Post session - Quick review

Snapping two sessions’ losing streak, benchmark equity indices finally showcased some fervor to end near the high point of the session. Much of the hard work, which was done by bourses in the second half of the session, mainly led the outperformance of Indian equity markets against global peers.  The buying which emerged in select blue chip stocks, after two sessions of drubbing could be attributed as reason behind the uptrend of equity markets. However, hopes of diesel price hike, after curtains are drawn to the Monsoon session of Parliament, on September 7, mainly provided the markets with the required fillip to turn yet another dreary session of trade into a exceptional one. The high volume session of trade, 30 share barometer index, of Bombay Stock Exchange (BSE), Sensex, after starting a little above 17350 level, gained over quarter of a percentage, to shut shop above 17400 psychological level. Similarly, widely followed index of National Stock Exchange, Nifty, too gained over quarter points to shut above the crucial 5250 crucial level. Meanwhile, broader indices too amassed gains of around half a percentage. Trade of over 1.15 lac crore was done in terms of volume turnover (Provisional)

Absence of fresh buying action and lack of support from global peers prompted a somber start at Dalal Street. Furthermore, even sentiments were dented after on account of P Chidambaram's Vijay Kelkar Panel submitted fiscal report which underscored that in worst case scenario without any action on subsidies fiscal deficit could balloon up to 6.1 per cent of GDP in the current year. With lack of policy reforms in the current session of Parliament, combined with the cautious undertone of globe ahead outcome of ECB policy meeting on Thursday, market-men had no incentives for pumping into their money into risk asset class, until the speculation that the government will kick-start the reform process in the face of a sharp slowdown in the Indian economy, crept into equity markets.

On the global front, Asian stock markets wavered Tuesday as uncertainties persisted about what authorities in the U.S., China and Europe might do to deal with a souring global economy. Meanwhile, European shares were languishing in red investors turned cautious in the run-up to a European Central Bank (ECB) meeting, with the Swiss market lagging after figures showed an unexpected contraction in the country's economy.

Back on the home turf, almost all sector indices turned green, barring Information Technology and Health Care counters, prominent gainers were Realty, Oil & Gas and Power. Meanwhile, fertilizer stocks such as NFL, Chambal Fertilizers, etc, traded with exuberance on speculation of 10% of urea price hike, a proposal which was deferred by the government earlier in June. Additionally shares of three Public Sector Oil Marketing companies, BPCL, HPCL and Indian Oil Corporation, gained on the buzz of diesel price hike after monsoon session of Parliament ends on September 7, 2012. Media shares, viz., Zee Entertainment Enterprises, Dish TV India, Wire & Wireless India, NDTV, TV Today Network and Sun TV Network gained momentum on account of renewed buying interest ahead of the 31 October 2012 deadline for cable TV digitization in four metro cities of Delhi, Mumbai, Kolkata and Chennai. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1499:1235 while 173 scrips remained unchanged. (Provisional)

The BSE Sensex gained 58.75 points or 0.34% and settled at 17,443.15. The index touched a high and a low of 17,452.70 and 17,308.27 respectively. 19 stocks were seen advancing against 11 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.54% while Small-cap index was up 0.42%. (Provisional)

On the BSE Sectoral front, Realty was up 1.46%, Oil & Gas was up 1.16%, Power up 0.95%, Consumer Durables up 0.88% and Auto up 0.77% was the top gainers, while Health Care down 0.14% was the sole loser in the space.

The top gainers on the Sensex were Jindal Steel up 2.77%, Gail India up 2.66%, Reliance Industries up by 1.90%, Tata Motors up 1.88% and Bharti Airtel up 1.44% while, HDFC down 1.72%, Cipla down 1.64%, Tata Power down 1.18%, ONGC down 0.99% and Wipro down 0.96% were the top losers in the index. (Provisional)

Meanwhile, with the continuing logjam in parliament and BJP's apparent climb down, Prime Minister Manmohan Singh has made it clear that no immediate cancellation of the coal block allocations will be made till the inter-ministerial group submits its report on the issue. The PM also pointed out that he is ready to fight with the opposition on the issue, mean while appealed to them to allow Parliament to function.

The centre has taken this stand to avoid sending the wrong signal internationally, as it would scare away investors who would perceive India as an unreliable destination. At the same time it would open the government to litigation since many of the genuine allottees would be well within their rights to go to courts for relief in the event if the cancellations were made without proper review and investigation.

The Inter-Ministerial Group (IMG) has already been in touch with many of the allottees and had sent them show cause notices in April itself when the Comptroller and Auditor General draft report was ready and government knew that the trouble was brewing. All the coal blocks given from 2004 to 2009 were reviewed and 58 were given show cause notices and they are being reviewed now. However, 26 blocks were de-allocated in 2010 itself.

India VIX, a gauge for markets short term expectation of volatility lost 3.99% at 16.59 from its previous close of 17.28 on Monday. (Provisional)

The S&P CNX Nifty gained 23.10 points or 0.44% to settle at 5,276.85. The index touched high and low of 5,278.35 and 5,233.20 respectively. 32 stocks advanced against 18 declining ones on the index. (Provisional)

The top gainers on the Nifty were Gail India up 2.69%, Jindal Steel up 2.47%, JP Associates up 2.41%, Reliance Industries up 2.33% and Tata Motors was up 1.95%. On the other hand, IDFC down 1.86%, HDFC down 1.83%, Cipla down 1.44%, Tata Power down 0.97% and Sun Pharma down 0.79% were the top losers. (Provisional)

The European markets were trading in red with, France’s CAC 40 down 0.34%, Germany’s DAX down 0.17% and the United Kingdom’s FTSE 100 down 0.78%.

Most Asian shares closed with red mark on Tuesday amid worries over weakening regional and global economic activity. Investors were expecting more stimulus measures from central banks and hopes for progress in tackling Europe's debt crisis lent support. Hong Kong shares fell to their lowest close since July 27, as investors continued to exit counters judged to have grim outlooks. Japan's Nikkei average index eased slightly to end at a four-week closing low for the third session in a row, though the eye-catching move of the day was the 12.4 percent rebound in shares of embattled TV maker Sharp Corp.