Post Session: Quick Review

Putting an end to three consecutive sessions winning streak, Indian benchmark equity indices witnessed some consolidation in today’s trading session and ended with loss of close to two tens of a percent. Benchmarks momentarily break out in green during late morning deals, otherwise kept grinding under the intense selling pressure which halted only by the close of trade. Nevertheless, despite settling near day’s lowest point, Sensex and Nifty, ended above the crucial 20,850 and 6,200 bastions respectively. However, broader indices witnessing bit of traction and outperforming larger peers, ended with gains of close to quarter of a percent. 

Three years lower Q2 Current Account Deficit (CAD) data, which narrowed sharply to $ 5.2 billion or 1.2% of GDP in Q2 September 2013, from $ 21 billion or 5% of GDP in September 2012, gave investors, the reason to rejoice, which otherwise were skeptical of investing into local equities amidst the speculation that the Federal Reserve will trim its debt purchases as soon as this month. Additionally, 0.6% decline of Core industries' output data, which occupies 37.9% weight in the overall Index of Industrial Production (IIP), also spooked sentiment. Nevertheless, the market is expected to remain volatile as counting for Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan Assembly elections will be held on December 8.

On the global front, Asian shares hit the skids and the dollar stood tall on Tuesday as a batch of upbeat US economic data confirmed the Federal Reserve's inexorable tilt towards reducing its stimulus soon, while the yen sank on talk of further central bank easing. Meanwhile, European shares too reflecting the somber mood, were trading lower in red terrain.

Closer home, in the choppy session of trade, stocks from Realty, Oil & Gas and Power counters were the top outperformers, while those from Fast Moving Consumer Goods, Auto and Consumer Durable pivotal negated the gains. Most auto stocks were under pressure on lower-than-expected November sales. Among those, Bajaj Auto lost half a percent on reporting 17% drop in November 2013 sales. Meanwhile, banking shares witnessed heavy profit-booking after RBI proposed increased capital requirements and intense regulation for ‘too  big to fail’ kind of banks. Further, RBI also issued updated guidelines for stress-testing of banks which will be effective from April. Meanwhile, telecom stocks too went silent after EGoM meeting scheduled to discuss the much-awaited M&A guidelines in the telecom sector was reportedly postponed. Idea Cellular, Bharti Airtel, Reliance Communication all ended down in the range of 0.25-2.00%.

The market breadth on the BSE ended in green; advances and declining stocks were in a ratio of 1249:1238, while 167 scrips remained unchanged. (Provisional)

The BSE Sensex lost 41.88 points or 0.20% to settle at 20856.13.The index touched a high and a low of 20927.05 and 20817.75 respectively. Among the 30-share Sensex, 10 stocks gained, while 20 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.26% and 0.21% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 1.77%, Oil & Gas up by 0.51%, Power up by 0.29%, Metal up by 0.27% and IT up by 0.13%, were the only gainers, while FMCG down by 0.75%, Auto down by 0.62%, Consumer Durables down by 0.57%, Bankex down by 0.48% and Capital Goods down by 0.24% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Gail India up by 3.37%, BHEL up by 2.70%, Jindal Steel up by 2.44%, Hindalco Industries up by 1.68% and RIL up by 0.77%, while, NTPC down by 1.36%, Dr Reddys Lab down by 1.28%, Hero MotoCorp down by 1.27%, Mahindra & Mahindra down by 1.18% and Coal India down by 0.93% were the top losers in the index. (Provisional)

Meanwhile, encouraged over the better-than-expected growth in GDP and a significant contraction in country’s current account deficit (CAD), Finance Minister P Chidambaram expressed confidence that the economy would expand by 5 percent and CAD would remain below the set target of 3.7 percent of GDP in current financial year. The CAD narrowed sharply to $5.2 billion, or 1.2 percent of GDP, in the July-September quarter of this fiscal, while, Gross Domestic Product (GDP), a measure of the country's total economic output, grew by 4.8% for the reported quarter.

Hoping things will become better in the second half of the current fiscal, Chidambaram has said that Indian economy is passing through a ground of optimism and the government is looking forward to better performance in Q3 and Q4 as the recent improvement in some important sectors like manufacturing, better performance of exports as well as certain steps taken by the government will give boost to economic growth. Meanwhile, Government's forecast for economic growth is above the estimation of several global institutions including World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) that have projected growth rate of below 5 percent for 2013-14.

Furthermore, amid rising concerns over country’s widening fiscal deficit, which has already reached 84.4 percent for the full-year Budget estimates in the first seven months of 2013-14, Chidambaram said that the government will be able to achieve the disinvestment target of Rs 40,000 crore and contain the fiscal deficit within 4.8 percent of the GDP. However, during the first seven months, the government was able to garner only about Rs 1,150 crore through disinvestment.

India VIX, a gauge for markets short term expectation of volatility gained 5.82% at 24.72 from its previous close of 23.36 on Monday. (Provisional)

The CNX Nifty lost 16.30 points or 0.26% to settle at 6,201.55. The index touched high and low of 6,225.40 and 6,191.40 respectively. Out of the 50 stocks on the Nifty, 21 ended in the green, while 29 ended in the red.

The major gainers of the Nifty were Gail up 3.03%, BHEL up by 2.85%, DLF up by 2.72%, Jindal Steel & Power up by 2.44% and NMDC up by 2.20%. The key losers were IndusInd Bank down by 1.74%, Kotak Bank down by 1.43%, HCL Tech down by 1.31%, Dr. Reddy's Laboratories down by 1.26% and L&T down by 1.21%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 1.49%, the United Kingdom’s FTSE 100 down by 0.51% and Germany’s DAX down by 0.69%.

The Asian markets concluded Tuesday’s trade mostly in red, Japanese stocks got a boost from a weaker yen. The purchasing managers index (PMI) for China’s non-manufacturing sector stood at 56 in November, down from 56.3 for October. A PMI reading above 50 indicates expansion, while a reading below 50 indicates contraction. The monthly indicator is released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. Meanwhile, Japan’s monetary base rose more-than-expected last month to 52.5%, from 45.8% in the preceding month.

Indonesia’s annual inflation accelerated slightly in November on the back of rising costs of electricity, processed foods and health care, but the modest increase was not expected to compel Bank Indonesia to take any mitigating action. The consumer price index rose 8.37% last month from a year earlier, compared to an 8.32% rise in October. That brings year-to-date inflation to 7.79% year-on-year, which would still be in line with Bank Indonesia and the government’s estimate that this year’s inflation will be less than 9%.