Post Session: Quick Review

Wednesday’s session was a comeback session for Indian equity markets, which grinding lower in the first half of the session, recovered substantially during the second half, ending the day with modest gains of over quarter of a percent. The pattern of trade remained similar to previous session, whereby benchmarks witnessed recovery only in the second half of session, with the only difference being the quantum of gains. By close of trade, both Sensex and Nifty, traded past the crucial 20,250 and 6,000 levels respectively, with gains of over quarter of a percent. Meanwhile, broader indices went home with broader gains in the range of 0.50%-1.00%.

Intra-day trend reversal took place at Dalal Street with the positive start of European markets, which after opening positively went on capturing gains after data showed that output in the euro zone economy expanded at its fastest pace since June 2011. Meanwhile, mostly positive regional counterparts also aided the uptrend of Indian equity markets. On the global front, Asian shares ended mostly higher on Wednesday, with a rally on Wall Street giving Tokyo the impetus to claw back some of its losses in the previous session.

Sectorally, Auto, Realty and Information Technology counters were top gainers of the session, while those from Fast Moving Consumer Goods, Oil & Gas counters were the weak links of the trade. Among the gainers, Auto stocks too rose as the 12th Auto Expo started on the outskirts of New Delhi today, 5 February 2014, while Pharma stocks gained some traction after Ranbaxy reported narrower than expected net loss in December quarter. However, the gains of bourses was limited on account of poor showing by index heavyweight, BHEL, which dropped close to 2% after the company reported 41.21% fall in its net profit at Rs 694.81 crore for the quarter, as compared to Rs 1181.85 crore for the same quarter in the previous year.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1455: 1120, while 146 scrips remained unchanged. (Provisional)

The BSE Sensex gained 43.44 points or 0.21% to settle at 20255.37. The index touched a high and a low of 20289.33 and 20076.10 respectively. Among the 30-share Sensex, 15 stocks gained, while 13 stocks declined and two stocks remain unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.35% and 0.93% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 1.66%, Auto up by 1.60%, Realty up by 1.47%, IT up by 0.88% and Power up by 0.85% were the top gainers, while FMCG down by 0.95%, Oil & Gas down by 0.28% and Consumer Durables down by 0.17% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.85%, Tata Motors up by 2.98%, Mahindra & Mahindra up by 2.44%, Coal India up by 2.41% and TCS up by 1.80%, while, ITC down by 1.97%, BHEL down by 1.84%, Sun Pharma down by 0.76%, Maruti Suzuki down by 0.75% and RIL down by 0.72% were the top losers in the index. (Provisional)

Meanwhile, amid differences of opinion between Food and Agriculture Ministries for providing incentives for raw sugar export, the Cabinet Committee on Economic Affairs (CCEA) has deferred decision on Food Ministry’s proposal for fixing subsidy for exports of raw sugar. Food Ministry has proposed cash subsidy of Rs 2,000 per tonne to the beleaguered sugar industry for export of four million tonnes of raw sugar for a period of two years. On the other hand, Agriculture Ministry is in favour of a reasonable subsidy not less than Rs 3,500 per tonne in order to provide major boost to the exports of raw sugar.

Food Minister K V Thomas stated that Committee of Secretaries of food, agriculture, commerce and finance ministries would meet soon to re-calculate the subsidy of raw exports. As per the Food Ministry proposal, total subsidy outgo will be around Rs 800 crore that will be adjusted from the Sugar Development Fund (SDF), while the government would have to bear Rs 1,400 crore if Agriculture Ministry’s demand is considered. Meanwhile, the government had already given subsidy of Rs 1,450 per tonne in 2007-08 to export six million tonnes of sugar and the current incentive is being worked on the same procedure.

However it would be difficult for India to export raw sugar as global prices are ruling much lower as against the domestic production cost of Rs 26,500 per tonne. Further, domestic sugar mills are facing cash crunch as sugar prices have come down below the cost of production in view of surplus supplies. Meanwhile, the government has been taking measures to improve cash flow of sugar mills. During December’2013, the government had approved Rs 6,600 crore interest-free loans to sugar industry for making payment to sugarcane farmers.

India VIX, a gauge for markets short term expectation of marginally gained 1.28% at 18.93 from its previous close of 18.69 on Tuesday. (Provisional)

The CNX Nifty gained 21.05 points or 0.35% to settle at 6,021.95. The index touched high and low of 6,028.05 and 5,962.05 respectively. Out of the 50 stocks on the Nifty, 33 ended in the green, while 17 ended in the red.

The major gainers of the Nifty were Ranbaxy up 5.75%, Tata Steel up by 5.12%, DLF up by 2.76%, Tata Motors up by 2.65% and M&M up by 2.61%. The key losers were ITC down by 1.89%, BHEL down by 1.50%, PNB down by 1.22%, Maruti Suzuki down by 0.84% and HCL Tech down by 0.78%. (Provisional)

Most of the European markets were trading in green; Germany’s DAX up by 0.14%, UK’s FTSE 100 up by 0.42% and France’s CAC 40 was up 0.32%.

The Asian markets concluded Wednesday’s trade mostly in green with a rally on Wall Street giving Tokyo the impetus to claw back some of its losses in the previous session. Markets around the world have been sent into a tailspin in recent days following worse than expected manufacturing activity data from China and the United States, suggesting softness in the global economy. Taiwan January manufacturing expanded at its quickest in nearly three years as output and new orders rose. The HSBC Purchasing Managers’ Index was 55.5 in January compared with 55.2 in December--improving for the fourth straight month. Japan’s Average Cash Earnings rose to a seasonally adjusted 0.8%, from 0.6% in the preceding quarter whose figure was revised up from 0.5%.

Indonesia’s economy expanded at the slowest pace in four years in 2013, as investment weakened and imports of machinery and petroleum products eroded earnings from exports. Gross domestic product rose 5.78% from a year earlier. Growth was slower than last year’s 6.23% pace and the slowest since the 4.63% rate in 2009. Indonesia’s finance ministry raised 15 trillion rupiah ($1.23 billion) at a bond auction, well above an indicative target of 10 trillion rupiah. The country sold all offered government securities with the yields mixed compared with the previous auction on January 21.