Post Session: Quick Review

Indian equity markets took beating for third straight session of New Year. However, unlike previous two trading sessions, there was some recovery towards the fag end of trade that lifted the markets from day’s low level. Besides, negative global set-up, Prime Minister’s Manmohan Singh “accomplishments speech' also deterred sentiments. Markets, which were trading sluggish right from the start, took a turn for the worse on lack of announcement of any future trajectory to lift the economy from Prime Minister, who pulling out of the race of next PM, underscored that the economy was set for better times. Further, he added that all emerging economies, including India, faced slowdown in the past couple of years but the global growth cycle is turning for the better. Nevertheless, sentiment also remained downbeat after few reports suggested of government mulling hiking the quota of subsidized LPG cylinders to 12 per household in a year from the current limit of 9, a move which on implementation would definitely increase the subsidy burden. This combined with reports of government holding back the monthly increase in the diesel prices, with all eyes set on general election 2014, weighing heavily on Public Sector Oil Marketing Companies (OMCs) stocks, also dragged markets lower. Thus, by the close of trade, both Sensex and Nifty, although ended with loss of close to one tenth of a percent, but above the crucial 20,850 and 6,200 levels respectively. For the week, both Sensex and Nifty plunged over one and half percent. Meanwhile, broader indices for the session outperformed larger peers and went home with gains of over half a percent.

On the global front, Asian share markets treaded under water on Friday after on a bout of global risk aversion. On the flip side, European shares inched higher in cautious trading on Friday, led by retailers after.

Closer home, recovery of stocks from Banking, Fast Moving Consumer Goods and health Care counters, besides the massive gains of Technology firms stocks, mainly cut short some of the bourses’ losses. IT stocks witnessed splendid gains in trade after Indian rupee depreciated to  one month low level, below the crucial 62.50/$. On the flip side, amidst sea of red, stocks from Power, Capital Goods and Auto counters underperformed. Power stocks slipped after CCEA approved the proposal to amend the policy on mega power projects. As per the proposal, power generating firms can take benefit from this policy only after fulfilling certain mandatory conditions as the developer must tie up at least 65 percent of the installed capacity through competitive bidding and remaining 35 percent of the installed capacity should be through the regulated tariff. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1289: 1169, while 166 scrips remained unchanged. (Provisional)

The BSE Sensex lost 37.00 points or 0.18% to settle at 20851.33. The index touched a high and a low of 20885.18 and 20731.33 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.72% and 0.62% respectively. (Provisional)

On the BSE Sectoral front, IT up by 2.77%, Teck up by 0.90%, Realty up by 0.45%, Healthcare up by 0.27% and Consumer Durables up by 0.24% were the top gainers, while Power down by 1.69%, Capital Goods down by 1.55%, Metal down by 1.27%, Oil & Gas down by 1.19% and PSU down by 1.10% were the only losers in the space. (Provisional)

The top gainers on the Sensex were TCS up by 2.81%, Infosys up by 2.59%, Maruti Suzuki up by 1.90%, HDFC Bank up by 1.39% and Sun Pharma up by 1.09%, while, Tata Power down by 3.95%, Mahindra & Mahindra down by 3.73%, Tata Motors down by 2.68%,  L&T down by 2.07% and NTPC down by 2.04% were the top losers in the index. (Provisional)

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) has approved the proposal to amend the policy on mega power projects. Meanwhile, power generating firms can take benefit from this policy only after fulfilling certain mandatory conditions as the developer must tie up at least 65 percent of the installed capacity through competitive bidding and remaining 35 percent of the installed capacity should be through the regulated tariff. Meanwhile, policy guidelines were also modified in 1998, 2002 and 2006 to encourage power development in the North Eastern region and Jammu & Kashmir.

According to the amended Mega Power Policy, in order to avail the benefits of duty-free imports of equipments for thermal power projects of capacity of 1,000 MW and above, and hydro power projects of 500 MW and above, provisional mega power project status certificate along with a fixed deposit receipt from any scheduled bank must be submitted as a security for a term of 60 months, which was earlier for 36 months. Mega Power Policy allows mega power projects to tie up electricity sales to distribution utilities through long-term power purchase agreements.

Further, to encourage power development in Jammu & Kashmir, CCEA approved construction of a 220 kv transmission system from Alusteng in the Srinagar valley to Leh and inter- connection system for various sub- stations in J&K at a cost of Rs 1,788.41 crore. The project will be implemented through Power Grid Corp within 42 months from the date of release of the first installment of funds and the project cost will be borne by the central government and the J&K Government in the ratio of 95:5. After commissioning of the transmission system, Operation & Maintenance (O&M) and other related activities will be carry out by J&K Government at their own cost.

India VIX, a gauge for markets short term expectation of volatility lost 4.10% at 15.87 from its previous close of 16.15 on Thursday. (Provisional)

The CNX Nifty lost 10.00 points or 0.16% to settle at 6,211.15. The index touched high and low of 6,221.70 and 6,171.25 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 4.02%, Lupin up by 3.20%, TCS up by 2.63%, Infosys up by 2.32% and Maruti Suzuki up by 2.18%. The key losers were Tata Power down by 3.95%, M&M down by 3.73%, BPCL down by 2.71%, Tata Motors down by 2.51% and BHEL down by 2.30%. (Provisional)

The European markets were trading in green with, France’s CAC 40 was up 0.41%, Germany’s DAX was down 0.26% and UK’s FTSE 100 up 0.11%.

The Asian markets concluded Friday’s trade in red, following a negative lead from the US, while Hong Kong led the region lower as data pointed to a slowing expansion in China’s service sector. Thailand’s markets were also in focus as the country lurched further towards a political crisis. Japan’s Stock Exchange was closed for the day. China’s official nonmanufacturing Purchasing Managers' Index fell to 54.6 in December from 56.0 in November. The nonmanufacturing PMI covers services including retail, aviation and software as well as the real-estate and construction sectors. The report came just a day after regional sentiment took a hit from two separate reports which pointed to a deceleration in China’s manufacturing sector, raising concerns that Asia’s largest economy might be losing momentum.

Singaporean GDP fell to a seasonally adjusted 4.4%, from 5.8% in the preceding quarter. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of 8.5%, from 6.3% in the preceding month. Thailand’s CPI fell to a seasonally adjusted annual rate of 1.67%, from 1.92% in the preceding month. Indonesian Inflation rose to a seasonally adjusted 8.38%, from 8.37% in the preceding month.