Post session - Quick review

It was a rough start to the bourses of the fresh week and bourses falling freely, settled near the lowest point of the day. Logjam in Parliament, which entered its second week with BJP members stridently demanding the resignation of Prime Minister Manmohan Singh on the issue of CAG coal block allocation report sent Indian equity markets into tailspin.  Moreover, reluctance of investor’s to add position in the F&O week, in absence of any positive trigger, both at home as well as on global front, also added to the Monday blues for Indian equity markets.

Much of the obliteration came to the local equity markets in the noon deals, with the sharp slide of Power, steel and infrastructure sector stocks, after opposition party, besides hitting out at Prime Minister’s issues statement on coal controversy, sought cancellation of allocated coal block. The market sentiment, in fact, remained largely unscathed post Prime Minister Statement of challenging the CAG report findings before PAC. However, the continued impasse between government and the opposition over Prime Minister Manmohan Singh’s resignation on coal-gate, which made investors believe that no major reform could be expected during the monsoon session of Parliament, also added to the bout of pessimism at Dalal Street.

30 share barometer index of Bombay Stock Exchange (BSE), Sensex, offloading over a century of points, settled sub 17,700 psychological mark, while 50 share widely followed index of National Stock Exchange ( NSE), Nifty, too sliding over half a percentage points, settled at 5350 mark. The losses were colossal for broader indices, as both Midcap and Smallcap index, went home down by close to a percent. Meanwhile, trade of over 1.6 lac crore was done in terms of volume turnover.

On the global front, Asian shares too ended glum as investor’s turned cautious awaiting further clues from the annual Jackson Hole symposium to be hosted by the Kansas Federal Reserve later in the week. Meanwhile, looming recession across the euro zone kept European shares and the single currency under pressure on Monday.

Closer home, telecom stocks, barring, Bharti Airtel, viz Idea Cellular, Reliance Communication, Tata Communication and Tata Teleservices ended mostly lower even after report suggested that Supreme Court allowed more time for 2G auction. Besides, allowing the government to complete a mobile phone airwaves auction by January 11, 2013, the Supreme Court on Monday allowed those carriers whose licences are set to be revoked to operate until January 18, 2013. Meanwhile, Shares of Indian oil refiners gained on hopes for higher margins as Venezuelan gasoline exports are expected to be impacted because of a blaze at the country's biggest refinery. Reliance Industries and Cairn India added gains of over half a percent.  Beside Oil & Gas, defensive Health Care counter, to made efforts to minimize the loss of the bourses, which by the end of the trade, were all in vain. Stocks from Realty, Bankex and Capital Goods were the weakest link of the trade. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1029:1770 while 137 scrips remained unchanged. (Provisional)

The BSE Sensex lost 105.55 points or 0.59% and settled at 17,677.66. The index touched a high and a low of 17,820.07 and 17,662.21 respectively. 11 stocks were seen advancing against 19 declining ones on the index (Provisional)

The BSE Mid-cap index lost 1.10% while Small-cap index was down 0.97%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 0.44% and FMCG up 0.27% were the only gainers, while Realty down 2.68%, Bankex down 2.00%, Capital Goods down 1.92%, Metal down 1.47% and Power down 1.38% were the top losers in the space.

The top gainers on the Sensex were M&M up 1.38%, RIL up 0.75%, Sun Pharma up 0.69%, ONGC up 0.63% and Cipla up 0.60% while, Jindal Steel down 5.07%, BHEL down 3.01%, SBI down 2.60%, ICICI Bank down 2.21% and Tata Power down 2.14% were the top losers in the index. (Provisional)

Meanwhile, India’s growth story in recent past which has been substantially driven by large infrastructure investments has been hit badly. Reserve Bank of India, in its ‘Annual Report 2011-12’, has blamed nearly 50% drop in new investments in large projects, to be the primary reason behind continued growth deceleration of the Indian economy in the current fiscal. Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter and fiscal 2011-12 at 5.3% and 6.5% respectively.

The Reserve Bank’s collation from banks and financial institutions underscored that envisaged total fixed investments in new projects that were sanctioned financial assistance during 2011-12 have slipped by 46% to about Rs 2.1 trillion from Rs 3.9 trillion a year ago. This drop was mainly led by infrastructure and metals sectors. The envisaged investment in infrastructure dropped by a whopping 52% to Rs 1 trillion in FY12 from Rs 2.2 trillion in FY11, with power and telecom accounting for most of this fall, the report pointed.

While, the investment in the telecom sector has dried up, that in roads, ports and airports has also decelerated sharply, the report added. Road projects have also slowed down due to problems relating to land acquisition, legal and environmental clearances as also tightening of financial conditions. Road tendering activity has suffered significantly in Q1 of 2012-13 after a record tendering by NHAI in 2011-12.

Gross bank credit to infrastructure outstanding as of April 2012 was Rs 6.2 trillion. Data on sector-wise gross deployment of bank credit shows that its year-on-year growth slipped by 14% in FY12 compared to 38% growth in FY11. Meanwhile, the exposure of banks to the power sector is about Rs 3.3 trillion as per the sector-wise deployment of credit obtained from 47 scheduled commercial banks that account for 95 per cent of total non-food credit.

India VIX, a gauge for markets short term expectation of volatility gained 1.91% at 16.47 from its previous close of 16.16 on Friday. (Provisional)

The S&P CNX Nifty lost 36.25 points or 0.67% to settle at 5,350.45. The index touched high and low of 5,399.15 and 5,346.65 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were M&M up 1.45%, Power Grid up 1.02%, Cairn India up 0.82%, Cipla up 0.72% and HUL was up 0.72%. On the other hand, Jindal Steel down 5.00%, PNB down 5.00%, JP Associates down 3.66%, IDFC down 3.51% and Axis Bank down 3.45% were the top losers. (Provisional)

The European markets were trading mixed, with France's CAC 40 up 0.06% and Germany's DAX down 0.11% while, FTSE100 remains shut on account of UK Summer Bank holiday.

Most Asian markets went home with red mark as investors were tired of waiting for central banks in China and the US to take some measures to support business activity in the world's largest economies. Meanwhile, Apple’s court victory in a high-stake patent dispute sent shares of Samsung Electronics and its affiliates into a tailspin, which also pressurized the markets. However, Japan's Nikkei share average inched higher on Monday, rebounding from the previous session's sharp loss, on hopes that US Federal Reserve will soon launch further stimulus, while Hong Kong shares ended down.