Post session - Quick review

After scaling a 13 weeks high level in the previous session, Indian equity markets re-entered the consolidation mode as benchmarks gyrating in a thin band for the entire trading session, settled near the previous closing, albeit with a minor losses. A flurry of monetary easing by three global central banks led investors to fret that the policy makers are becoming even gloomier about their economies. However, the market-men also preferred winding up position ahead of the release of all-important US jobs data due later on Friday, which is expected to provide clues about the extent of damage the euro zone's debt crisis is inflicting on the US economy and whether the Federal Reserve might also attempt more monetary stimulus.

Closer home, barometer 30 share index Sensex, after breaking through the 17550 psychological level, ended below that bastion. Meanwhile, the widely followed index, Nifty, despite facing all the odds, ended holding the crucial 5300 mark. However, the broader indices made huge losses compared to the frontline indices. Both the barometer indices, however, for the week managed to sneak out modest gains of over 0.50%. However, broader indices surpassing larger counterparts, ended with gains of over 2.5% each.

On the global front, Asian pacific shares ended in red as second cut in borrowing costs in a span of less than a month by People's Bank of China, was taken in response to the country's worsening conditions since the global financial crisis. PBoC cut lending rates by 31 bps with 30% flexibility below reference rate and cut one-year deposit rate by 25 bps. Meanwhile, European shares too tanked early on Friday as fading hopes of further monetary stimulus ahead of a key US jobs report prompted investors to book more profits on five straight weeks of gains, the longest winning streak this year. ECB on Thursday slashed its refinancing rate by 25 basis points to a record low of 0.75%.

Back on the home turf, stocks from Fast Moving Consumer Goods (FMCG) and Banking, only struggled against the force to end in green. On the flip side, stocks from Metal, Realty and Capital Goods counters ended down in dumps. Banking stocks managed to entice traction as monetary easing by China, Europe and Britain central banks on Thursday, bolstered hopes that RBI may adopt a soft stance when it reviews policy next on July 31, 2012. The overall market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1358:1540 while 130 scrips remained unchanged. (Provisional)

The BSE Sensex lost 7.07 points or 0.04% and settled at 17,531.60. The index touched a high and a low of 17,554.55 and 17,425.47 respectively. 12 stocks were seen advancing against 18 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.65% while Small-cap index was down by 0.21%. (Provisional)

On the BSE Sectoral front, FMCG up 0.71% and Bankex up 0.31% were the only gainers while, Realty down 1.35%, Consumer Durables down 1.33%, Metal down 1.14%, Capital Goods down 1.06% and Power down 0.94% were the top losers.

The top gainers on the Sensex were ICICI Bank up 1.97%, M&M up 1.38%, HDFC up 1.24%, HUL up 1.19% and ITC up 1.18% while, ONGC down 2.06%, Jindal Steel down 3.61%, Tata Power down 2.04%, Maruti Suzuki down 1.93%, Sterlite Industries down 1.87% and Hero MotoCorp down 1.58% were the top losers in the index. (Provisional)

Meanwhile, Mauritius has assured India to look into the controversial aspect of its tax treaties, which is offered to businessmen in India to use the island as a support for investments in Africa. On India’s demands for reworking the Double Taxation Avoidance Agreement (DTAA), Mauritius Foreign Minister Arvin Boolell said, ‘if there is room for improvement, we will constantly make room for improvement, of course, in respect and in compliance with the best international practices.’

In a meeting between External Affairs Minister of India, S M Krishna, Boolell also pointed out the importance of Mauritius as a springboard by entrepreneurs of India into Africa. According to the India-Mauritius tax treaty, capital gains that are made in India from investment in the country is not taxed in the Island nation of Mauritius, due to this, investment made though this route avoid the tax payment.

A large chunk of investments made in India are routed through Mauritius in order to avoid the tax payment, which has compelled the Indian government to implement the General Anti-Avoidance Rules (GAAR) so as to prevent misuse of tax treaty.

Boolell said to sort out differences related to tax treaties, the Joint Working Group set up by the two countries on DTAA would meet from August 22-24. In response Krishna said that the nation would assist Mauritius in surveillance of its Exclusive Economic Zone and continue joint efforts to fight piracy, which he described as an expanding menace.

India VIX, a gauge for market’s short term expectation of volatility lost 1.68% at 18.04 from its previous close of 18.35 on Thursday. (Provisional)

The S&P CNX Nifty lost 9.15 points or 0.17% to settle at 5,318.15. The index touched high and low of 5,327.20 and 5,287.75 respectively. 17 stocks advanced against 33 declining ones on the index. (Provisional)

The top gainers on the Nifty were ICICI Bank up 1.72%, M&M up 1.37%, HUL up 1.17%, Cipla up 1.08% and HDFC up 1.01%. On the other hand, Jindal Steel down 3.51%, Sesa Goa down 2.03%, Maruti Suzuki down 2.01%, Tata Power down 1.99% and Asian Paints down 1.88% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.53%, Germany's DAX down 0.48% and Britain’s FTSE 100 down 0.17%.

Asian stocks fell on Friday in spite of policy easing by Bank of England, European Central Bank and The People's Bank of China as they fell to assure investors that the global economy is out of the tempest. In spite of various policy announcement made by the major central banks it had a largely muted effect on investor’s sentiment. On Thursday European Central bank slashed euro zone borrowing cost by 0.25%. Earlier in the day Bank of England decided to keep its interest rate to as low as 0.50% but it emphasized on quantitative easing as it decided to purchase bonds from secondary market worth of 50 billion pounds to boost recession effected economy.

Shanghai Composite rose to its highest level in a week on Friday as Industrial Companies and developers profited from the rate cut made by The People's Bank of China offsetting losses incurred by the banks.  Hang Seng Index was down throughout the day as country’s financial services sector hammered losses due to rate cut by the Chinese Central Bank. While Nikkei’s average fell as investors were unsatisfied after monetary easing by the Central bank of China, Europe and England to revive the economic growth.