Post Session: Quick Review

Indian markets after a brief pause on Friday, once again returned to their declining path with major indices losing another over half a percent on Monday. The negative global cues gave a mild gap-down start to the domestic markets, there was hardly any supporting factor that could have came in front of the one way slide of the markets. Traders remained concerned about a CII survey that ruled out the possibility of any significant improvement in GDP growth in the second half and predicted GDP in the second half to grow in the range of 4.5-5.0 per cent. Weak auto sales numbers too weighed on the sentiments of the marketmen, Bajaj Auto reported 8% decline in its Jan sales, Ashok Leylands sales were down by 26%, M&M sales declined by 14%, earlier Maruti Suzuki had reported 10% decline in its January sales.

Earlier, the Asian markets made a weak start after the major US indices snapped the week and month lower. There was concern of slowdown in Chinese manufacturing growth after China's official Purchasing Managers' Index (PMI) dipped to 50.5 in January from December’s 51.Though the chinese market was not trading but the impact was felt on other regional gauges. The European markets made a positive start that helped the markets in making some recovery.

Back home, during mid of the session the selling aggravated after Oil minister Veerappa Moily said that CNG prices will be cut by about Rs 15 per kg and piped natural gas by about Rs 5 per cubic metres in Delhi. While the PSU ONGC came under pressure with the announcement, on fear of rise in subsidy burden, city gas distributor IGL surged as the minister also announced that IGL and other city gas entities will get entire requirement of gas from domestic fields as against previous 80 per cent. Despite a small recovery attempt, markets never looked confident and overlooked the good macro data of manufacturing, the HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, bounced to 51.4 in January; its highest since March, from 50.7 in the previous month. Manufacturing increased due to increase in new orders from India's major export destinations of the United States and the euro zone over the past few months. The encouraging result announcement by Vijaya Bank and lupin too faild to make any positive impact on the markets, though they themselves ended higher. Selling intensified in the final hours of trade and Nifty  breached the long held crucial psychological levels of 6000, last seen on November 22.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1068: 1449, while 146 scrips remained unchanged. (Provisional)

The BSE Sensex lost 315.72 points or 1.54% to settle at 20198.13. The index touched a high and a low of 20480.35 and 20193.79 respectively. Among the 30-share Sensex, 5 stocks gained, while 25 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.83% and 0.58% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 0.93% was the only gainer, while Metal down by 3.24%, Realty down by 2.31%, Auto down by 2.01%, PSU down by 1.74% and Teck down by 1.63% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Gail India up by 1.64%, Dr Reddys Lab up by 1.27%, Sun Pharma up by 1.20%, Cipla up by 0.57% and Axis Bank up by 0.23%, while, Hindalco down by 5.61%, Tata Steel down by 3.93%, Bajaj Auto down by 3.62%, BHEL down by 3.59% and Tata Motors down by 3.57% were the top losers in the index. (Provisional)

Meanwhile, suggesting an economic recovery on its way, Indian manufacturing activity witnessed expansion in January with activity growing at its fastest pace in nearly a year on the back of increased domestic and overseas orders. The HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rose to 51.4 in the month of January, highest since March, from 50.7 in the previous month.

The survey indicated that new businesses from abroad grew at a solid pace in January. Subsequently, Indian manufacturers raised their production levels for the third successive month with the rate of output growth was solid and the strongest since February 2013. Survey further highlighted that the growth in output and new orders for consumer goods continued to outperform the remaining two monitored categories including intermediate goods and consumer goods. Purchasing activity in the Indian manufacturing economy rose in the latest month, although the pace of expansion was slight and well below the series average. Further, employment level has also increased across all three monitored sub-sectors for the fourth consecutive month in January. The new orders sub-index, measuring overall new orders rose to 52.4 in the reported month from 51.3 in December.

The HSBC survey further asserted that deteriorated operating conditions in the Indian manufacturing sector signalled pressure on operating capacity in January, as backlogs of work increased solidly with the sharpest increase noted at consumer goods firms. Meanwhile, supplier performance improved in January for the first time since September’13 with shorter delivery times reflecting a greater availability of raw materials at vendors. Manufacturing firms further highlighted that input costs rose in January on account of higher prices for a range of raw materials, including metals, chemicals and energy. As a result, firms raised their output prices, however, the latest rise in output charges was moderate and much weaker than seen for input costs.

India VIX, a gauge for markets short term expectation of volatility gained 8.62% at 18.27 from its previous close of 16.82 on Friday. (Provisional)

The CNX Nifty lost 92.85 points or 1.52% to settle at 5,996.65. The index touched high and low of 6,074.85 and 5,994.45 respectively. Out of the 50 stocks on the Nifty, 6 ended in the green, while 44 ended in the red.

The major gainers of the Nifty were Lupin up 4.39%, Dr. Reddy's Laboratories up by 1.36%, Gail up by 1.31%, Sun Pharmaceuticals up by 0.54% and Cipla up by 0.38%. The key losers were Hindalco down by 5.80%, BHEL down by 4.08%, Bajaj-Auto down by 3.97%, Tata Steel down by 3.86% and Tata Motors down by 3.59%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.49%, Germany’s DAX was down 0.44% and UK’s FTSE 100 was down 0.66%.

The Asian markets concluded Monday’s trade in red extending a global rout on renewed fears about emerging economies after the US Federal Reserve pressed ahead with its stimulus reduction and Turkey and South Africa hiked interest rates. Markets in China, Hong Kong, Taiwan and Malaysia were closed for trading on account of holiday.  Asian manufacturing outside China showed signs of solid expansion in January as order books swelled, but factories in the region’s giant struggled for growth, heightening concerns about an economic slowdown. China’s service-sector growth also slowed down, to a five-year low, in another sign of the stuttering economic momentum that has been a factor behind the emerging markets sell-off of the past two weeks. Purchasing managers indexes (PMIs) showed South Korea expanding at its fastest in eight months. China official nonmanufacturing Purchasing Managers' Index fell to 53.4 in January from 54.6 in December. The services sub-index declined to 51.5 in January from 52.5 in December and construction fell to 61.0 from 62.6. New orders for the entire nonmanufacturing sector dropped to 50.9 from 51.0. The federation’s official manufacturing PMI, a companion index, fell to 50.5 in January compared with 51 in December.

Indonesia posted its third straight monthly trade surplus in December and it’s biggest in two years, an encouraging sign that could give the central bank leeway to keep rates steady next week despite investor anxiety over strains in emerging markets. Indonesia posted a trade surplus of $1.52 billion in December, putting the trade balance in the black for a third straight month and relieving pressure on the ailing rupiah. Indonesia’s inflation rate remained high through January due a weakening rupiah and disruption to the supply chain caused by widespread flooding. The country’s consumer price index increased 8.22% in January from the corresponding period last year. That’s compared to 8.38% year-on-year rise in December. Inflation in 2012 stood at 4.3%.