Post session - Quick review

Bears retaliated back a day after benchmarks indices posted their biggest single-day gains in three months. Unwinding the previous session gains, the barometer gauges despite dipping their heads below the water managed to hold their physiological level of 16000 for Sensex and 4800 for Nifty. Lingering cautiousness ahead of European policy makers outlining details on how they would leverage their bailout fund, in order to choke off a debt crisis threatening to rip apart the euro currency union, mainly kept the investor’s finicky. However, domestic growth issues also dissuaded market participants from taking fresh position ahead of the release of the GDP data, which is seen growing at its weakest pace in more than two years at 6.9%.

However, positive milieu across the globe, prevented malevolent damage in Indian equity markets as Asian shares ended mostly higher on Tuesday after the US holiday-shopping season got off to a strong start amidst optimism that European officials were moving closer towards fiscal union to resolve the continent's debt crisis, as a meeting of euro-zone finance ministers was set to begin.  On the flip side, European shares that descended after snapping the biggest one-day gain in two months on rating agency concerns withered the already fragile sentiment. French daily La Tribune reported Standard & Poor's could change its outlook on France's AAA rating to negative, while Moody's said it could downgrade the subordinated debt of 87 banks across 15 countries on concerns that governments would be too cash-strapped to bail them out.

Back on home turf, retail stocks such as those of Pantaloon Retail, Shoppers Stop, Trent and Koutons bore the brunt of profit booking for second consecutive session as they slid in the range of 2-11% after Government failed to break impasse on retail reform with opposition parties, demanding a rollback of a reform allowing foreign supermarket giants to enter the country's $450 billion market. The reform, which allowed global chains like Wal-Mart Stores Inc and Carrefour to own up to 51 percent of retail ventures, remains in limbo as talks between the government and political parties failed to make any breakthrough. However, what really perturbed the sentiment of Dalal Street right from the inception of the trade were the stocks of Index heavyweight- Reliance Industries-which took a nasty laceration of over 2% after the company initiated the arbitration proceeding against the Petroleum & Natural Gas Ministry owing to the latter's intention to restrict some of the expenditure that can be recouped by the company from the flagging KG-D6 gas fields. Meanwhile, added to the jinx, were the stocks of Oil & Gas major-ONGC- which besides dipping over 1%, also dragged the index pivotal lower by 1.85%.

On the other hand, resilience of defensive FMCG counter along with selective bets in Healthcare and rate sensitive Auto pocket aided benchmarks in pruning losses.  However, the stock that topped wall of fame was the stock of real estate developer- DB Realty which accumulated over a whopping 8% after its managing director -Shahid Usman Balwa- was given bail. Thus, the market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1223:1495 while 134 scrips remained unchanged.

The BSE Sensex lost 173.31 points or 1.07% and settled at 15,993.82. The index touched a high and a low of 16,210.37 and 15,952.54 respectively. 10 stocks advanced against 20 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.63% while Small-cap index was down 0.20%. (Provisional)

On the BSE Sectoral front, FMCG up 0.38%, Auto up 0.31% and HealthCare up 0.20% were the only gainers while Realty down 2.65%, Bankex down 1.99%, Oil & Gas down 1.97%, Metal down 1.61% and Consumer Durables down 1.55% were the top losers.

The top gainers on the Sensex were Bajaj Auto up 2.52%, Hero MotoCorp up 1.53%, M&M up 1.46%, Cipla up 1.19% and HUL up 1.14%.

On the flip side, Jindal Steel down 4.31%, Bharti Airtel down 3.98%, DLF down 3.53%, Sterlite down 2.76% and RIL down 2.46% were the top losers on the index. (Provisional)

Meanwhile, Petrol prices are likely to be reduced by another up to Re 1 per litre this week, on the back of declining trend seen in the global prices. The Oil marketing companies (OMCs), which are free to decide petrol prices, had announced a cut of Rs 2.22 a litre earlier this month, the first reduction in retail prices in nearly three years and the first since prices were decontrolled in June 2010.

