Recovery in last leg of trade help benchmarks to end near previous close level

Key benchmark indices showcased buoyancy in last leg of trade and managed to end the session near their pre-close level as investors went for bargain hunting on hopes of some progress on pending economic reforms. Moreover, dismal IIP data for June also raised pressure on the policymakers to take decisive action to revive economic growth. Though, the bourses traded in the red for most part of the day’s trade. The benchmark equity indices not only went on to accumulate weekly gains of over two percent but also managed to regain their psychological 17,550 (Sensex) and 5,300 (Nifty) levels.

After the weak opening, selling got intensified mostly led by fall in shares of State Bank of India (SBI). The stock fell over four percent as bank’s gross non-performing assets (NPAs) rose to 4.99% in the April-June quarter as against 3.52% in the same quarter previous year while net NPAs increased to 2.22%. Though, the PSU bank has registered a surge of 136.91% in its net profit at Rs 3751.56 crore for the quarter under review as compared to Rs 1583.55 crore for the same quarter in the previous year. Total income of the bank has increased by 16.89% at Rs 32415.49 crore for Q1FY13 as compared Rs 27731.67 crore for the corresponding quarter previous year. The stock was also in focus after UBS downgraded it to ‘sell’ from ‘buy’, saying that a weak monsoon would add to its already high non-performing loans.

The global cues too dampened the sentiments and Indian frontline indices extended their fall breaching crucial 5,300 (Nifty) and 17,500 (Sensex) bastions for a while in the mid noon trade. Asian stock indices snapped the session mostly lower, as investors stepped back after a five-day rally, as worse-than-expected Chinese trade data stoked worries about decelerating growth across the world. Moreover, European stock indices were trending lower after sluggish trade data from China fueled more worries about a heightened slowdown in the world’s second largest economy.

Closer home, the sentiments were also bashed by auto space, which remained one of the top losers as car sales in India witnessed a slow growth of 6.7% in July at 1.43 lakh units, the slowest in nine months and less than the industry estimates, as high interest rates and increase in excise tax weakened the demand. However, the downside remained capped as buying was witnessed in software and technology pack. Stocks like Tech Mahindra, HCL Technologies, Tata Consultancy Services and Mahindra Satyam edged higher in the trade after better than expected US economic data on August 9, 2012, and on a weak rupee. Moreover, FMCG stocks also remained in demand, with Hindustan Unilever (HUL), ITC and Bajaj Corp hitting record high and Tata Global Beverages hitting 52-week high.

Meanwhile, the NSE’s 50-share broadly followed index Nifty, dipped by just 2.50 points however, settled well above its psychological 5,300 support level moreover, Bombay Stock Exchange’s Sensitive Index -Sensex- dropped by three points but, managed to hold psychological 17,500 mark. Moreover, broader markets too performed in line with their larger peers and settled mixed.

The markets fell on weak overall volumes of over Rs 1.48 lakh crore while the turnover for NSE F&O segment too remained on the lower side as compared to that on Thursday at over Rs 0.93 lakh crore. The market breadth was remained in the favour of declines, as there were 1,182 shares on the gaining side against 1,577 shares on the losing side while 129 shares remained unchanged.

The BSE Sensex lost 3.13 points or 0.02% to settle at 17,557.74, while the S&P CNX Nifty declined by 2.55 points or 0.05% to close at 5,320.40.

The BSE Sensex touched a high and a low of 17,590.61 and 17,471.37 respectively. However, the BSE Mid cap index was up by 0.02% and Small cap index down by 0.29%.

Hindustan Unilever up by 2.13%, Sterlite Industries up by 1.65%, Maruti Suzuki up by 1.61%, TCS up by 1.53% and Infosys up by 1.50% were top gainers on the Sensex, while SBI down by 4.26%, Tata Motors down by 3.07%, Hero MotoCorp down by 2.27%, Tata Steel down by 1.45% and Coal India down by 1.09% were top losers on the index.

The major gainers on the BSE sectoral space were, IT up by 1.33%, TECk up by 1.13%, FMCG up by 0.69%, Oil & Gas up 0.27% and Metal up 0.09%, while Consumer Durables down by 1.68%, Auto down 1.22%, Bankex down 0.85%, PSU down 0.84% and Realty down by 0.67% were major losers on the BSE sectoral space.  

Meanwhile, car sales in India witnessed a slow growth of 6.7% in July at 1.43 lakh units, the slowest in nine months and less than the industry estimates, as high interest rates and increase in excise tax weakened the demand. During April-July 2012, overall automobile exports registered a negative growth at 4.03% and passenger vehicles and commercial vehicles both grew by 9.14% as per the data released by the Society of Indian Automobile Manufacturers (SIAM).

Further, the lock-out at Maruti Suzuki’s Manesar plant, country’s largest car maker has deeply affected the sales, though its domestic sales in July stood at 71,024 units compared to 66,504 units in July last year, up 6.80%. However, with no production since July 19, it is likely to affect the entire car sector in the approaching month. Moreover, interest rates at 12-15% range, surging petrol prices and the difference between petrol and diesel prices remaining high, volume growth is likely to slow down in coming months.

SIAM’s director general Vishnu Mathur hopes newly appointed Finance Minister, P Chindambaram would provide a solution to boost up the sales especially around the upcoming festival season along with some measures on the petrol and diesel price front.

The S&P CNX Nifty touched a high and low of 5,330.10 and 5,294.10 respectively.

The top gainers on the Nifty were BPCL up by 3.59%, Maruti up by 2.46%, Kotak Bank up by 2.33%, TCS up by 2.13% and Sterlite Industries up by 2.11%. On the flip side, SBI down by 4.11%, Tata Motors down by 3.24%, Ranbaxy down by 3.05%, Bank of Baroda down by 2.55%, and IDFC down by 2.37% were the major losers.

The European markets were trading in red, France's CAC 40 down by 0.82%, Germany's DAX was down by 0.64% and United Kingdom’s FTSE 100 was down by 0.27%.

Most of the Asian markets fell on Friday on the back of weak Chinese trade data that reinforced worries over slowdown in the world's second largest economy. China's General Administration of Customs said exports grew just one percent in July year-on-year to $176.9 billion, while imports rose 4.7 percent to $151.8 billion, cutting the trade surplus to $25.1 billion from $31.7 billion in June. Some profit-taking after a week-long rally also added to selling pressure. Though, investor’s expectations for monetary policy easing capped some losses but Singapore, Taiwan and Indonesian markets despite opening in green fell after China released its trade data.