Post Session: Quick Review

In the final session of trade, Indian equity markets, extending its losing streak to fourth straight session, witnessed a nasty blow of over a percent and concluded below the crucial 20,800 (Sensex) and 6,200 (Nifty) levels respectively. Thus, with four straight sessions of downtrend, Sensex and Nifty, for the week witnessed a loss of over a percent. In today’s trading session, murky set of macro-economic data, which cemented hopes of third rate hike in RBI’s upcoming monetary policy in the coming week that led to heavy drubbing in banking stocks, mainly deterred sentiments. This combined with fears that US Federal Reserve may scale back its stimulus as early next week, also took the left over steam from the equity markets, which right from the start of the trade appeared exhausted. Today’s trade was no different than the previous two sessions’, when the equity markets witnessing bouts of selling pressure concluded near day’s lowest point. Meanwhile, on the macro-front, in a double whammy of the economy, while November retail inflation data ascended to nine months high level at 11.24%, October factory output data shrinking for the first time four months, contracted 1.8% against growth figure of 2%.

The broad based selling at Indian equity markets was witnessed despite the positive global set-up. Asian shares ended mostly positive, led by the gains of Nikkei index as yen resumed it’s decline. Additionally, European shares too edged higher even as investors speculated over when the U.S. Federal Reserve could unwind its bond-buying program.

Back on the home turf, Rupee’s depreciation past ‘62/$’ level also spelt pessimism for Indian equity markets and also failed to provide some relief to Information Technology stocks that ended lower, albeit with slender losses. In the sea of red, stocks from Banking, Power and Realty counters were the worst hit of the session. Banking stocks were beaten blue in trade as investors lightened their bets in this space ahead of RBI’s monetary policy in the coming week, precisely on December 18. Additionally, fertilizer stocks that witnessed some buying in the intra-day trade after Cabinet Committee on Economic Affairs (CCEA) approved an Rs 4,800 crore subsidy for the sector, too edged lower by the end of the trade. The market breadth on the BSE ended in red; advances and declines were in a ratio of 892: 1568, while 150 scrips remained unchanged. (Provisional)

The BSE Sensex lost 191.08 points or 0.91% to settle at 20734.53. The index touched a high and a low of 20867.17 and 20692.67 respectively. Among the 30-share Sensex, 6 stocks gained, while 24 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.19% and 0.93% respectively. (Provisional)

On the BSE Sectoral front, IT up by 0.12% was the only gainer, while Bankex down by 2.37%, Power down by 2.18%, Realty down by 1.95%, Capital Goods down by 1.77% and PSU down by 1.19% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.61%, Wipro up by 1.73%, Coal India up by 1.05% and Mahindra & Mahindra up by 0.92%, while, BHEL down by 4.09%, ICICI Bank down by 3.76%, Hero MotoCorp down by 2.98%, Tata Power down by 2.69% and HDFC down by 2.36% were the top losers in the index. (Provisional)

Meanwhile, in a double whammy for the policy makers, the provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) for November 2013 on point to point basis (November 2013 over November 2012) accelerated to nine-month high level at 11.24%, much higher than expectation of over 10% figure and also higher as compared to 10.17% for the previous month of October 2013. The corresponding provisional inflation rates for rural and urban areas for November 2013 stood at 11.74% and 10.53% respectively, compared to 10.19% and 10.20% respectively in October.

The surge in retail Inflation was mainly on account of spike up in food inflation, which accelerated to 14.72% against 12.56% in October, as vegetable prices rose by 61.6% in November from a year earlier, compared with a 45.67% increase in the previous month. Meanwhile, Fuel and Light; Clothing, bedding and foot-ware segment registered growth of 7.00% and 8.94% over a period ago.

This data came as a rude shock for the economy grappling to deal with its soaring inflation amidst slower industrial growth, which contracted by 1.8% in October, as this strengthens the case of Reserve Bank of India (RBI) hiking its base rate by another 25 basis points in its upcoming third monetary policy review on December 18. Meanwhile, Reserve Bank of India’s governor Raghuram Rajan, last month underscored high inflation warranted an appropriate policy response after raising the key repo rate for the second time in as many months in October to 7.75%.

India VIX, a gauge for markets short term expectation of marginally gained 0.56% at 17.84 from its previous close of 17.74 on Thursday. (Provisional)

The CNX Nifty lost 65.25 points or 1.05% to settle at 6,171.806. The index touched high and low of 6,208.60 and 6,161.40 respectively. Out of the 50 stocks on the Nifty, 7 ended in the green, while 43 ended in the red.

The major gainers of the Nifty were Tata Motors up 2.72%, Wipro up by 1.80%, M&M up by 1.04%, Coal India up by 0.89% and Tata Steel up by 0.76%. The key losers were JP Associate down by 5.54%, BHEL down by 4.03%, ICICI Bank down by 3.94%, UltraTech Cement down by 3.71% and PNB down by 3.59%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.01%, the United Kingdom’s FTSE 100 up by 0.05% and Germany’s DAX up by 0.24%.

The Asian markets concluded Friday’s trade mostly in green with Japanese shares led higher as the dollar edged towards a multi-year high against the yen. The weakness in the yen helped Japanese stocks rise, with the Nikkei Average putting the index up 1.2% since last Friday - the best-performing regional market for the week. Indonesia’s central bank stated that it could buy Japanese government bonds (JGB) and bond repurchase agreements held by Japanese banks in the country to help bolster liquidity in the rupiah in case of a financial crisis. The unemployment rate in Singapore remained unchanged in the last quarter. Singapore Ministry of Manpower stated that Singaporean unemployment rate remained unchanged at 1.8%, from 1.8% in the preceding quarter.

In Hong Kong, the manufacturing industries industrial production index fell 0.9% in the third quarter year-on-year while the corresponding producer price index fell 5.2%, the Census & Statistics Department reported. Besides, main contractors’ construction works’ total gross value rose 5.1% in nominal terms in the third quarter over a year earlier to $40.9 billion. After discounting the price changes effect, the total gross value rose 0.3% in real terms over the same period.