Benchmarks end lower for fourth straight day on disappointing IIP and CPI data

Friday turned out to be a daunting session of trade for the Indian stock markets, which extended the southbound journey for fourth consecutive day and gave up over a percentage point as investors reacted negatively to the double whammy of contraction in IIP and surge in Consumer Price Index. India’s annual industrial output growth, measured by index of industrial production (IIP), contracted by 1.8% at 168.5 in the month of October over the corresponding month of previous year. Moreover, CPI (Combined) for November 2013 on point to point basis surged to nine months high level at 11.24%.

After a negative opening, the domestic bourses never looked in recovery mood and continued sliding till end as some pessimism came in from Reserve Bank of India’s (RBI) Governor Raghuram Rajan’s statement that inflation was higher than the central bank’s comfort zone, while growth was weaker than estimated and vowed to calibrate policy carefully. Selling was both brutal and wide based as, barring software, none of sectoral indices on BSE were spared.

Weak closing in US markets overnight too dampened the sentiments as investors remained concern on fears of Fed scaling back its stimulus program in the near future after a report showed slightly stronger than expected retail sales growth in the month of November. However, Asian shares ended mostly positive, led by the gains of Nikkei index as yen resumed its decline, while European counters too traded in the green terrain in early deals.

Back home, sentiments also remained down-beat after Indian rupee fell and bonds yields surged on Friday after retail inflation spiked. On the currency front the rupee was at 62.20 per dollar at the time of equity markets closing as against previous close of 61.83 per dollar. Selling in banking stocks too dampened the sentiments 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 NSE’s 50-share broadly followed index Nifty declined by around seventy points, to end below psychological 6,200 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around two hundred and ten points, to end below the psychological 20,800 mark.

Moreover, broader markets too struggled for traction through the day and ended the session in the red with a cut of around a percentage point. The market breadth remained in favor of decliners, as there were 883 shares on the gaining side against 1,575 shares on the losing side, while 152 shares remained unchanged.

Finally, the BSE Sensex declined by 210.03 points or 1.00%, to settle at 20715.58, while the CNX Nifty plunged by 68.65 points or 1.10% to settle at 6,168.40.

The BSE Sensex touched a high and a low of 20867.17 and 20692.67, respectively. The BSE Mid cap index was down by 1.26%, while the Small cap index lost 0.95%.

The top gainers on the Sensex were Tata Motors up 2.68%, Wipro up 1.63%, Tata Steel up 0.72%, Coal India up 0.71%, and Mahindra & Mahindra up 0.61%, on the flip side ICICI Bank down 4.12%, BHEL down 4.06%, Hero MotoCorp down 2.98%, Tata Power down 2.52%, and Gail India down 2.47%, were the top losers on the index.

On the BSE Sectoral front, Bankex down by 2.25%, Power down by 2.22%, Realty down by 2.10%, Capital Goods down by 1.86%, and PSU down by 1.41%, were the top losers on the sectoral front. While IT up by 0.14 point, was only the gainer.

Meanwhile in order to efficiently track fund flow under the various government schemes, the cabinet has approved Central Plan Scheme Monitoring System, which will set up an online financial management information and decision support system for tracking funds.

The Central Plan Scheme Monitoring System will be rolled out over a period of four years till 2017 at a total outlay of Rs 1,080 crore and will link the financial networks of central, state governments and the agencies of the state governments.

Further, new system will also provide real time reporting of expenditure at all levels of programme implementation through treasury and bank interface. The plan monitoring organisation structure will comprise the Project Implementation Committee (PIC) at the apex level, Central Project Management Unit (CPMU) at the centre, State Project Management Unit (SPMU) at state level and and District Project Management Units (DPMU) at the state and district levels.

In a separate development, the government has also approved the proposed Draft Regulatory Reform Bill, 2013 which aims to make regulators across key infrastructure sectors accountable to the Parliament besides giving them power of licensing. The draft bill will apply to key sectors such as electricity, oil and gas, coal, telecommunications and internet, among others.

The CNX Nifty touched a high and low of 6,208.60 and 6,161.40 respectively.

The top gainers on the Nifty were Tata Motors up by 2.73%, Wipro up by 1.82%, Mahindra & Mahindra up by 1.30%, Coal India up by 0.98%, and Tata Steel up by 0.90%, On the other hand, Jaiprakash Associates down by 5.26%, BHEL down by 4.06%, ICICI Bank down by 3.85%, UltraTech Cement down by 3.82%, and IndusInd Bank down by 3.68%, were the top losers.

Most of the European markets were trading in green, France's CAC 40 was up by 0.08%, and Germany's DAX was up by 0.13%, while United Kingdom's FTSE 100 was down by 0.05%.

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.