Post session - Quick review

Local equity markets showcased amazing reversal of trend to snap the otherwise gloomy session of trade on a pleasant note.  After showcasing signs of consolidation in the previous two trading sessions, Indian equity markets depicted that the new found strength was not short lived, as benchmarks brushing aside host of negative news flow, marched ahead to their northbound journey. 30 scrip sensitive index, Sensex, cracking the stiff 16800 level, concluded well above it with gains of over a percentage points. Similarly, the 50 share widely followed index, Nifty, gaining in similar magnitude, ended past 5100 psychological level. However, broader indices, underperforming the frontline indices, managed to negotiate only modest gains.

Shrugging off the S&P’s warning that India could be first BRIC nation with a non investment-grade sovereign credit rating, local investor’s excluded confidence in the growth prospects of Asia’s third largest Indian economy, as they grabbed the nation’s risky assets class. However, the rally on Dalal Street was also spurred on hopes of twin rate cuts at RBI’s upcoming monetary policy review on June 18, 2012, after disappointing IIP date raised hopes of RBI’s undertaking aggressive stance for rejuvenating the growth of fragile economy. India's annual industrial output growth measured by index of industrial production (IIP), showed a negligible growth of 0.1% for the month of April 2012 versus a contraction of (-) 3.5% in March, but remained way below the street expectation of 1.8%.

Encouraging European leads also acted as a pillar of strength for Indian equity markets, as European equities edged higher on Tuesday, supported by a strong performance from defensives as optimistic investors took the view that Spain's bank bailout will solve some but not all of the region's problems. On the other hand, Melancholic performance of Asian counterparts provided a ceiling to the gains of local markets. Asian markets spiraled downwards, following a sell-off in the US, as investor Euphoria over the Spanish bank bailout fizzled out.

Closer home, the rally which clearly belonged to rate sensitives, also had some contribution from Capital Goods sector. On the other hand, defensive-Health Care counter begged to differ as the pivotal shut shop with loss of close to half a percentage points. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1336:1319 while 155 scrips remained unchanged. (Provisional)

The BSE Sensex gained 188.00 points or 1.13% and settled at 16,856.01. The index touched a high and a low of 16,897.42 and 16,553.47 respectively. 23 stocks were seen advancing against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.56% while Small-cap index was up 0.28%. (Provisional)

On the BSE Sectoral front, Realty up 1.94%, Bankex up 1.91%, Capital Goods up 1.76%, auto up 1.67% and Consumer Durables up 1.40% were the top gainers while Health Care down 0.43% was the only loser.

There top gainers on the Sensex were Maruti Suzuki up 3.31%, Tata Motors up 3.08%, ONGC up 2.62%, Hindalco Industries up 2.41% and Sterlite Industries up 2.41% while, Dr. Reddy’s Lab down 1.97%, Wipro down 1.59%, HUL down 0.62%, Tata Power down 0.26% and RIL down 0.10% were the top losers in the index. (Provisional)

Growth in sales of passenger cars in India hit seven month low levels in May as higher borrowing costs and fuel prices dissuaded buyers from owning new four wheelers. With no aggressive softening of interest rates by RBI, higher running cost and recent price hikes owing to the excise duty hike in Budget, it has increasingly become difficult for car manufacturers to keep up the sales momentum as demand has been adversely impacted.

The body also underscored that sales of even diesel vehicles, which used to have a lot of demand has tapered off, sending signals to the government that its recent plans to tax diesel vehicles more would further deteriorate sentiments and the overall demand will suffer all the more. According to the latest data released by industry body Society of Indian Automobile Manufacturers (SIAM), domestic car sales in May stood at 1,63,229 units as compared to 1,58,809 units in the same month last year, posting a growth of 3.10 percent, the slowest growth since October last year when car sales witnessed a decline of 23.77 percent.

Sales of broader passenger vehicles segment expanded at 8.42 percent during April-May 2012 over same period last year while that of Vans sub-segment registered a de-growth of 5.31 percent during April-May 2012 as compared to same period last year. The only sub-segment that boasted of strong growth rate in the passenger vehicles segment was Utility Vehicles, which expanded by a whopping 51.05 percent thanks to some stylish and aggressively priced new launches.

Overall domestic production of automobiles across categories in May 2012 was 1,783,384 vehicles as against 1,613,872 in May 2011, indicating an increase of 8.15 percent year on year. While, total domestic sales of vehicles across categories expanded by 10.26 percent to 15,13,032 units in May as against 13,69,070 units in the same month last year.

The SIAM data also showed that total domestic two-wheeler sales in the previous month grew by 11.40 percent to 11,92,688 units from 10,70,603 units in May 2011. Of the total two wheeler sales, motorcycle sales stood at 8,87,634 units growing only 7.24 percent from 8,27,746 units in the same month last year. However, the scooter overall sales showed strong growth of 34.40 percent to 2,35,185 units from 1,74,985 units.

Moreover, commercial vehicles sales expanded by 9.12 percent to 62,025 units during the month, as compared to 56,841 units in the same month a year-ago. Of the total commercial vehicles sales, sales of the Medium and Heavy Commercial Vehicles dropped sharply by 10.58 percent to 22,227 units during the month compared to 24,858 units in May last year while light commercial vehicle sales continued to expand at strong rate of 24.43 percent to 39,798 units in May 2012 from 31,983 units in May 2011. In the three-wheeler category, sales fell by 3.32 percent to 37,184 units from 35,988 units in the same month last year.India VIX, a gauge for market’s short term expectation of volatility lost 3.27% at 24.20 from its previous close of 25.02 on Monday. (Provisional)

The S&P CNX Nifty gained 57.45 points or 1.14% to settle at 5,111.55. The index touched high and low of 5,128.90 and 5,015.15 respectively. 39 stocks advanced against 10 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Ambuja Cment up 5.28%, PNB up 3.93%, ACC up 3.27%, Tata Motors up 3.10% and Maruti Suzuki up 3.06%.On the other hand, Dr. Reddy’s Lab down 1.84%, Wipro down 1.70%, Ranbaxy down 1.23%, HUL down 0.87% and JP Associates down 0.43% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.49%, Germany's DAX up 0.60% and Britain’s FTSE 100 up 0.38%.

Sentiment in the Asian region turned bearish and all the Asian markets barring Straits Times ended the day’s trade in the red on Tuesday as investors booked their profit amid fears over Europe’s debt crisis resurfaced after the yield on Spain’s 10-year bond rose to 6.48 percent on Monday, higher than Friday’s close, after Fitch downgraded Spain’s two largest banks. Moreover, investors remained unconvinced that the bailout for debt-stricken Spanish banks will halt Europe’s spreading debt crisis. In addition, attention is turning to problems in Italy and worries grew over this weekend’s elections in Greece.

Hong Kong shares fell 0.43 percent while, Japan's Nikkei share average declined over a percent, as a promised bailout for Spanish banks left investors unconvinced that financial contagion would be contained, and doubts about the euro-zone’s future crept back. Moreover, KOSPI Composite dipped over half a percent over creeping doubts about the effectiveness of Spain’s bank bailout; although the index cut back some of its earlier losses on institutional buying.