Post session - Quick review

Local equity markets commenced the F&O expiry week on lackadaisical note as benchmark equity indices after gyrating in a tight band ended the session in proximity to their neutral line. Squaring up of positions by funds and retail investors a day ahead of the RBI’s monetary policy review mainly led to the lull at Dalal Street. While consensus estimates are that the Indian central bank will keep both repo and reverse repo rates unchanged at 8.5% and 7.5% respectively however, there are some expectations of OMOs. The OMO is a tool by which central bank controls the short term interest rate and the supply of base money in economy, thus indirectly controlling the total money supply.Disappointing start to the Q3 earning season amidst lack of support from global peers also kept the bulls under check. Most of the Asian markets were shut today. Japan's Nikkei index traded with a positive bias. In global news, talks to cut Greece's debt, which would help the crisis hit country to get a second bailout package, remained inconclusive over the weekend. Meanwhile, most of the major US indices ended the day in the green on Friday as increasing home sales in the US added to signs the world’s biggest economy is recovering. However, the opening of European markets provided some solace to the Indian equity markets. European shares inched higher on Monday led by banking and cyclical stocks ahead of a meeting by euro zone finance ministers at which they will discuss what terms of a Greek debt restructuring deal they are ready to accept.

Back home, earning season got another setback with Oil & gas major- Reliance Industries (RIL) reporting a 14 percent fall in October-December net profit on Friday, its first quarterly profit drop in more than two years as gross refining margins fell sharply, also pounded the sentiment. Meanwhile, in today’s trade, India's biggest carmaker- Maruti Suzuki-reported a bigger-than-expected 63.6% fall in quarterly net profit as high interest rates and rising fuel costs hit demand for cars in Asia's third-largest economy. However, country's largest engineering conglomerate -Larsen & Toubro- gained over 0.25%. The company flagged a rise in industrial output and easing inflationary pressure as positives after reporting a better-than-expected 18 percent rise in quarterly profit, which was mainly helped by higher other income. Moreover, Idea Cellular-captured gains of over 3.50% after reporting a less-than-expected 17 percent fall in quarterly profit. On the consolidated basis the group has posted a net profit decline of 17.31% to Rs 200.98 crore for the quarter ended December 31, 2011 as compared to Rs 243.05 crore in the same quarter last year.

On the BSE Sectoral front, stocks from Metal, Oil & Gas, Consumer Durable counters were the one’s that suffered maximum brunt of profit booking. On the flip side, stocks from Fast Moving Consumer Goods (FMCG), Realty and Technology pivotals pruned the losses of the frontline indices. The 30-share BSE index, which had gained over 287 points in the previous two sessions, ended the session in proximity to 16750 bastion with a gain of over 10 points. However, the wide-based National Stock Exchange Nifty index too losing traction ended near to its neutral line with slender loss. Though, the gains at the broader space remained intact as BSE Midcap and Smallcap index both ended positive. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1438:1345 while 131 scrips remained unchanged. (Provisional)

The BSE Sensex lost 4.57 points or 0.03% and settled at 16,734.44. The index touched a high and a low of 16,784.00 and 16,659.32 respectively. 16 stocks advanced against 13 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index gained 0.04% while Small-cap index was up by 0.21%. (Provisional)

On the BSE Sectoral front, FMCG up 0.86%, TECk up 0.83%, Realty up 0.81%, Auto up 0.44% and Capital Goods up 0.44% were the top gainers while Metal down 2.35%, Oil & Gas down 1.65%, Consumer Durables down 0.79%, PSU down 0.33% and Health Care down 0.22% were the only losers.

The top gainers on the Sensex were Maruti Suzuki up 6.44%, Bharti Airtel up 3.23%, DLF up 2.99%, BHEL up 2.67% and Cipla up 1.67%.

On the flip side, Sterlite Industries down 6.06%, Hindalco Industries down 4.88%, Hero MotoCorp down 4.55%, Coal India down 2.88% and RIL down 2.84% were the top losers in the index. (Provisional)

Meanwhile, even as India’s economy is expected to expand at a weaker pace of 6.8% in calendar year (CY) 2012, against prior estimates of 8%, though the growth rate for Asia’s third largest economy in CY 2013 is forecasted to pick up momentum steadily and clock growth rates of around 9.5%, according to Ernst & Young (E&Y), a global audit and consulting firm. In its previous Rapid-Growth Markets Forecast (RGMF) released in October 2011, the global audit and consulting firm had projected India’s economic growth at 8% for CY 2012.

The recent RGMF advocates that despite the moderation, India's medium to long term growth outlook remains in place for a swift resurgence as improvement in both domestic and external demand will lead to the improvement in growth. Amid expectations of an improvement in global economic environment, fading liquidity tightening woes, increase in investment and rebound in exports, the GDP growth rate is expected to accelerate strongly in CY13 at 9.5%.

Underscoring the fact that the rapid-growth markets (RGMs) collectively are likely to witness a growth rate of around 5.3% this year, E&Y appeared confident that RGMs’ robust economic performance will not be derailed by slackening demand, turbulent and volatile markets and credit liquidity problems in Europe, though it may have had some impact in the recent past. Meanwhile, the E&Y report also expects the Europe to dip into mild recession in H1 2012 while the US to register modest growth in 2012.

India VIX, a gauge for market’s short term expectation of volatility gained 0.81% at 22.14 from its previous close of 21.96 on Friday. (Provisional)

The S&P CNX Nifty lost 6.50 points or 0.13% to settle at 5,042.10. The index touched high and low of 5,059.55 and 5,021.35 respectively. 24 stocks advanced against 26 declining ones on the index. (Provisional)

The top gainers on the Nifty were Maruti up 5.75%, BHEL up 2.94%, DLF up 2.92%, Bharti Airtel up 2.82% and ITC up 1.81%.

On the other hand, Sterlite down 6.01%, Hindalco down 4.91%, Hero MotoCorp down 4.18%, Kotak Bank down 3.98% and Coal India down 3.19% were the top losers. (Provisional)

The European markets were trading on a mix note, with France's CAC 40 up 0.10%, Germany's DAX down 0.68% and Britain’s FTSE 100 up 0.20%.

In Asia, only a handful of markets remained open for trade on Monday. Japanese markets ended flat on Monday to halt a four-day winning streak, with early gains capped by market worries over Greece after negotiations with private creditors failed, raising the stakes for a meeting later in the day at which euro zone finance ministers will decide terms for a debt restructuring. Earlier, Nikkei opened up for the fifth day in a row as US home sales rose to the highest level in almost a year.

Olympus Corp, battling to emerge from a $1.7 billion accounting scandal, zoomed over 8% after the Tokyo Stock Exchange kept it listed, meaning it will be easier to raise capital, though with a special designation for firms needing to urgently improve internal management.

Nikkei 225 was down marginally by 0.46 points or 0.01% to 8,765.90.

Stock markets in China, Hong Kong, Indonesia, Malaysia, South Korea, Singapore and Taiwan remained closed on Monday in observance of a public holiday.