Post Session: Quick Review

The final session of November F&O expiry was fairly positive one, which led to Indian equity market eke out modest gain of over half a percent for the session, to end the series above the psychological 20,500 (Sensex) and 6,100 (Nifty) levels respectively, though with loss of over three percent. Today’s trading session’s gains were on the back of positive global set-up, which encouraged investors’ to go long on their position ahead of the release of September-quarter GDP data and October fiscal deficit data on Friday. Additionally, hopes of good GDP numbers to spring up positive surprise for the markets after Montek Ahluwalia’s optimistic statement few days back, also underpinned participants to open fresh bets. Meanwhile, industry body Assocham, just a day ahead of the announcement of GDP figure for the July-September quarter of the current fiscal, has pegged the country's growth at 5.4% for the period on improved agricultural output. Notably, in the stable session of trade, volatility played out large mainly in the dying hours of the trade, which lifted the benchmarks near day’s highest point. Meanwhile, broader indices outperforming frontline indices ended with gains of over 3/ 4 of a percent and for the series, while CNX Midcap gained over a percent, BSE Small cap index rallied over 3%. Additionally, market recorded second highest turnover of Rs 4.98 lakh crore on the F&O expiry session.

On the global front, Asian shares were in a buoyant mood, with Japanese stocks hitting their highest close in nearly six years after the yen fell sharply on relatively positive US economic data. In the US, jobless claims unexpectedly fell last week and the November consumer confidence improved from a preliminary reading, while the Chicago PMI held up better than expected last month after surging in October. Meanwhile, European shares edged up on Thursday on the back of new record highs in the United States, but held below five-year peaks as investors digested mixed earnings news and a U-turn by Britain on tobacco advertising.

Closer home, amidst across the board buying activities, stocks from Fast Moving Consumer Goods, Banking and Health Care counters were the underperformers. Banking stocks were down on profit booking. Meanwhile, in a related development, reports suggest that some Indian banks are looking to issue bonds in overseas markets to raise capital under Basel III guidelines. On the flip side, stocks from Capital Goods, Power and Realty counters were the top gainers of the session. Additionally, sugar stocks rallied for yet another session after Food Minister K.V. Thomas highlighted that the country could give financial assistance to sugar mills to help them pay farmers higher prices for cane, thereby highlighting that some relief measures may be in store.  The industry has been demanding an increase in import duty, interest-free loans for mills, subsidies for exports and creation of buffer stocks to help mills. Besides, oil and gas companies stocks hogged limelight after Oil Secretary Vivek Rae underscored that the Ministry of Petroleum and Natural Gas was working out a policy framework on shale gas exploration under which private domestic oil and gas players would get the right to explore shale gas or oil in their blocks. The overall market breadth on BSE ended in the favour of advances which thumped declines in the ratio of 1453: 1024; while 186 shares ended unchanged. (Provisional)

The BSE Sensex gained 145.83 points or 0.71% to settle at 20566.09.The index touched a high and a low of 20606.38 and 20461.51 respectively. Among the 30-share Sensex, 27 stocks gained, while 3 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.93% and 0.94% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 1.95%, Realty up by 1.32%, Power up by 0.78%, Metal up by 0.76% and Oil & Gas up by 0.67% were the top gainers, while there were no losers in the space. (Provisional)

The top gainers on the Sensex were BHEL up by 3.14%, Hindalco Industries up by 2.40%, Tata Steel up by 2.12%, Coal India up by 1.87% and Mahindra & Mahindra up by 1.83%, while, ITC down by 0.33%, Cipla down by 0.26% and SBI down by 0.01% were the top losers in the index. (Provisional)

Meanwhile, amid rising fears over the increase in natural gas prices to $8.4 per mbtu from April 1, 2014 which is twice the current rate, the cabinet will soon decide putting a cap to limit hike in gas rates. Earlier in June, the government had approved the formula under which all domestically produced gas will be priced at an average of the price prevailing at international gas trading hubs and the actual cost of importing liquid gas (LNG). The natural gas pricing formula will be effective from April 1, 2014 for a period of five years and the prices will be revised on the quarterly basis. Moreover, the price for each quarter will be calculated based on the 12-month trailing average price with a lag of one quarter.

Under the new approved pricing formula, the gas prices will get doubled at $8.40 per million British thermal unit from the current price at $ 4.20 per mbtu and put excessive burden on consumers. Finance Ministry and Power Ministry both asked the cabinet to put cap on gas price hike. The finance ministry is of the view that under this formula the gas producers will reap unlimited gains in case of an upswing in global prices, while on the other hand, Power Ministry feels any price of more than $5 per mbtu will lead to rise in electricity generation costs that would be hard for the consumers to absorb. Further, both the ministries also sought for excluding spot LNG deals from the formula because they are very volatile.

The new price will be uniformly applicable to all public and private sector producers alike. The increase in gas prices will directly benefit these local producers. Further, the move to raise gas prices is expected to benefit the government by around $2.2 billion incremental revenue by way of higher taxes. The government can use high profit share to subsidize gas supply to the core sector. So far, the new gas price formula has not been notified amid disputes over whether Reliance Industries should get the new rates, as it has not been producing as per pre-stated targets from eastern offshore KG-D6 block.

India VIX, a gauge for markets short term expectation of volatility lost 2.03% at 20.71 from its previous close of 21.14 on Wednesday. (Provisional)

The CNX Nifty gained 49.20 points or 0.81% to settle at 6,106.30. The index touched high and low of 6,112.95 and 6,068.30 respectively. Out of the 50 stocks on the Nifty, 46 ended in the green, while 4 ended in the red.

The major gainers of the Nifty were JP Associate up by 7.91%, BHEL up by 3.46%, Grasim up by 2.64%, Power Grid up by 2.55% and IndusInd Bank up by 2.52%. The key losers were Cairn down by 1.58%, Cipla down by 0.25%, Tata Motors down by 0.05% and NMDC down by 0.04% (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.34%, the United Kingdom’s FTSE 100 up by 0.44% and Germany’s DAX up by 0.41%.

The Asian markets barring Hang Seng and Jakarta Composite concluded Thursday’s trade in green with Japan’s Nikkei making its highest closing level in nearly six years, as a slump in the yen pushed exporters higher on expectations of improved earnings. Japanese retail sales rose 2.3% in October from a year earlier in a sign that household consumption may be leading the nation’s economic recovery. The figures, released by the Ministry of Economy, Trade and Industry, were led by increases in sales of automobiles. Sales at large-scale retailers fell 0.4% on year, after adjustment for the change in the number of stores. The data was an encouraging sign for Prime Minister Shinzo Abe’s pro-growth policies that successfully lifted consumer spending in the first half of the year, largely on one-off, luxury purchases.

Philippine economy grew 7 percent in July-September, the National Statistical Coordination Board stated. Gross domestic product growth in the first nine months stood at 7.4 percent, compared with 6.7 percent in the same period last year. The Office of Industrial Economics Thailand stated that Thai Industrial Production fell to a seasonally adjusted -4.0%, from -2.9% in the preceding month. The National Statistical Coordination Board reported that Philippines GDP fell to a seasonally adjusted annual rate of 7.0%, from 7.6% in the preceding month whose figure was revised up from 7.5%.