Post Session: Quick Review

Extending its five consecutive sessions’ declining streak, Indian equity markets witnessed profit-booking yet again on Tuesday on account of prevailing caution ahead of Reserve Bank of India's meeting on Wednesday, where it is likely to raise rates for the third time in four months and ahead of a key US Federal Reserve policy decision later this week. By the close of trade, both Sensex and Nifty, ended with loss of over quarter of a percent and ended below the crucial 20,650 and 6,150 levels respectively. Meanwhile, broader indices too following the suit ended with losses, albeit slender.

Bout of profit-booking which was witnessed in the last hour of trade mainly dragged the benchmarks lower for yet another session, which otherwise remained in positive zone for the most part on the back of positive global set-up. On the global front, Asian stock markets moved mostly higher on Tuesday as upbeat economic data from the U.S. and Europe lifted investor confidence ahead of the Federal Reserve's policy meeting. On the flip side, European shares fell on Tuesday, trimming some of the previous session's gains as investors were on the edge ahead of a Federal Reserve policy meeting at which the central bank could decide to start trimming its stimulus.

Closer home, amidst across the board selling pressure, stocks from banking, power and realty pivotals took most of the beating, while those from Healthcare, Consumer Durables and Fast Moving Consumer Goods counters, bucking the negative trend, emerged as the top gainers. Meanwhile, sugar stocks, viz Balrampur Chini,  Bajaj Hindusthan and Triveni Engineering, gained after CCEA circulate draft note on sugar relief package. The market breadth on the BSE weighed more on the negative side; advances and declines were in a ratio of 1166: 1295, while 168 scrips remained unchanged. (Provisional)

The BSE Sensex lost 50.40 points or 0.24% to settle at 20609.12.The index touched a high and a low of 20784.03 and 20594.99 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.02% and 0.04% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 1.49%, Consumer Durables up by 0.90%, FMCG up by 0.81%, Teck up by 0.54% and Capital Goods up by 0.26%, were the top gainers, while Bankex down by 1.60%, PSU down by 0.86%, Power down by 0.81%, Realty down by 0.75% and Oil & Gas down by 0.59% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 4.41%, Cipla up by 2.88%, Sun Pharma up by 1.95%, TCS up by 1.42% and SSLT up by 1.20%, while, HDFC Bank down by 3.61%, Coal India down by 3.08%, NTPC down by 2.17%, HDFC down by 1.94% and  Bajaj Auto down by 1.57% were the top losers in the index. (Provisional)

Meanwhile, Rating agency, Fitch, in its report underscored that Indian banking sector, reeling under asset quality pressures, will continue to see difficult times in 2014 due to the weak macro environment. However, the rating agency has assigned ‘stable’ outlook for Indian banking sector, driven by revision in the sovereign outlook.

Further, the rating agency expects asset quality indicators for the domestic banks to deteriorate, and stressed assets to peak around 15% due to further weakening of the economic environment. Stressed assets of domestic banks were at 9.1% of total loans (which includes non-performing loans of 3.4% and restructured loan ratio of 5.7%) in FY'13 from 6.1% in FY'12.

The rating agency also noted that the stress tolerance of the banks had weakened, resulting in downgrade of viability rating (VR) at several state-owned banks recently. In its report, Fitch highlighted that while the state-owned banks, whose earnings and capital buffers did not kept pace with the significant asset quality deterioration, were likely to face more pressure on their VRs; private sector banks were better positioned to face the economic slowdown.

Nevertheless, it also pointed that full impact of protracted slowdown remained to be seen, adding that it had scaled down India’s economic growth forecast for 2013-14 to 4.8% (from 5.7%) and that a 5.8% growth forecast for 2014-15 could mean a revival, albeit at a slow pace.

India VIX, a gauge for markets short term expectation of volatility gained 2.91% at 18.36 from its previous close of 17.84 on Friday. (Provisional)

The CNX Nifty lost 15.40 points or 0.25% to settle at 6,139.30. The index touched high and low of 6,190.55 and 6,133.00 respectively. Out of the 50 stocks on the Nifty, 23 ended in the green, while 27 ended in the red.

The major gainers of the Nifty were Ranbaxy up 4.81%, Bharti Airtel up by 4.58%, Cipla up by 3.06%, Sun Pharmaceuticals up by 2.18% and NMDC up by 1.94%. The key losers were HDFC Bank down by 3.67%, Coal India down by 2.96%, NTPC down by 2.21%, HDFC down by 1.97% and Bajaj-Auto down by 1.73%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 down by 0.94%, the United Kingdom’s FTSE 100 down by 0.49% and Germany’s DAX down by 0.41%.

The Asian markets barring Shanghai Composite and Hang Seng concluded Tuesday’s trade in green as upbeat economic data from the US and Europe lifted investor confidence ahead of the Federal Reserve’s policy meeting. Indonesia’s bonds gained, pushing the 10-year yield to the lowest level in almost four weeks, on speculation Bank Indonesia’s decision to hold borrowing costs suggests inflation will slow. The Census and statistics department stated that Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3%, from 3.3% in the preceding month.

Chinese banks bought foreign exchange worth $164.7 billion last month while selling $128.1 billion, netting a surplus of $36.6 billion. It marked the fourth month of surplus since August, after a deficit in June and July. Besides, China’s holding of US debt surged past $1.3 trillion for the first time in October, worth nearly $1,000 per Chinese citizen