Post Session: Quick Review

In an extremely dull session of trade, marked by low volumes, Indian equity markets snapped fourth consecutive sessions of gains and ended lower with cut of quarter a percent on Monday. In the flip-flop session of trade, markets altered between green and red, however the bout of selling which emerged in the last hour of trade mainly dragged the markets to day’s low point. By close of trade, both Sensex and Nifty settled below the crucial 20,350 and 6,050 levels respectively. Meanwhile, broader indices yet again outperforming, went home with gains of over one tenth of a percent.

Markets squandering a positive start, settled lower against the backdrop of positive global cues. Sentiment in early deals were upbeat after Central Statistics Office (CSO), pegged economic growth rate for 2013-14 at 4.9, which is higher against 4.5 percent in 2012-13 and also tad higher than the general expectation of a growth of 4.7-4.8 percent, while the rise of 113,000 US payrolls fell well short of a forecast increase of 185,000, not bad enough to sway the Federal Reserve from steadily winding down its bond-buying stimulus.

On the global front, most Asian markets guarded gains on Monday, encouraged with Wall Street, which  was able to weather a seemingly disappointing US jobs report, though there was more than enough event risk ahead to keep investors cautious. Meanwhile, European shares inched higher on Monday, led by Nokia's gains after settling patent claims with rival HTC and on relief that Wall Street weathered weak US jobs figures buoyed the broader market.

Closer home, most of the sector indices ended in red, while those from Realty, Consumer Durables and Capital Goods counters outperformed.  On the flip side, TECK, Banking and Information Technology stocks were the prominent losers.  Bank stocks, like ICICI Bank, HDFC Bank and SBI, were beaten down in trade even after Reserve Bank of India (RBI) allowed banks to utilize up to one-third of the countercyclical provisioning buffer held by them during last fiscal for making specific provisions to cover spiraling bad loans, however acknowledging mounting bad loans were a systemic concern for the banking sector in the country. These stocks also came under pressure after Standard & Poor's Ratings Services in its report titled 'India Banking Outlook 2014: Little Respite In Sight', underscored that  Growth, profitability, and asset quality of Indian banks were likely to remain subdued for the next 12 months. Additionally, FMCG shares witnessed profit taking ahead of Consumer Price Inflation (CPI) data as higher inflation reduces the purchasing power of consumers, while Information Technology shares witnessed drubbing on Rupee’s appreciation. Furthermore, telecom shares also witnessed hammering amid concerns of rising acquisition costs of spectrum. On the flip side, entire tyre stocks, JK Tyre, MRF and Ceat, were in demand after Ceat reported good set of Q3 numbers. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1322: 1252, while 152 scrips remained unchanged. (Provisional)

The BSE Sensex lost 56.62 points or 0.28% to settle at 20319.94. The index touched a high and a low of 20434.50 and 20312.21 respectively. Among the 30-share Sensex, 12 stocks gained, while 17 stocks declined and one stock remains unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.08% and 0.13% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 1.61%, Realty up by 1.05%, Capital Goods up by 0.72%, Oil & Gas up by 0.64% and Healthcare up by 0.51% were the top gainers, while Teck down by 0.89%, Bankex down by 0.59%, Metal down by 0.56%, IT down by 0.49% and Power down by 0.42% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 2.10%,  Sun Pharma up by 1.93%, L&T up by 1.36%, RIL up by 0.87% and ONGC up by 0.84%, while, Hindustan Unilever down by 2.41%, Bharti Airtel down by 2.38%, HDFC down by 2.37%, TCS down by 2.35% and Cipla down by 1.68% were the top losers in the index. (Provisional)

Meanwhile, Finance Ministry expects that India’s current account deficit (CAD) will fall by almost 50% to around $45 billion in the current financial year, mainly on the back of declining gold imports and the narrowing trade deficit. India’s CAD widened to a record high of $88.2 billion or 4.8% of GDP in 2012-13, however during the first half of current fiscal, CAD has narrowed to $26.9 billion or 3.1% of GDP from 4.5% of GDP in the first half of 2012-13.

The ministry further stated that the country is witnessing significant improvement on trade deficit front on account of better performance of exports and contracting imports. During April-December’2013, value of exports increased by 5.94% to $230.34 billion as against $217.42 billion in the same period of previous year. India’s imports also declined by 6.55% to $340.38 billon during April-December’2013 as against $364.24 billion recorded in the same period of previous year. Further, Finance Ministry added that FII inflows remained quite robust during this fiscal and expressed confidence for accretion to foreign exchange reserves. As on January 31, 2014 India’s foreign exchange reserve stood at $291 billion. Besides, Foreign Institutional Investors investing Rs 56,560 crore in equities so far in the current fiscal. 

Referring to fiscal deficit front, Finance Ministry has asserted that country’s fiscal deficit is likely to be contained at 4.7% of GDP in 2013-14 because of better- than-expected response to the ongoing auction of telecom spectrum and other supportive measures taken by the government. So far the government has garnered around Rs 56,190 crore from the ongoing auction of 2G radiowaves and the figure is likely to go up further. In the first nine months of this fiscal, Indian fiscal deficit reached Rs 5,16,390 crore or 95.2 per cent of the Rs 5,42,499 crore fiscal target.

India VIX, a gauge for markets short term expectation of marginally gained 2.69% at 19.05 from its previous close of 18.55 on Friday. (Provisional)

The CNX Nifty lost 14.60 points or 0.24% to settle at 6,048.60. The index touched high and low of 6,083.05 and 6,046.40 respectively. Out of the 50 stocks on the Nifty, 23 ended in the green, while 27 ended in the red.

The major gainers of the Nifty were DLF up 2.86%, Dr. Reddy's Laboratories up by 1.90%, Sun Pharma  up by 1.58%, HCL Tech up by 1.42% and L&T up by 1.37%. The key losers were JP Associate down by 3.23%, HDFC down by 2.48%, Hindustan Unilever down by 2.42%, TCS down by 2.41% and Bharti Airtel down by 2.39%. (Provisional)

The European markets were trading in green; France’s CAC 40 was up 0.47%, Germany’s DAX was up 0.40% and UK’s FTSE 100 was up 0.12%.

All the Asian markets, barring Hang Seng and Jakarta Composite concluded Monday’s trade in green with Japan’s Nikkei share average rising to a one-week high as softer yen underpinned sentiment and traders shrugged off somewhat weak US jobs data. Investors were however cautious before new Fed Chair Janet Yellen’s testimony scheduled this week. Japan posted its smallest current account surplus on record last year, throwing the spotlight back on Tokyo’s ability to service its huge debt and exposing a danger point in an economy starting to find its feet after years of underperformance. For 2013, Japan’s current account recorded a 3.3 trillion yen surplus. This was the smallest surplus in comparable data available from 1985. In December, the deficit stood at 638.6 billion yen ($6.25 billion), against a median forecast for 707.7 billion yen.