Post Session: Quick Review

After getting some respite in the previous trading session, Indian equity markets yet again resumed their declining streak and concluded the session with loss of close to one tens of a percent, but above the crucial 20,700 (Sensex) and 6,150 (Nifty) levels respectively. Prevailing caution ahead of factory output data and Q3FY14 earnings of IT bellwether, Infosys through which official earning season will start, mainly kept the investors on the sidelines. Although, benchmarks for couple of times during the session broke out in green, the mood remained cautious in absence of any firm buying activity. Further, pessimistic regional counterparts also discouraged investors from going long into equities. Meanwhile, broader indices, which were outperforming larger peers in the first half of trading session, went home with bigger cut of over 3 /4 of a percent.

On the global front, Asian pacific shares wavered on Thursday after a lackluster performance on Wall ahead of key US jobs report data on Friday. Further, sentiment also took a hit on account of disappointing data from China. The consumer-price index rose 2.5% on year, meeting street’s expectations, but easing from a 3% gain in November. In addition, China's prices at the factory level fell once again in December, declining for the 22nd consecutive month-a sign of weakening demand in the economy. However, European shares were trading positive before policy meetings that could provide hints about future actions by the European Central Bank and the Bank of England.

Closer home, stocks from Realty, Capital Goods and Banking counters were the worst hit. On the flip side, much of the support crept in from stocks of Public Sector Undertaking (PSU), Oil & Gas, and Metal pivotal, which restricted the further fall of the markets. Additionally, shares of two gold financing companies, viz Muthoot Finance and Manappuram Finance, gained after the central bank allowed NBFC to lend up to 75% of the value of gold from 60% at present. Meanwhile, shares of state run Oil Marketing Companies (OMC), viz, BPCL, HPCL and IOC were in demand despite reports suggesting Oil ministry considering partial rollback of price hike in bulk diesel. On the flip side, stocks like Gokul Refoils & Solvent, Sanwaria Agro, Ruchi Soya and JVL Agro Industries edged lower in trade on reports of CCEA considering proposal to hike import duty hike on refined edible oil to 10%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1156: 1393, while 140 scrips remained unchanged. (Provisional)

The BSE Sensex lost 9.35 points or 0.05% to settle at 20720.03. The index touched a high and a low of 20778.13 and 20652.69 respectively. Among the 30-share Sensex, 11 stocks gained, while 18 stocks declined and one stock remain unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.81% and 0.74% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 1.09%, Oil & Gas up by 0.85%, PSU up by 0.83%, Healthcare up by 0.48% and IT up by 0.45% were the top gainers, while Realty down by 2.26%, Capital Goods down by 2.03%, Bankex down by 0.72%, Auto down by 0.66% and Consumer Durables down by 0.59% were the only losers in the space. (Provisional)

The top gainers on the Sensex were SSLT up by 4.36%, NTPC up by 3.20%, Coal India up by 2.75%, ONGC up by 2.65% and Dr Reddys Lab up by 2.29%, while, L&T down by 2.61%, Axis Bank down by 2.29%, Hindalco Industries down by 2.21%, Mahindra & Mahindra down by 1.74% and Maruti Suzuki down by 1.48% were the top losers in the index. (Provisional)

Meanwhile, in the view of moderation in the growth of gold loan portfolios of Non-Banking Financial Companies (NBFCs) in the recent past, the Reserve Bank of India (RBI) has allowed NBFCs to lend against gold jewellery up to 75 percent of Loan-To-Value (LTV) of metal from 60 percent at present.

The RBI further noted that the value of the jewellery for the purpose of determining the maximum permissible loan amount will be only the intrinsic value of the gold content excluding the other cost elements such as making charges. Further, the central bank clarified the need to give a certificate on the purity of gold cannot be dispensed. The certified purity should be applied for determining the maximum permissible loan and the reserve price for auction.

The NBFCs can include suitable caveats to protect themselves against disputes on redemption. Earlier, NBFCs had raised concerns over certification of the purity of gold jewellery accepted as collateral and underscored that under the current practices it was possible only to arrive at the proximate purity of the gold and such a certification could lead to dispute with the borrowers.  India VIX, a gauge for markets short term expectation of marginally lost 0.85% at 16.18 from its previous close of 16.32 on Wednesday. (Provisional)

The CNX Nifty lost 3.45 points or 0.06% to settle at 6,171.15. The index touched high and low of 6,188.05 and 6,148.25 respectively. Out of the 50 stocks on the Nifty, 19 ended in the green, while 31 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were SSLT up 4.44%, HCL Tech up by 3.20%, NTPC up by 3.05%, ONGC up by 2.86% and Coal India up by 2.79%. The key losers were JP Associate down by 4.22%, ACC down by 2.78%, L&T down by 2.61%, Ambuja Cements down by 2.35% and Hindalco down by 2.21%. (Provisional)

The European markets were trading in green; France’s CAC 40 was up 0.29%, Germany’s DAX was up 0.37% and UK’s FTSE 100 was up 0.31%.

The Asian markets barring Jakarta Composite concluded Thursday’s trade in red with Japan giving away much of its gains from the previous session, while Chinese inflation data kept Hong Kong sentiment in check. China’s consumer-price inflation slowed in December, while deflation for wholesale prices held steady. The consumer price index (CPI) rose 2.5% from a year earlier, slowing from a 3% gain in November, the National Bureau of Statistics stated. Prices were 0.3% higher versus the previous month, swinging from a 0.1% drop. Chinese Producer price inflation remained unchanged at an annual rate of -1.4%, from -1.4% in the preceding month. The inflation figures came after some disappointing economic numbers from China earlier in the month that pointed to decelerating activity in both the services and manufacturing sectors.

China’s gross domestic product for 2012 has been revised to 51.947 trillion yuan ($8.58 trillion), 52.8 billion yuan higher than the preliminary reading released last September. The revised GDP growth remains unchanged at 7.7 percent. Malaysian Industrial Production rose to a seasonally adjusted annual rate of 4.4%, from 1.7% in the preceding month.