Nevertheless, the price of aviation turbine fuel (ATF) is expected to rise by around 3% from the existing Rs 62,310 per kilolitre in Delhi, putting further pressure on loss-making airlines. On diesel too, the losses of companies are expected to increase by another Rs 2 a litre from the current Rs 10.17 a litre. Internationally, both ATF and diesel are having a price trend different to petrol.

According to industry expert, the international petrol price trend for this fortnight can allow the OMCs to make a cut of up to Re 1 a litre, inclusive of taxes. This is despite a further weakening of the rupee against the dollar in the current fortnight. Compared to an average Rs 49.6 against the dollar in first fortnight of the month, the rupee has averaged Rs 51.6 this fortnight. However, the international price drop is steeper, making a price cut possible.

Normally the OMCs monitor petrol prices on a fortnightly basis. They work out the prices based on their trade parity (80 per cent import price weight and 20 per cent export price weight) for the previous fortnight. Ever since the decontrol, petrol prices have risen nearly 39% to Rs 66.42 a litre in Delhi. In the same period, diesel, which is still regulated, saw prices increase by 7.4% to Rs 40.9 a litre. The gap between petrol and diesel prices, which used to be 25.8% before the decontrol, has now extended to 66.42%.

The widening price gap between petrol and diesel has slowed the growth of petrol consumption, which has recently fallen behind that of diesel. Compared to double-digit growth in recent years, consumption of petrol has been growing at 4.8%, while that of diesel has been growing at 5.9%.

India VIX, a gauge for market’s short term expectation of volatility gained 0.86% at 26.87 from its previous close of 26.64 on Monday. (Provisional)

The S&P CNX Nifty lost 53.60 points or 1.10% to settle at 4,797.70. The index touched high and low of 4,866.10 and 4,787.10 respectively. 15 stocks advanced against 35 declining ones on the index. (Provisional)

The top gainers on the Nifty were Dr Reddy up 2.47%, Bajaj Auto up 2.23%, M&M up 1.94%, Hero MotoCorp up 1.81% and HUL up 1.78%.

On the other hand, PNB down 4.24%, Jindal Steel down 3.89%, Bharti Airtel down 3.77%, DLF down 3.63% and ACC down 3.46% were the top losers. (Provisional)

The European markets are trading on a mix note, with France's CAC 40 up 0.35%, Germany's DAX up 0.27% and FTSE 100 down 0.26%.

Majority of stock markets in Asia sustained the positive momentum in Tuesday trades as investors took heart in an undervalued market amid hopes that the Euro-zone policy makers are pushing towards new measures to rescue the currency union from a terrible debt debacle. Sentiments in the region got filliped on the back of a welcome change of direction for Wall Street which rallied sharply overnight after registering around four percent losses last week. Investors also were hopeful that Germany and France are discussing a deal to fast-track European budget and financial coordination that does not require renegotiating European Union treaties which could reassure the financial markets.

The benchmark in South Korea was the leading gainer in the region as it traded with strong gains of around one and half a percent thanks to the rally in technology counter which got underpinned by records sales during the Thanksgiving weekend. Shares in Tokyo too climbed by around a percent, led by the sharp upmove in shipping and steelmaker names.

Shanghai Composite rose 13.27 points or 0.56% to 2,396.30, Hang Seng gained 59.87 points or 0.33% to 18,097.68, Jakarta Composite advanced 16.81 points or 0.46% to 3,663.86, KLSE Composite ascended 12.43 points or 0.87% to 1,443.98, Nikkei 225 amassed 67.43 points or 0.81% to 8,354.92, Seoul Composite surged 25.55 points or 1.41% to 1,840.83 and Taiwan Weighted climbed 51.30 points or 0.74% to 6,950.08.

On the flipside only Straits Times eased 2.34 points or 0.09% to 2,692.09.