Post Session: Quick Review

Three months’ low December CPI data failed to retain cheer of Indian equity markets, witnessed in the previous trading session, thereby leading to a down day of performance on Tuesday. Although, bit of exuberance was staged by benchmarks in early deals, the euphoria soon fizzled out on prevailing caution ahead of crucial Wholesale Price Index (WPI) data that would provide final cues on RBI’s stance in its upcoming monetary policy review on January 28, 2014, with street expecting RBI to hold key interest rates for second successive monetary policy. Additionally, lack of supportive cues from global front also added to the downside of the bourses, which settled near day’s low, below the crucial 21,050 (Sensex) and 6250 (Nifty) levels respectively, with cut of close to half a percent. Meanwhile, broader indices, following suite, also ended with losses in the range of 0.15%-0.25%.

On the global front, Asian markets ended mixed on Monday after a worse-than-expected jobs report following the sell-off in the United States. Meanwhile, European stocks dropped in early trade on Tuesday, tracking sharp losses on Wall Street following a number of disappointing earnings and outlook statements that raised concern about profit growth. Shares in German drugs distributor Celesio tumbled 7.7 percent after suitor McKesson failed to get enough shares for its takeover bid to succeed.

Closer home, today’s losses didn’t come as much of a surprise, given some profit-booking was in-evitable after the previous sessions’ run-up rally of the bourses. However, amid across the board selling pressure, only stocks from Oil & gas and Health Care indices ended in green. On the flip side, Metal, Realty and Consumer Durables were the worst performers of the session. The stocks of retail firms took a beating a day after the Delhi government officially shut its doors to foreign-owned supermarket groups from setting up shop in the country's capital. Reacting to the news, Trent, Pantaloon, Future Retail, Shoppers Stop, Brandhouse Retail and Provogue slipped in the range of 1.25%-3.25%. Additionally, airline stocks failed to gain momentum despite reports suggesting of government easing restrictions that prevent its domestic airlines from flying on international services within a month, also benefitting start-ups set up by Singapore Airlines and Malaysia's AirAsia that aim to begin operations in 2014. Further, stocks of steel producers, including SAIL, RINL and Tata Steel, also dropped despite reports suggesting of Competition Commission ruling out case of alleged unfair trade practices against steel producers, due to insufficient evidence of cartelization in hiking prices. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1226: 1464, while 135 scrips remained unchanged. (Provisional)

The BSE Sensex lost 91.99 points or 0.44% to settle at 21042.22. The index touched a high and a low of 21154.76 and 21009.05 respectively. Among the 30-share Sensex, 11 stocks gained, while 19 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.28% and 0.14% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 0.75% and Oil & Gas up by 0.04% were the top gainers, while Metal down by 1.36%, Realty down by 1.31%, Consumer Durables down by 0.75%, PSU down by 0.57% and IT down by 0.56% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Cipla up by 2.09%, Dr Reddys Lab up by 1.21%, Infosys up by 0.77%, Coal India up by 0.60% and Hero MotoCorp up by 0.29%, while, Tata Steel down by 2.99%, SSLT down by 1.81%, TCS down by 1.70%, ICICI Bank down by 1.51% and Hindustan Unilever down by 1.45% were the top losers in the index. (Provisional)

Meanwhile, bringing some relief to the policymakers who have an arduous task of pulling the economy out of a stagflation-like situation, the provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) eased more than the street's expectation, at a three-month low level of 9.87% for December 2013 on point to point basis, as compared to record high level of 11.24% for the previous month of November 2013, which was revised to 11.16%.

The corresponding provisional inflation rates for rural and urban areas for December 2013 are 10.49% and 9.11% respectively. Inflation rates (final) for rural and urban areas for November 2013 are 11.66% and 10.53% respectively.

The drop in retail inflation was mainly on account of food inflation, which eased to 12.16% against 14.72% in November, though vegetable prices rose by 38.76% in December from a year earlier, compared with a 61.6% increase in the previous month. Meanwhile, Fuel and Light; Clothing, bedding and foot-ware segment registered growth of 6.98% and 9.25% over a period ago.

The latest data further fuels the case for RBI keeping its key interest rates on hold for a second successive month at its policy review on January 28, after November factory output, disappointed the street for second consecutive month, by further contracting 2.1%.

India VIX, a gauge for markets short term expectation of marginally lost 1.31% at 15.74 from its previous close of 15.95 on Monday. (Provisional)

The CNX Nifty lost 26.65 points or 0.42% to settle at 6,246.10. The index touched high and low of 6,280.35 and 6,234.15 respectively. Out of the 50 stocks on the Nifty, 14 ended in the green, while 35 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Cipla up 2.10%, Lupin up by 1.92%, Cairn up by 1.71%, IndusInd Bank up by 1.67% and Dr. Reddy's Laboratories up by 1.08%. The key losers were Tata Steel down by 2.99%, NMDC down by 2.40%, Jindal Steel down by 2.38%, DLF down by 2.36% and Ranbaxy down by 2.35%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.38%, Germany’s DAX was down 0.73% and UK’s FTSE 100 was down 0.47%.

Pressurized by weak cues from US markets, most of the Asian equity indices shut shop in the red on Tuesday. Feeble Japanese macro economic data and concerns that the Federal Reserve will move forward with its decision to trim its stimulus efforts starting in January, too dampened the sentiments across the Asian region. Japanese shares tumbled to a one-month low as stronger yen weighed on exporters. On the economic front, Japanese current account deficit widened more than forecast in November, despite efforts undertaken by the Prime Minister Shinzo Abe to rejuvenate the economy.

Japan posted a current account deficit of 592.8 billion yen in November, slipping into the red for the second straight month amid the yen’s fall and growing demand for energy. The deficit grew 230.1 per cent from a year earlier, and represented the biggest deficit for November for 30 years. The current account shortfall was largely blamed on a trade deficit of 1.25 trillion yen as Japan imported more petroleum and liquefied natural gas after the nation’s worst nuclear disaster in 2011. Meanwhile, Seoul Composite too ended in the negative terrain, led by construction and solar energy shares. South Korea’s benchmarks also drifted lower on institutional selling. Domestic financial institutions offloaded shares worth a net 61.1 billion won, while overseas investors sold shares to the extent of 30.8 billion won.

Equity markets in Indonesia and Malaysia remained shut on account of public holiday.