ease monetary policies but will speed up reforms in liberalizing interest rates and realizing capital account convertibility. Indonesia’s president stated that the economy is expected to grow 5% year-on-year in the fourth quarter if the US Federal Reserve starts trimming its massive stimulus program, the slowest pace in more than four years. Gross domestic product (GDP) in the G20 economy expanded by 5.62% in the previous quarter. Five percent growth would be the lowest since the third quarter of 2009.

Hong Kong’s total exports’ value rose by 8.8% to $323.1 billion in October over a year earlier, compared to a year-on-year increase of 1.5% in September, the Census & Statistics Department reported. Within this total, re-exports’ value rose 9.1% to $318.7 billion, while that of domestic exports fell 7.7% to $4.5 billion. For the first 10 months of 2013, total exports’ value rose 3.8% over the same period in 2012. Industrial production in Singapore fell more-than-expected last month. The Statistics Singapore stated that Singaporean Industrial Production fell to an annual rate of 8.0%, from 9.2% in the preceding month whose figure was revised down from 9.3%.