Post session - Quick review

Squandering a firm start, Indian equity markets protracted their previous session’s losing spree only to settle near intra-day’s low level, dragging the 30 share barometer index of Bombay Stock Exchange, Sensex and widely followed index of National Stock Exchange, Nifty, below the 17400 and 5250 psychological levels respectively. However, the broader indices managed to keep their head out in green, with Midcap and Smallcap indices ending with modest gains.

After taking off on a firm note, benchmark equity indices lost out substantial ground as early euphoria seen on GAAR deferment by 3 years suggestion by Shome Committee, fizzled by the close of the trade.  Investors’ preferred cashing out their profits on prevailing caution ahead of IMG meet to review the status of 58 coal blocks which both public and private firms failed to develop within stipulated time frame. Slew of sluggish reports, also triggered profit-booking among market-men. Citing high fiscal deficit and renewed weakness in external demand, Morgan Stanley today lowered India’s growth forecast to 5.1% for the current fiscal, from its earlier estimate of 5.8%. Meanwhile, with clear signs that weak global economic conditions continued to be a drag on export orders, manufacturing activity eased further to lowest level since November. According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the nine months to 52.8 in August, 2012.

On the global front, Asian stocks outside Japan and Singapore rose, as comments from US Federal Reserve Chairman Ben S Bernanke and economic reports across the region fueled speculation that central banks will boost stimulus measure. China's purchasing manager’s index, which reflects manufacturing activity, fell to 49.2 in August from July's 50.1 on a 100-point scale. Meanwhile, European shares crept higher by fresh stimulus hopes from major central banks.

Closer home, sector-wise, sugar stocks, namely, Dhampur Sugar Mills, Shree Renuka Sugars, Balrampur Chini Mills and Eid Parry, all were traded in green, as noises for decontrol of the sugar got louder. The minister of state for protocol, Abhishek Mishra, recently said that the government was looking at the sugar sector in a holistic manner and that new policy is expected to be framed in a month or two. Meanwhile, even Auto stocks were in top gear on announcing monthly sales number. Bajaj Auto, Maruti Suzuki and Hero MotoCorp, all gained 0.50%-2.50%.

On the flip side, Aviation stocks, viz, Jet Airway and SpiceJet ran out of fuel, as marking a fourth straight rise since the month of July, Jet fuel or Aviation Turbine Fuel (ATF) prices were hiked by a steep 7.6 per cent or by Rs 5,146.16 per kilolitre (kl), the biggest ever hike that took ATF price to all-time high of Rs 72,282 per kilolitre, with effect from August 31 midnight.

In stock specific activity, Kalyani Steel shot up more than 14.5% intra-day as the Supreme Court (SC) lifted ban on category ‘A’ mines in Karnataka. Opening up about 5 million tonnes production of iron-ore a year again, the Supreme Court has lifted the ban on iron ore mining from 18 Category ‘A’ mines in Karnataka, the country's second-largest supplier, after a suspension of over a year on environment concerns. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1389:1419 while 112 scrips remained unchanged. (Provisional)

The BSE Sensex lost 74.02 points or 0.42% and settled at 17,355.54. The index touched a high and a low of 17,509.99 and 17,349.57 respectively. 10 stocks were seen advancing against 20 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.03% while Small-cap index was up 0.06%. (Provisional)

On the BSE Sectoral front, Capital Goods was up 0.82%, Consumer Durables was up 0.56% and Auto up 0.29% was the sole gainer, while Realty down 1.02%, Oil & Gas down 0.95%, Metal down by 0.95%, Bankex down by 0.82%  and Health Care down by 0.65% were the top losers in the space.

The top gainers on the Sensex were Bajaj Auto up 3.50%, Maruti Suzuki up 2.32%, Coal India up by 2.11%, Cipla up 1.26% and L&T up 1.16% while, Jindal Steel down 2.58%, Tata Power down 1.76%, Tata Steel down 1.63%, Tata Motors down 1.60% and M&M down 1.52% were the top losers in the index. (Provisional)

Meanwhile, with clear signs that weak global economic conditions continued to be a drag on export orders, manufacturing activity eased further to lowest level since November on the back of weak external demand and output disruptions caused by the major power failures in early August. Disrupting businesses and economic activity, sixteen states in northern India, home to almost half of the country's 1.2 billion people, fell into darkness last month as power grids collapsed.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the nine months to 52.8 in August, 2012 tad lower from the reading of 52.9 recorded in July. However, the figure kept above 50 mark that signals increase in production, a number below 50 indicates contraction.

Underscoring the risks to the wider economy from euro zone's 2-1/2 year old sovereign debt crisis, the new export orders sub-index, an indicator of prospective overseas business, fell for second successive month in row to 49.2 from 49.7 in July, its deepest contraction since October. Meanwhile, the domestic orders helped increase output in August; the pace of expansion was the slowest since last November.

The sole bright spot among the survey's otherwise dull data was employment, which expanded at the fastest pace since data collection started 7 years ago. Meanwhile, payroll numbers at manufacturing companies in India increased for the sixth successive month amid reports of business growth. The inflation picture, on the other hand, was a bit mixed. While input price rose at a slower pace in six months, output price inflation picked up due to higher import costs and taxes.

Since manufacturing accounts for around 15 percent of India's gross domestic product, so a slowdown would not augur well for Asia's third-largest economy, which already languishing near its slowest pace of growth in a decade for Q1. Poor showing by the manufacturing sector pulled down the GDP growth to 5.5% in the first quarter, the decade's worst Q1 performance, against the growth figure of 8% in the corresponding period in the last fiscal. The survey, further underscored that with the slowdown partly supply driven and inflation risks still lingering, these numbers underscore that the room for policy rate cuts is very limited at the moment.India VIX, a gauge for markets short term expectation of volatility lost 0.11% at 17.28 from its previous close of 17.30 on Friday. (Provisional)

The S&P CNX Nifty lost 13.50 points or 0.26% to settle at 5,245.00. The index touched high and low of 5,295.80 and 5,243.15 respectively. 16 stocks advanced against 34 declining ones on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy Laboratories up 3.12%, Coal India up 2.66%, Bajaj Auto up 2.65%, Maruti Suzuki up 2.32% and Hero MotoCorp was up 2.21%. On the other hand, SAIL down 2.24%, Tata Power down 2.21%, Jindal Steel down 2.03%, IDFC down 2.01% and Ambuja Cement down 2.00% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 0.49%, Germany’s DAX up 0.44% and the United Kingdom’s FTSE 100 up 0.59%.

Most Asian markets went home in green as statements from US Federal Reserve Chairman Ben S. Bernanke and economic news across the region raised hopes that central banks will boost stimulus measures. Though, Japanese Nikkei ended lower as the yen rose against most of its major counterparts.  Hong Kong and China shares ended higher on Monday, aided by gains in the property sector after weaker-than-expected economic data spurred hopes that Beijing will act to stem the slowdown in the world's second-largest economy.