Post Session: Quick Review

After posting modest gains in last trading session, local equity markets reversed all the intra-day gains and ended in negative territory on Thursday, with loss of over quarter of a percent. In what looked as stable session of trade, benchmark equity indices suddenly took a U-turn at the end and settled substantially lower. Bout of selling that crept in last hour of trade mainly washed away all the market’s gain, dragging both Sensex and Nifty, below the crucial 21,900 and 6550 levels respectively by the close, broader indices too followed suite and ended in red.

In earlier part of the session, good macro-economic data which increased the prospects of RBI holding key rates in monetary policy on April 1, if not slashing them mainly bolstered the sentiment, especially the banking counter. On the macro-front, while factory output posted growth for the first time in four months at 0.1% in January, Retail inflation eased at 25 months low level of 8.10% in February. Nevertheless, cautious selling which took place ahead of February Wholesale Price Index (WPI) data to be released on Friday .i.e. March 14, undid all the early gains.

On the global front, Asian markets ended on a mixed note on Thursday as sentiment took a hit after China released another batch of disappointing data, adding to fears about growth in the economic giant. China’s industrial output, which measures production at factories, workshops and mines, posted the slowest rate since April 2009, at the height of the global financial crisis as it rose 8.6 per cent year-on-year in January and February. At the same time, retail sales, a key indicator of consumer spending, were up 11.8 per cent, which was also the worst performance for several years. On the flip side, European stocks inched mostly higher in early trade on Thursday, halting their two-week slide, although a sell-off among UK retailers after a profit warning by Morrison's limited the rebound.

Closer home, sectoral indices ended mixed, stocks from Public Sector Undertaking (PSU), Oil & Gas and Banking counters outperformed. On the flip side, stocks from Information Technology, TECK and Realty counters were the top losers of the session. Fall of Information Technology (IT) pivotal was led by Infosys stocks which tanked over 8% on concerns about the revenue outlook after chief executive SD Shibulal said the company was facing challenges in some customer segments. While, loss of Sun Pharmaceuticals spelled trouble for the entire Healthcare counter. Shares in Sun Pharma, India's biggest drugmaker by value, cracked over 5% on Thursday after US Food and Drug Administration imposed a ban on imports from its plant at Karkhadi in Gujarat, in the latest quality blow for India's drug sector. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1285: 1512, while 141 scrips remained unchanged. (Provisional)

The BSE Sensex lost 88.33 points or 0.40% to settle at 21767.89. The index touched a high and a low of 21991.36 and 21720.13 respectively. Among the 30-share Sensex, 17 stocks gained, while 13 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.59% and 0.23% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 1.46%, PSU up by 1.36%, Bankex up by 0.88%, Auto up by 0.53% and FMCG up by 0.44%, were the only gainers, while IT down by 4.04%, Realty down by 3.81%, Teck down by 3.53%, Healthcare down by 0.99% and Metal down by 0.81% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.52%, HDFC Bank up by 2.32%, Dr Reddys Lab up by 2.30%, ONGC up by 2.29% and Coal India up by 2.02%, while, Infosys down by 8.47%, Sun Pharma down by 5.01%, SSLT down by 1.94%, BHEL down by 1.22% and TCS down by 1.15% were the top losers in the index. (Provisional)

Meanwhile, in a good news ahead of the upcoming RBI policy on April 1, annual rate of inflation, based on the consumer prices index (CPI) for month of February, 2014 eased more than expected to a 25-months low of 8.10%, as against 8.79% in January, aided by moderation in food prices.

According to the data, all India General (all groups) CPI numbers of February 2014 for Rural, Urban and Combined stood at 139.0, 135.3 and 137.4 respectively. The corresponding provisional inflation rates for rural and urban areas for February 2014 stood at 8.51% and 7.55%, While, inflation rates (final) for rural and urban areas for January 2014 stood at 9.35% and 8.09% respectively.

Food prices for consumers rose at 8.57% in last month from a year earlier, much slower than January’s 9.90% rise. The Provisional annual inflation rates of February 2014 for Rural and Urban in respect of ‘food and beverages’ stood 9.27% and 7.10% respectively. Additionally, Provisional annual inflation rates (Combined) for Fuel and light; Clothing, bedding and footwear stood at 6.13% and 9.22% respectively for the month of February. 

Additionally, core consumer price index was estimated to have risen around 7.9 per cent in February from a year earlier, easing from an 8.1 per cent advance in January. This is a positive since core inflation for the past few months has been stuck at around 8 per cent, a level Reserve Bank of India’s (RBI) chief Raghuram Rajan deems uncomfortably high.

However, retail inflation could pick momentum in coming months as recent trend of a decline in food prices could be temporary as hail and heavy rains in the past two weeks have damaged crops, which is likely to keep core retail inflation elevated. In an attempt to quell price pressures, the RBI so far has raised interest rates three times since September, even though economic growth is languishing at around a decade-low of 4.5 per cent.

India VIX, a gauge for markets short term expectation marginally lost 1.29% at 16.82 from its previous close of 17.04 on Wednesday. (Provisional)

The CNX Nifty lost 25.75 points or 0.40% to settle at 6,491.15. The index touched high and low of 6,561.45 and 6,476.65 respectively. Out of the 50 stocks on the Nifty, 25 ended in the green, while 25 ended in the red.

The major gainers of the Nifty were BPCL up 7.63%, M&M up by 2.65%, Dr. Reddy's Laboratories up by 2.47%, Kotak Bank up by 2.46% and ONGC up by 2.35%.

The key losers were Infosys down by 8.45%, DLF down by 6.39%, Sun Pharmaceuticals down by 5.12%, JP Associate down by 3.72% and Ranbaxy down by 3.04%. (Provisional)

Most of the European markets were trading in green; France’s CAC 40 was up 0.22% and Germany’s DAX was up by 0.16%, while UK’s FTSE 100 was down 0.07%.

The Asian markets concluded Thursday’s trade mostly in green with Japan’s Nikkei share average ending down to a 1-1/2-week low, erasing earlier gains after weaker-than-expected Chinese output and retail sales data disappointed the market. China’s central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves. The Bank of Korea left its key rate unchanged, supporting a rebound in growth as Kim Choong Soo gets ready to pass the reins to a new governor who will face risks from record household debt to US monetary tapering. The central bank has held the seven-day repurchase rate at 2.5% for a tenth straight month.

The data on retail sales and industrial production in China came in below forecast. Growth in industrial production in China slowed to 8.6% in the first two months of 2014, compared to a 9.7% expansion in December, and growth in retail sales narrowed to 11.8% from 13.1% in December. Chinese Fixed Asset Investment fell to a seasonally adjusted 17.9%, from 19.6% in the preceding month. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 3.7%, from 4.8% in the preceding month while Japan’s Core Machinery Orders rose to 13.4%, from -15.7% in the preceding month.