Post Session: Quick Review

Local equity markets shut shop in green for third straight session on Thursday and ended past the crucial 20,300 (Sensex) and 6,000 (Nifty) levels, with decent gains of over quarter of a percent. Similar to previous two session’s trend, benchmarks witnessed recovery in the second half of session. Nevertheless, buying in wee hours of trade only prevented markets from negative close.

Earlier, part of the session, markets traded in fine fettle after government cancelled its previously deferred bond sale of Rs 15,000 crore, which hinted at latter’s confidence of achieving fiscal deficit target of 4.8 percent of GDP for 2013-14. However, benchmarks, specifically Nifty took a turn for the worse in late morning deals after multiple trades were placed shorting index futures, while Sensex simply followed the suite. Nevertheless, benchmark started recouping ground with the positive start of European markets, while Asian shares too were supportive of markets uptrend.

On the global front, Asian shares took a tentative step forward from five-month lows on Thursday, with investors hoping the European Central Bank (ECB) and upcoming US jobs data can calm nerves strained by the emerging market selloff. Additionally, European equities were higher in morning with corporate earnings releases buoying investor sentiment ahead of two monetary policy decisions from central banks later in the session.

Sectorally, most of the indices ended in green, but stocks from Realty, Capital Goods, Banking and Information Technology counters underperformed. Shares of IT companies fell after global rival- Cognizant Technology Solutions Corp forecasted 2014 revenue below street's expectations on Wednesday, raising concerns about the sector's growth prospects. However, gains in FMCG heavyweights like ITC and HUL along with HDFC Bank capped the losses in IT heavyweights. Nevertheless, top gainers of the session were stocks from FMCG, Metal and Consumer Durables counters.

Earnings were mixed bag, while Central bank rallied over 4% despite reporting 66% in Q3 net profit to Rs 61.5 crore as it made higher provisions and paid more tax, Power Grid Corporation stocks fell by over a percent after the company’s Q3 net profit narrowed to Rs 1,042 crore for the quarter ended December 31, 2013, due to costlier borrowings. Central electricity transmission utility had posted a profit of Rs 1,129 crore in the corresponding quarter of the last financial year. However, Central Bank’s Net interest income, or the difference between interest income and interest expense, increased 28% from a year ago to Rs 1,807.6 crore during the three-month period. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1259: 1297, while 164scrips remained unchanged. (Provisional)

The BSE Sensex gained 42.41 points or 0.21% to settle at 20303.44. The index touched a high and a low of 20358.19 and 20079.82 respectively. Among the 30-share Sensex, 17 stocks gained, while 13 stocks declined. (Provisional)

The BSE Mid cap index ended lower by 0.19% and Small cap index ended higher by 0.02%. (Provisional)

On the BSE Sectoral front, FMCG up by 1.41%, Consumer Durables up by 1.10%, Metal up by 1.09%, Auto up by 0.82% and PSU up by 0.62% were the top gainers, while Realty down by 1.61%, Capital Goods down by 1.05%, IT down by 0.33%, Bankex down by 0.16% and Teck down by 0.15% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Coal India up by 5.33%, Tata Power up by 3.16%, Hindustan Unilever up by 2.63%, Mahindra & Mahindra up by 2.60% and Maruti Suzuki up by 2.14%, while, BHEL down by 2.65%, SBI down by 1.26%, Axis Bank down by 1.25%, Cipla down by 1.24% and SSLT down by 1.16% were the top losers in the index. (Provisional)

Meanwhile, amid prevailing economic slowdown in the country, the activity in India's services sector, which make up nearly 60% of country’ economics output, remained subdued for the seventh straight month in January owing to the falling new orders amid tough economic conditions and political issues. The HSBC Services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, posted a reading at 48.3 in January below 50 mark that separates growth from contraction. Meanwhile, the downturn in Indian services activity eased slightly in the reported month as compared to 46.7 recorded in the previous month, December. Showing a further contraction in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, recorded at 49.6 in January as against 48.1 in December.

The HSBC survey indicated that increased competition for new work, deteriorating confidence among clients and weaker underlying demand were the main reasons for decline in new businesses in the month under review. However, the rate of new order contraction was slight and the slowest in that sequence. Among the five monitored service sectors covered by the survey, Post & Telecommunication was best performing services sector, recording higher output and new business. On the other hand, Financial Intermediation suffered the sharpest declines in both business activity and new orders.

In spite of having lower new orders, service providers hired additional workers in January amid expectations of higher new orders in coming months. The growth is expected on the back of supportive factors such as planned increases in marketing, forecasts of an overall improvement in the Indian economy and stronger demand. Outstanding business in Indian service sector also fell in January. Further, HSBC survey signaled broadly a steady inflation reading with input costs across the private sector rising at three-month high rate in January.

India VIX, a gauge for markets short term expectation of marginally gained 0.05% at 18.94 from its previous close of 18.93 on Tuesday. (Provisional)

The CNX Nifty gained 15.65 points or 0.26% to settle at 6,038.05. The index touched high and low of 6,048.35 and 5,965.40 respectively. Out of the 50 stocks on the Nifty, 27 ended in the green, while 23 ended in the red.

The major gainers of the Nifty were Coal India up 5.02%, Hindustan Unilever up by 2.98%, Tata Power up by 2.88%, NMDC up by 2.71% and Cairn up by 2.35%. The key losers were JP Associate down by 2.96%, BHEL down by 2.58%, DLF down by 2.17%, PNB down by 1.94% and Ranbaxy down by 1.81%. (Provisional)

Most of the European markets were trading in green; Germany’s DAX up by 0.98%, UK’s FTSE 100 up by 0.59% and France’s CAC 40 was up 1.12%.

The Asian markets, barring Nikkei 225 concluded Thursday’s trade in green with investors indulging in some bargain hunting after recent steep losses. However, gains remained capped as there was some cautiousness ahead of the US non-farm payroll data scheduled on Friday. Chinese Shanghai Composite remained closed on account of Lunar New Year. The data released showed that foreign investment in Japanese stocks fell ¥751.9 billion ($7.41 billion) last week. Taiwanese CPI rose to a seasonally adjusted annual rate of 0.76%, from 0.33% in the preceding quarter. Hong Kong’s total retail sales in 2013 grew 11% in value and 10.6% in volume over a year earlier to reach $494.5 billion. The total retail sales value in December, provisionally estimated at $49.7 billion, increased 5.7% year-on-year. After netting out the effect of price changes, total retail sales volume rose 6.1%. The HSBC Hong Kong purchasing Managers’ Index rose to 52.7 in January from 51.2 in December, indicating that business conditions improved for Hong Kong’s private sector.