Post Session: Quick Review

On the penultimate session of F&O expiry, Indian equity markets swung between gains and losses, finally making a negative close in absence of any positive trigger. The pre-holiday session remained a lackluster one, with barometer gauges oscillating in tight range for day the as investors preferred cashing out their profits on Christmas Eve, with just a few sessions remaining before the end of the calendar year 2013. Volatility played out largely on the penultimate session of F&O expiry, taking the markets lower near day’s lowest point by the end of trade. Both, Sensex and Nifty, after day of consolidation, ended below the crucial 21,100 and 6,300 levels respectively, with loss of around quarter of a percent. However, broader markets remained in festive mood and ended the session with gains of over half a percent.

On the global front, Asian stocks crept cautiously higher on Monday encouraged by record highs on Wall Street, though an on-going credit squeeze in China kept the gains under check. Meanwhile, European stocks inched up on Tuesday, adding to a sharp rally in the past four sessions, although trading in the shortened session was thin.

Closer home, amidst across the board selling pressure, stocks from Capital Goods, Consumer Durable and Realty counters, proved to be exceptions. However, much of the selling pressure was exerted by stocks from Metal, Banking and Oil & Gas counters that emerged as top laggards of the session. Additionally, power stocks, viz Tata Power, Torrent Power, Adani Power and Reliance Power too witnessed heavy profit-booking. In a related development, the government is working on a proposal where separate entities would handle electricity supply and distribution. Meanwhile, banking stocks slipped after RBI governor reiterated that managing inflation was its top priority, bolstering hopes that RBI would hike rates in its third quarter monetary policy review on January 25. The market breadth on the BSE ended in green; advances and declines were in a ratio of 1444: 1026, while 166 scrips remained unchanged. (Provisional)

The BSE Sensex lost 71.12 points or 0.34% to settle at 21029.91.The index touched a high and a low of 21156.92 and 21010.65 respectively. Among the 30-share Sensex, 22 stocks gained, while 28 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.56% and 1.02% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 0.60%, Consumer Durables up by 0.18% and Realty up by 0.09%, were the only gainers, while Metal down by 1.18%, Bankex down by 0.49%, Oil & Gas down by 0.23%, FMCG down by 0.18% and Power down by 0.13% were the top losers in the space. (Provisional)

The top gainers on the Sensex were BHEL up by 2.13%, Bajaj Auto up by 1.91%, Dr Reddys Lab up by 0.77%,  L&T up by 0.59% and NTPC up by 0.55%, while, Tata Power down by 2.98%, SSLT down by 2.46%, Wipro down by 2.06%, Sun Pharma down by 1.76% and Cipla down by 1.54% were the top losers in the index. (Provisional)

Meanwhile, in light of front loading of expenditure that has resulted in 84.4% of the budgeted fiscal deficit target being hit by November, Ratings agency Crisil anticipates the government to overshoot its 4.8 percent fiscal deficit target by 0.40 percent to 5.2 percent this fiscal. However, the rating agency has suggested that the Union Government could reduce its fiscal prices by 0.20% of the gross domestic product (GDP), or as much as Rs 20,000 crore, by using cash reserves of public sector units (PSUs).

As per credit rating agency, top 20 PSUs, by cash holding, will have an estimated pre-dividend corpus of around Rs 1,60,000 crore by March 31, 2014. Crisil expects these companies to be comfortably placed to pay special dividends of Rs 27,000 crore over and above their normal dividend payouts, without impacting on the capex plans. Further, these companies are anticipated to be well placed to distribute 40% of the corpus or Rs 64,000 crore as dividend.

On the fiscal deficit front, its president for research flagged concerns over the revenue collections from the taxation front and also about the government not being able to achieve its Rs 40,000 crore divestment target. In such a case, it highlighted cash reserves of PSUs to be an alternative source of income.

India VIX, a gauge for markets short term expectation of volatility lost 3.07% at 15.76 from its previous close of 16.26 on Monday. (Provisional)

The CNX Nifty lost 17.50 points or 0.28% to settle at 6,267.00. The index touched high and low of 6,301.50 and 6,262.00 respectively. Out of the 50 stocks on the Nifty, 22 ended in the green, while 28 ended in the red.

The major gainers of the Nifty were Ranbaxy up 2.75%, Bajaj-Auto up by 2.33%, BHEL up by 2.30%, UltraTech Cement up by 1.82% and PNB up by 1.71%. The key losers were Tata Power down by 3.26%, Wipro down by 2.29%, SSLT down by 2.28%, Bank of Baroda down by 1.91% and Sun Pharmaceuticals down by 1.78%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.23%, the United Kingdom’s FTSE 100 up by 0.40% and Germany’s DAX up by 0.94%

The Asian markets barring Taiwan Weighted concluded Tuesday’s trade in green with Japanese shares touching a six-year high, helped by a weaker yen and propelled steadily upward as investors looked to developed Asia for returns, indicating growing faith in Japan’s reform agenda. China’s interbank money rates rose yesterday despite the central bank’s injection of 300 billion yuan ($49.1 billion) last week because banks need to amass cash to meet year-end regulatory requirement. China’s local government debt may have doubled in the previous two years to an alarming level of nearly 20 trillion yuan ($3.3 trillion) by the end of 2012. The combined debt of central and local governments totaled nearly 28 trillion yuan, or 53% of last year’s gross domestic product.

Besides, home prices in the largest cities may peak in the first quarter and drop at the end of next year. The price of homes in large Chinese cities continued to rise from a year earlier in November. New home prices increased month on month in 66 of the 70 major cities monitored by the government last month, up from 65 in October. In Hong Kong, overall consumer prices rose 4.3% year-on-year in November, matching October’s figure. Netting out the effects of the Government’s one-off relief measures, the underlying inflation rate was 4%, also matching October’s figure.

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