Post Session: Quick Review

Not underestimating the impact of reduced liquidity after Fed’s gradual conditioned taper decision, Indian equity markets, unlike rest of the global peers, witnessed sharp correction of over 3/4th of a percent on Thursday. The rally on account of euphoria witnessed after RBI unexpectedly left key policy rates unchanged despite multi-month high inflation, fizzled out in today’s trading session on Fed’s decision, despite dovish tone stroke by Fed’s chairman Ben Bernake in his last press conference. Additionally, lack of fresh triggers at domestic market, also led benchmarks stage some correction. However, in-line with global peers, benchmark equity indices did get to a gap-up start, but failed to sustain the momentum thereafter and slipped in negative territory. Nevertheless, some recovery was witnessed in early afternoon deals, with the positive start of European markets which aided the barometer gauges trim some of its early losses. By the close of trade, both Sensex and Nifty, ended above the crucial 20,700 and 6,150 bastions respectively. Meanwhile, broader indices although surrendered to profit-booking, but losses were limited to the extent of one tens of percent.

On the global front, Asian pacific shares rallied on Thursday after the US central bank promised to hold interest rates close to zero even as it decided to taper its $85 billion a month in bond purchases, by $10 billion starting in January 2014- a step the U.S. economy could well withstand. The stocks also surged after Federal Reserve Chairman Ben Bernanke said the Fed will take 'similar moderate steps' throughout next year to reduce the purchases further if the economy shows continued improvement. Mirroring the similar undertone, European markets also were trading in positive territory.

Closer home, local bourses also managed to cut back some of its losses on optimistic statements made by Finance Minister, who in an attempt to shore-up investors’ confidence after US Federal Reserve announced to trim down its aggressive bond-buying program by $10 billion a month, reiterated that the government was committed to take all necessary steps to revive growth, boost investments and create conducive business environment. In the pullback rally, most of the sectoral indices ended in red, barring Information Technology, HealthCare Metal counters that managed to showcase resilience, ending with gains of over half a percent. Depreciation of Indian rupee and signs of improvement of US economy, mainly worked well for Information Technology stocks that derive major share of their revenue from exports. On the flip side, Banking, Capital Goods and Oil & Gas counters were the major pockets of weakness among remaining sectoral indices. Hopes that RBI would act in next policy meeting in January, if the expected softening of food inflation does not materialises and translates into a significant reduction in headline inflation in the next round of data, dragged the banking shares lower. However, telecom stocks ended mixed after a draft note prepared was prepared by department of telecommunications on spectrum sharing, to allow telecom companies to share 2G spectrum with each other as long as their combined holding is not more than 50% of the total airwaves allotted in that region. The market breadth on the BSE ended in red; advances and declines were in a ratio of 1126: 1292, while 156 scrips remained unchanged. (Provisional)

The BSE Sensex lost 147.51 points or 0.71% to settle at 20712.35.The index touched a high and a low of 21017.45 and 20646.03 respectively. Among the 30-share Sensex, 11 stocks gained, while 19 stocks declined and one stock remains unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.22% and 0.11% respectively. (Provisional)

On the BSE Sectoral front, IT up by 1.88%, Teck up by 1.35%, Healthcare up by 1.21% and Metal up by 0.25%, were the gainers, while Bankex down by 2.46%, Capital Goods down by 1.90%, PSU down by 1.48%, Oil & Gas down by 1.37% and Power down by 1.06% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 3.08%, Cipla up by 2.15%, Wipro up by 2.14%, SSLT up by 1.76% and Infosys up by 1.64%, while, ICICI Bank down by 3.21%, L&T down by 2.88%, ONGC down by 2.78%, HDFC down by 2.56% and HDFC Bank down by 2.31% were the top losers in the index. (Provisional)

Meanwhile, besides committing more steps to boost economy, Finance Minister highlighted that the initiatives taken by the government in the past one year are expected to fetch result as this would do its bit to boost investment and revive the sagging growth. In an attempt to shore-up investors’ confidence after US Federal Reserve announced to trim down its aggressive bond-buying program by $10 billion a month, the Finance Minister reiterated  that the government was committed to take all necessary steps to revive growth, boost investment, create conducive business environment, improving efficiency and depth of the markets, wider participation of investors and strengthening of the regulatory and institutional framework to channelize greater investments and to achieve potential growth of the Indian economy.

Listing out the initiatives taken by the government in the past one year to boost growth, Finance Minister underscored that the economy is headed towards gradual recovery and growth stabilization, after slipping to a decade’s low level of 5% in 2012-13. He highlighted that the government in consultation with RBI and SEBI made concerted efforts and instituted several measures to attract off-shore portfolio investment and improve investors' appetite.

Further, on account of policies to promote inclusive growth, FM unveiled that the proportion of people living below the poverty line declined from 37.2% in 2004-05 to 21.9% in 2011-12 and also added that this decline, had been at a much faster rate than the previous decades. Additionally, he underscored that Cabinet Committee on Investment (CCI), in order to boost investment, de-bottlenecked 200 projects, while Project Monitoring Group (PMG) had resolved 93 projects with total estimated cost of Rs 3.53 lakh crore.

Lastly, he also brought to light the initiatives, like settling up of Infrastructure Debt Funds (IDF), authorising PSUs to issue tax-free bonds, enhancement of the FII limits, among others to boost investment and growth.India VIX, a gauge for markets short term expectation of volatility lost 5.47% at 16.58 from its previous close of 17.62 on Wednesday. (Provisional)

The CNX Nifty lost 47.10 points or 0.76% to settle at 6,170.05. The index touched high and low of 6,263.75 and 6,150.70 respectively. Out of the 50 stocks on the Nifty, 14 ended in the green, while 36 ended in the red.

The major gainers of the Nifty were HCL Tech up 2.32%, Maruti Suzuki up by 3.12%, Ranbaxy up by 2.38%, Lupin up by 2.30% and Wipro up by 2.26%. The key losers were Kotak Bank down by 3.63%, ICICI Bank down by 3.04%, ONGC down by 2.86%, L&T down by 2.74% and HDFC down by 2.54%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 1.38%, the United Kingdom’s FTSE 100 up by 0.85% and Germany’s DAX up by 1.39%.

The Asian markets concluded Thursday’s trade mostly in green with Japanese stocks closing at the highest level since November 2007 after the Federal Reserve announced plans to begin tapering its monthly bond-buying program. The US Federal Reserve’s move to pare back its bond-buying program signals that the world’s biggest economy is improving. Indonesia’s rupiah fell to a five- year low and government bonds dropped. Japanese Ministry of Economy, Trade and Industry stated that Japan’s All Industries Activity Index fell to a seasonally adjusted -0.2%, from 0.4% in the preceding month.

Shanghai again led China’s house-price increases in November as a rebound in demand offset government measures to curb the market. The National Bureau of Statistics said prices for new residential properties, excluding government-funded affordable housing, rose year on year in all but one of the 70 major cities it tracks, unchanged from October and September. In Shanghai, prices surged 21.9% from a year earlier, after gaining 21.4% in October. The city was followed by an increase of 21.1% in Beijing, 21.0% in Shenzhen and 20.9% in Guangzhou, all so-called tier-1 cities.