Post Session: Quick Review

Indian markets after losing their gaining streak in last session, kept consolidating at lower levels on Wednesday. There was not much cue that could have supported the markets, instead the weakness in the global bourses and flat numbers of the Services PMI weighed negatively on the local markets. Earlier, the start was subdued tailing weak global cues and the major indices found it difficult to break the range with Sensex and Nifty getting tough resistance near 20850 and 6200 levels respectively.

On the global front, the US markets enlarged their fall overnight, while most of the Asian markets remained in somber mood and some even lost over a percent with Japanese market taking the lead, down by over 2 percent, as yen strengthened against dollar. However, the European markets looked in comparatively better position and majority of them made a positive start before European Central Bank officials gather for a policy meeting tomorrow.

Back home, the market mood turned nervous in the last leg of trade ahead of the exit poll results for the five state assembly elections after the Delhi votes. Exit polls are likely to give a direction for further moves in the markets till the results are finally announced on Sunday, December 8. Earlier the markets begin the day on a soft note as the concern of early US Fed rollback of its bond-buying programme coming back again came on a forefront and pressured the whole global markets. The Indian markets were additionally influenced by sustained selling by funds amid a weak trend in the Asian region. Meanwhile, the HSBC Business Activity Index posted 47.2 in November compared to 47.1 in October. Though, there was improvement for the second consecutive month but the numbers remained sub-50.0 level for the fifth time in as many months and indicated a solid rate of output contraction across the Indian service economy. The seasonally adjusted HSBC India Composite Output Index too remained below the 50.00 mark, however, up from 47.5 in October to 48.5, as manufacturing production rose in the latest month. The trade took turn for the worst in the final hours and the major indices slumped to their lowest point of the day. Both the benchmarks ended lower by over half a percent for the day, while the broader indices too snapped the session in red. Sectorally, power, metal, IT and tech could only manage to end in green otherwise all other sectoral indices ended in red. The realty sector was the major drag for the markets today despite the RBI allowing core investment companies to raise external commercial borrowing (ECB) for projects floated as special purpose vehicle in order to strengthen the flow of resources into the infrastructure sector.

The market breadth on the BSE ended in red; advances and declining stocks were in a ratio of 1143: 1330, while 186 scrips remained unchanged. (Provisional)

The BSE Sensex lost 125.66 points or 0.60% to settle at 20729.26.The index touched a high and a low of 20863.37 and 20673.62 respectively. Among the 30-share Sensex, 12 stocks gained, while 18 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.60% and 0.02% respectively. (Provisional)

On the BSE Sectoral front, Power up by 0.59%, Metal up by 0.45%, IT up by 0.15% and Teck up by 0.13%, were the only gainers, while Realty down by 2.67%, FMCG down by 1.34%, Auto down by 1.04%, Capital Goods down by 0.74% and Oil & Gas down by 0.58% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Power up by 2.87%, Tata Steel up by 1.47%, Jindal Steel up by 1.45%, Wipro up by 1.20% and Bharti Airtel up by 0.71%, while, Hindalco Industries down by 2.14%, ITC down by 1.85%, ONGC down by 1.63%,  Tata Motors down by 1.57% and ICICI Bank down by 1.51% were the top losers in the index. (Provisional)

Meanwhile, Cheerful over the contraction witnessed in current account deficit (CAD) of the country, India Inc has said that narrowing of CAD will help arrest depreciation of the rupee and ease inflation concerns. The CAD, which represents difference between outflows and inflows of foreign exchange, narrowed sharply to $5.2 billion, or 1.2 percent of GDP, in the July-September quarter of this fiscal year.

Assocham President Rana Kapoor has said that CAD is the key determinant of exchange rate and containing it will impact rupee positively and ease the concerns on inflation. The rupee, which hit a record low of 68.85 per dollar on 28 August, staged a dramatic recovery to around 62 per dollar. Meanwhile, Kapoor expressed the need of more measures from government in order to contain inflation and to meet the disinvestment target to address concerns on public finance. The President of the PHD Chamber of Commerce Suman Jyoti Khaitan said that improvement in the external scenario will help stabilise the overall macroeconomic situation of the country like inflation and exchange rate and pave the way to revive growth further and attain its full potential. By adding further, Khaitan said that sharp fall witnessed in CAD is mainly attributed to the decisive measures taken by the government and the RBI, which also demonstrates the fact that India can contain the deficit whenever it wants.

The sharp contraction in CAD was mainly on the back of decline in gold imports and turnaround in exports. Gold and silver imports in April-October period of 2013 declined by 12.86 percent to $24 billion compared to $28 billion in the same period last year. On the other hand, value of exports increased by 6.32% to $179.38 billion during April-October, 2013 as against $168.71 billion in the corresponding period of last year. Recently, the government has hiked gold imports rate to 15% and the RBI introduced 80/20 rule under which 20% of all gold imports by importers has to be re-exported. On exports front, the government has announced several export-boosting measures like sops for exports orientated Special Economic Zones (SEZs).

India VIX, a gauge for markets short term expectation of volatility lost 4.08% at 23.71 from its previous close of 24.72 on Tuesday. (Provisional)

The CNX Nifty lost 33.10 points or 0.53% to settle at 6,168.75. The index touched high and low of 6,209.15 and 6,149.90 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 Tata Power up 3.13%, PNB up by 2.76%, Power Grid up by 2.29%, NMDC up by 1.75% and Wipro up by 1.68%. The key losers were Hindalco down by 2.42%, ITC down by 2.11%, IDFC down by 1.99%, DLF down by 1.83% and Ranbaxy down by 1.82%. (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 0.04% and Germany’s DAX up by 0.22%.

The Asian markets barring Shanghai Composite and Taiwan Weighted concluded Wednesday’s trade in red with Japan’s Nikkei Stock Average fell sharply as yen regained some lost ground. Indonesia’s rupiah forwards fell to a four-year low on speculation companies are boosting purchases of the greenback to make year-end payments amid lack of dollars in the domestic market. Shanghai led other Chinese cities in economic restructuring as it came out top in a survey ranking their speed of transformation, innovation capability and social harmony. Shanghai’s Economic Restructuring Index stood at 78.1 last year, up 4.6 points from that in 2010 and against the national average of 44.5

Indonesia’s manufacturing activity slowed in November as the country’s manufacturers cut production volumes amid declines in new export orders, fewer workers and higher costs due to a weaker rupiah. HSBC Indonesia’s Purchasing Managers’ Index - which tracks new orders, output, employment, suppliers’ delivery times, and stocks of items purchased, collected form a survey of over 400 manufacturers in Indonesia - fell slightly to 50.3 last month from 50.9 in October.