Post session - Quick review

Indian equity markets managed to negotiate a green close for the first trading day of the fresh month, as after starting off on a quiet note, benchmark equity indices lured significant investor’s attention to conclude near the high point. Nervousness ahead of submission of final report on GAAR by Shome panel combined with anxiety ahead of quarterly corporate earnings, kept the trade lackluster at Dalal Street for the first half of the session. Nevertheless, the hopes of more economic reforms being in store got the markets going, which in the second half of the trading session showcased immense vigor to end vehemently in green. Thus, after puffing up gains of over 3/10 percent, Sensex, concluded above the 18800 level. Similarly, widely followed index, Nifty, too added 0.15% to end above the 5700 crucial level. Degree of outperformance was staged by broader indices, which went home with gains of over 0.7% each.

On the global front, European shares jumped at start of new quarter, as investor’s setting aside worries over the growth outlook and Spain's debt problems on Monday, took fresh positions in European equities. Meanwhile, Asian pacific shares got a sedate close official data showed manufacturing activity in China, the world's second-biggest economy, contracted for a second straight month in September.

Back on the home turf, sectorally, Information Technology, Capital Goods and Auto counters luring investor’s maximized the gains of the bourses. Conversely, stocks from Oil & Gas, Bankex and Realty topping the selling list, limited the upside chance of benchmark equity indices. Going further in sector specific activity, Cement shares, viz, ACC, Ambuja Cement and Shree Cement extended their winning streak for yet another session triggered by the hopes construction activity picking up pace as monsoon season draws to its close. Similarly, Infrastructure-related stocks too firmed up on hopes of revival of construction activity. Additionally, auto stocks hogged substantial limelight after posting sturdier September sales than expected. India's largest passenger car maker Maruti Suzuki rose 0.50% on reporting 10% surge in September sales year-on-year to 93,988 units. Meanwhile, TVS Motors added 2% as the company's total sales increased 10 percent M-o-M to 1.7 lakh units in September.

On the flip side, Metal stocks declined as China’s, world's top consumer of most metals’, manufacturing shrank for the second month in a row in September 2012. Further, shares of organized retailers too witnessed some profit booking on concerns of increased competition following reports that US retail giant Wal-Mart Stores Inc. will soon apply for the Indian government's permission to set up stores in the country. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1799:1111 while 127 scrips remained unchanged. (Provisional)

The BSE Sensex gained 68.86 points or 0.37% and settled at 18,831.60. The index touched a high and a low of 18,838.54 and 18,745.28 respectively. 14 stocks were seen advancing while 16 stocks were declining on the index (Provisional)

The BSE Mid-cap index was up by 0.86% while Small-cap index was up 1.44%. (Provisional)

On the BSE Sectoral front, IT up by 1.88%, TECk was up 1.49%, Capital Goods was up 0.69%, Auto up by 0.54% and Power was up 0.53% were the top gainers, while Oil & Gas down by 0.18% and Bankex down by 0.02% were the only losers in the space.

The top gainers on the Sensex were Infosys up 3.00%, Tata Motors up by 2.26%, Jindal Steel up 1.99%, BHEL up 1.90% and Hindalco Industries up 1.74%, while, Bajaj Auto down by 1.04%, HDFC Bank down by 0.91%, Tata Power down by 0.84%, ONGC down by 0.73% and HDFC down by 0.50% were the top losers in the index. (Provisional)

Meanwhile, supported by faster output growth and rising export orders, India’s manufacturing activity growth in September held steady compared with August. Measures by the US Federal Reserve and the European Central Bank to revive their economies mainly pushed foreign demand for Indian goods higher. At the same time, order book volumes increased for the forty-second successive month on stronger demand, good product quality and increasing marketing. However, the report cautioned the chances of rise in inventories dampening the output growth in coming months.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at steady space of 52.8 in September, unchanged from August reading. A PMI reading above 50 indicates expansion in the sector, while one below suggests decline. In a sign of relief, the new export orders sub-index, an indicator of prospective overseas business, jumped to 53.8 from 49.2 in August, thereby positing biggest rise in almost two years.

Additionally seventh successive month of growth was recorded for employment in the month of September, with payroll numbers increasing to meet stronger demand, thereby signaling expansions in marketing departments. The inflation picture, on the other hand, was a bit mixed. While input prices rose at a faster clip on the back of higher raw material and diesel prices, output prices rose somewhat less, thereby adding to the Reserve Bank of India's dilemma of boosting growth while trying to rein in stubbornly high inflation.

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 is 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, although estimates the growth in the manufacturing sector to remain subdued, but at the same has underscored the implementation of recently announced reforms to help facilitate a gradual recovery during the second half of the fiscal year.

India VIX, a gauge for markets short term expectation of volatility gained 1.11% at 16.34 from its previous close of 16.16 on Friday. (Provisional)

The S&P CNX Nifty gained 16.30 points or 0.29% to settle at 5,719.60. The index touched high and low of 5,722.95 and 5,694.00 respectively. 26 stocks advanced against 24 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates was up 4.92%, Ambuja Cement up 4.21%, Reliance Infrastructure up 2.97%, Infosys up 2.90% and Grasim India was up 2.85%. On the other hand, DLF down 1.86%, Bank of Baroda down by 1.62%, Bajaj Auto down by 1.12%, HDFC Bank down by 1.11% and PNB down 1.11% were the top losers. (Provisional)

The European markets were trading in green with, France’s CAC 40 up 1.39%, Germany’s DAX up 1.27% and the United Kingdom’s FTSE 100 up 0.96%.

Asian shares ended mostly lower on Monday as weak manufacturing data from China and continued concerns over debt-ridden Spain. Investor sentiments were shattered with the unimpressive result of the quarterly Tankan survey, at the beginning of a new quarter. Japan’s stocks ended at a three-week low after key data from Japan. Trading volumes were weak than usual with stock markets as China, Hong Kong and South Korea were closed today for holiday.