Post session - Quick review | Markets get a breather post two sessions of drubbing|
After getting a gap-up opening, Indian equity markets trimmed substantial portion of gains in the choppy session of trade, nevertheless the close still turned out to be positive one as trader’s continued to scoop fundamentally strong blue chip stocks available at attractive prices, after previous session’s drubbing. However, not much of the gains could be mustered in by the frontline equity indices after IMF lowered its forecast for India's economic growth rate to 4.9% this year, despite series of reforms undertaken by the government to attract foreign investment and boost business sentiment in the country. Yet some lower level buying in the closing deals of the trade, which failed to lift barometer share index, Sensex, above its 18,800 psychological level, took broadly followed 50 share index, Nifty, above the 5700 crucial mark by the close of the trade. Additionally, broader indices too luring some traction went home with gains of over 3/10 percent.
Furthermore, subdued global set-up also restricted the upside chance of local equity markets. Asian counterparts witnessed a mixed close on Tuesday, with shares in the mainland sharply outperforming as the People's Bank of China extended its efforts to ease monetary conditions, while a rise in iron ore prices aided resource companies and pushed the Sydney markets to a new 14-months high level. The PBOC introduced CNY265 billion into the money market, in an attempt to bolster a slowing economy. Additionally, European markets too were showcasing varied trend as concerns over slowing global growth and its impact on corporate earnings weighed on the sentiment. Closer home, weakness crept in at Dalal Street via stocks belonging to Oil & Gas, Power and Auto counters - the top three losers among 13 sectoral pivotals on BSE sectoral front. However, stocks from Consumer Durable, Healthcare and Information Technology space toppling the buying list, mainly provided breather to local equity markets after two session of downfalls.
Meanwhile, Auto stocks ran out of steam after Finance Ministry slashed rebates paid on certain types of exports. Auto makers get refunded a portion of local taxes paid for components used in vehicles, motorcycles or auto parts that are sold overseas. Due to the cut, rates on motorcycles, 3-wheelers and medium and heavy commercial vehicles have now been slashed to 2% from 5.5%. Reeling under pressure after this development were Bajaj Auto, Tata Motors, which lost over 1% by close of trade.
Additionally, public sector oil marketing companies, viz, BPCL, HPCL and IOC, too surrendered ground after an announcement of cut in petrol price from Monday, 8 October 2012, midnight. With a view to pass on to consumers the benefit of the rupee's growing strength against the dollar in recent times, state run, Indian Oil Corporation (IOC) slashed petrol price by 56 paise. The prices of fuel in Mumbai will come down by 71 paise to Rs 74.43 a litre and by 70 paise in Kolkata to Rs 75.44 a litre. Furthermore, telecom stocks, namely, Bharti Airtel, Idea Cellular and Reliance Communications rang off as Empowered Group of Ministers recommended a one-time fee on existing operators for spectrum they hold beyond 4.4 MHz.
On the flip side, iron companies like, JSW Steel, Tata Steel and Jindal Steel lured some traction on report that mines minister Dinsha Patel has asked finance minister to immediately roll back the export duty on iron ore from 30% to 15%. Further even, pharmaceutical stocks, such as Cipla, Dr Reddy’s Lab, sweetened on expectations of favorable stance in drug pricing case that comes up for hearing in India's Supreme court later in the day. Additionally, private sector lenders, such as Yes Bank and ICICI bank, too mustered some gains on expectations that their July-September earnings will prove more resilient than their public sector counterparts. Meanwhile, trade of over Rs 1.30 lac core was done in terms of volume turnover. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1544:1324 while 141 scrips remained unchanged. (Provisional)
The BSE Sensex gained 68.54 points or 0.37% and settled at 18,777.52. The index touched a high and a low of 18,885.84 and 18,722.05 respectively. 18 stocks were seen advancing while 12 stocks were declining on the index (Provisional)
The BSE Mid-cap index was up by 0.49% while Small-cap index was up 0.36%. (Provisional)
On the BSE Sectoral front, Consumer Durables was up 1.76%, Health Care was up 1.16%, FMCG up 0.98%, Capital Goods was up 0.97% and IT up 0.96% were the top gainers, while Oil & Gas down by 0.50%, Power down by 0.21% and Auto down by 0.13% were the top losers in the space.
The top gainers on the Sensex were L&T was up 2.15%, Sun Pharma up 1.57%, Infosys up by 1.49%, Sterlite Industries up 1.44% and Cipla up 1.42%, while, GAIL India down by 2.86%, BHEL down by 1.85%, Bharti Airtel down by 1.63%, Hindalco Industries down by 1.33% and NTPC down by 1.31% were the top losers in the index. (Provisional)
Meanwhile, amid struggling with reform measures to alleviate the national financial situation by triggering customer confidence, the government got another blow from the International Monetary Fund (IMF), which has forecasted that India's growth rate will slow-down below 5% this year. It also opined that the new reforms will aid the growth rate to bounce back in 2013 and sketched it to grow by 6% next year, compared to an earlier 6.5% projection.
It has blamed the corruption scandals, tough tax measures, weaker environment, looming governance issues, rupee depreciation, red tape and nationwide blackouts in the summer highlighting concerns about weak infrastructure, for trimming down the rate. It noted that the peaking current account deficit, lowering business sentiments and trimmed inflow of investments, are responsible for the low performance.
In 2011, India had recorded a growth of 6.8% however it dipped recently to 5.5%, marking its lowest in three years. It has also warned China that it’s economic growth is expected to weaken by 7.8% this year, amid continuing euro zone crisis and United States economic slow-down.
India VIX, a gauge for markets short term expectation of volatility lost 2.15% at 16.80 from its previous close of 17.17 on Monday. (Provisional)
The S&P CNX Nifty gained 26.10 points or 0.46% to settle at 5,702.10. The index touched high and low of 5,728.65 and 5,677.90 respectively. 29 stocks advanced against 21 declining ones on the index. (Provisional)
The top gainers on the Nifty were Ultratech Cement was up 2.61%, L&T up 2.41%, Ranbaxy Laboratories up 2.04%, Sun Pharma up 2.00% and Lupin was up 1.88%. On the other hand, GAIL India down 2.93%, BHEL down by 1.93%, Bharti Airtel down by 1.83%, NTPC down by 1.54% and Hindalco Industries down by 1.37% were the top losers. (Provisional)
The European markets were trading on a mixed note with, France’s CAC 40 up 0.14%, Germany’s DAX down 0.47% and the United Kingdom’s FTSE 100 down 0.24%.
Asian markets ended mixed on Tuesday with the Euro zone’s debt worries impact getting limited. The mainland China's shares gained sharply because of rise in iron ore prices, which helped resource companies to great extent. Investor’s sentiments improved amid The People's Bank of China’s (PBOC) step of introducing 265 billion yuan into the money market, in an attempt to ease monetary conditions and strengthen the slowing economy. Hong Kong market ended with fine gains amid oil companies rally. However, Japanese market went home with red mark following a public holiday.
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