Post Session: Quick Review

Late hour buying helped Indian equity markets erase all early losses and end Tuesday’s session in green, albeit with slender gains of close to one tenth of a percent. Strategy of ‘buy on dips’ worked well for Dalal Street, which for once gave out an impression of another negative close post previous session’s free-fall. Lack of positive trigger at home front combined with feeble cues weighed on the sentiments for first half of the session. However, by close of trade, both Sensex and Nifty, bounced back and ended the session past the psychological 20,200 and 6,000 levels respectively. Meanwhile, broader indices went home with broader gains in the range of 0.20%-0.40%.

On the global front, Asian shares stumbled on Tuesday, after disappointing data cast doubt on the strength of world’s largest economy and gave investors little reason to hope for stability in emerging markets after their recent rout. Additionally, European shares sank in early trade on Tuesday, retreating for the seventh time in nine sessions and tracking a sell-off on Wall Street and in Asia sparked by lower-than-expected US manufacturing data.

Closer home, markets started recouping lost ground with the recovery of banking shares in the afternoon deals, while stocks from Consumer Durables counter too were supportive to markets uptrend. Nevertheless, top gainers of the session, besides banking stocks, were stocks from FMCG and Power counters. Recovery in banking shares was led by index heavyweight, State Bank of India (SBI), which rallied over 1.5% for the session. Additionally, telecom stocks, viz Bharti Airtel and Idea Cellular, etc were in demand on second day of spectrum auction. According to media reports, ninth round of telecom spectrum auction received bid of Rs 497 crore/MHz so far for the Mumbai’s 900 MHz band. On the flip side, IT, Technology and Healthcare counters were the top losers of the session. Information technology stocks cracked over 2% after weak US data casted doubt on the strength of the US economy, a major market for IT exporters. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1264: 1235, while 149 scrips remained unchanged. (Provisional)

The BSE Sensex gained 9.14 points or 0.05% to settle at 20218.40. The index touched a high and a low of 20255.52 and 19963.12 respectively. Among the 30-share Sensex, 17 stocks gained, while 13 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.41% and 0.27% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 0.96%, FMCG up by 0.85%, Power up by 0.78%, Auto up by 0.60% and Realty up by 0.54% were the top gainers, while IT down by 1.62%, Teck down by 0.88%, Healthcare down by 0.68%, Metal down by 0.46% and Oil & Gas down by 0.15% were the losers in the space. (Provisional)

The top gainers on the Sensex were NTPC up by 3.57%, Bharti Airtel up by 3.28%, Tata Motors up by 2.94%, SBI up by 1.99% and Bajaj Auto up by 1.91%, while, Mahindra & Mahindra down by 3.05%, Gail India down by 3.01%, Dr Reddys Lab down by 2.21%, BHEL down by 2.09% and Wipro down by 1.93% were the top losers in the index. (Provisional)

Meanwhile, Finance Minister P Chidambaram has indicated that the government might make minor adjustments in excise duties and service tax rates in the vote-on-account (interim budget) to be presented in Parliament on February 17. The vote-on-account is not a full-fledged Budget and no major changes by way of amendments could be made to it.

By adding further, Chidambaram added that changes required in the excise rates or service tax rates will be made without an amendment. The prevailing economic slowdown may prompt the government to experiment with indirect tax cuts in the hope that resultant savings could boost the margins of companies.

It is expected that government can cut excise and service tax rates from the current 12% to 10% proposed earlier in order to provide some impetus to industrial growth. However, during the first nine months of 2013-14, Indirect tax collection grew just 6.2% to Rs 3,55,003 crore as compared to the year earlier. The government had projected a 20% growth in indirect taxes this fiscal to Rs 5.65 lakh crore. Domestic industries also expect a five-year extension of the excise duty exemption given to the industry in states such as Himachal Pradesh and J&K that expires in May 2014.

India VIX, a gauge for markets short term expectation of marginally gained 2.29% at 18.69 from its previous close of 18.27 on Monday. (Provisional)

The CNX Nifty gained 8.10 points or 0.13% to settle at 6,009.90. The index touched high and low of 6,017.80 and 5,933.30 respectively. Out of the 50 stocks on the Nifty, 29 ended in the green, while 21 ended in the red.

The major gainers of the Nifty were NTPC up 3.61%, PNB up by 3.47%, Bharti Airtel up by 3.16%, Tata Motors up by 2.88% and Ranbaxy up by 2.49%. The key losers were HCL Tech down by 3.43%, NMDC down by 3.37%, M&M down by 3.03%, Gail down by 2.79% and Dr. Reddy's Laboratories down by 2.29%. (Provisional)

Most of the European markets were trading in red; Germany’s DAX down by 0.73% and UK’s FTSE 100 down by 0.20%, while France’s CAC 40 was up 0.06%.

The Asian markets concluded Tuesday’s trade in red, tracking weak cues from Wall Street where the major averages tumbled on disappointing economic data. Markets in Shanghai and Taiwan remained closed for Lunar New Year holidays. Japan’s Nikkei fell to a four-month low as the yen’s rise hurt sentiment. The currency-sensitive Japanese market suffered as the US dollar reached more than two-month low against the yen, and even lost grip of the ¥101-handle before slightly recovering.

Indonesia’s government aims to raise Rp 10 trillion ($816 million) from selling bonds and bills on Thursday, in what would be the third of such sales this year as part of the country’s efforts to raise funds to plug the budget deficit. Hong Kong Retail Sales fell to a seasonally adjusted annual rate of 5.7%, from 8.5% in the preceding month. South Korean CPI remained unchanged at a seasonally adjusted annual rate of 1.1%, from 1.1% in the preceding month.