Post session - Quick review

After consolidating in the previous session, barometer gauges exhibited weakness, on the penultimate day of May month’s F&O series expiry. Showing a volatile trade in the entire session, Indian markets, did not once managed to enter the green. Position squaring after two sessions of gains in the backdrop of weakness of Indian currency, halted the gaining trajectory of the  markets on Wednesday, as some cautiousness ahead of the release of fourth quarter GDP data, kept investor’s off the risky assets. India's annual economic growth is expected to show little sign of growth in the January-March quarter at 6.1 per cent with global economic slowdown, government policy paralysis and a record low currency suggesting little chance of recovery in the current quarter.

Back on Dalal Street, 30 scrip sensitive index, Sensex, which gained over 220 points in the past two sessions, witnessing a nasty laceration of over half a percent got knocked off over a century points to conclude sub 16400 crucial bastions. Meanwhile, the 50 share index, Nifty, after appearing increasingly close to 5000 mark, settled below the psychological level. Weakness griped broader indices, as Midcap and Smallcap indices concluded with colossal loss of over a percentage point. Gloomy global set-up mainly triggered profit booking at Indian equity markets. Asian counterparts witnessed brunt of profit booking as mounting fears about some euro zone countries' ability to service their debt, ate into the risk appetitive of the traders, with emerging signs that China may take a cautious stance on economic stimulus, too weighing down heavily on the sentiment. Bogged down by third downgrade of Spain's credit rating in less than a month by Egan-Jones Ratings, European shares withered under pressure as trader’s worried about the Europe’s fifth-largest economy struggling to save its banking sector, worsening the region’s chronic debt crisis further.

Closer home, rate sensitive’s were thrashed , as Auto, realty and Bankex counters emerged as the major losers, however, gains from stocks belonging to Information Technology and defensive Fast Moving Consumer Goods (FMCG) and Capital Goods (CG)covered up the underlying weakness of the bourses to some extent. Meanwhile, more misses than hits on the earning front, shook investor’s confidence. Tata Motors, emerging as the biggest loser for the session, plunged over 11% after the company’s net profit, disappointing the street, dipped by 31% for FY12. Additionally, earnings of HDIL and Colgate Palmolive too were mood spoilers. On the other hand, Mahindra & Mahindra gained over a half percent after the company’s net profit for the fourth quarter jumped by 44.18% to Rs 874.48 crore.  The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1071: 1625 while 132 scrips remained unchanged. (Provisional)

The BSE Sensex lost 126.43 points or 0.77% and settled at 16,312.15.The index touched a high and a low of 16,428.74 and 16,295.31 respectively. Only 9 stocks advanced against 21 declining on the index (Provisional)

The BSE Mid-cap index lost 1.28% while Small-cap index was down by 1.21%. (Provisional)

On the BSE sectoral front, IT up 0.38%, and TECk up 0.33% were the two gainers, while Auto down 3.97%, Consumer Durables down 2.25%, Realty down 2.18%, Bankex down 1.77%, and Capital Goods down 1.49% were the top losers. (Provisional)

The top gainers on the Sensex were, Sun Pharma up 1.83%, Maruti Suzuki up 1.77%, Tata Power up 1.67%,  Hindustan Unilever up 1.10%, Mahindra & Mahindra up 0.72% and while, Tata Motors down 12.14%, BHEL down 3.19%, DLF down 3.19%, ICICI Bank down 2.62% and Sterlite Industries down 2.16%were the top losers. (Provisional)

Meanwhile, Industrial production is expected to accelerate to 6.9% in FY13 as compared to the projected 3.9% in FY12, as per the economic think tank Centre for Monitoring Indian Economy (CMIE). The acceleration is expected to be on account of the easing of supply side constraints especially an increase in the output of mining sector and also an increase in the generation of electricity. The manufacturing sector is too expected to do substantially better.

The mining sector will show good recovery and will pull up the overall industrial production in FY13. Output in mined products is expected to grow by 5.5% in FY13, after falling by 2% in the preceding year. Coal, which accounts for one third of the mined products output is expected to grow by a healthy 8% on the back of fresh capacity additions. ONGC’s capacity addition is expected to increase production of crude oil as well as natural gas. Crude oil is expected to grow by 6.5% whereas natural gas might see a production increase of 3% as compared to 1% and -9% respectively in FY12.

Power generation is also expected to grow by 13.2% in FY13 as compared to 8% in FY12. Improvement in the availability of coal and capacity additions will push up the generation of thermal power to 14%. This assumes importance as thermal power accounts for 80% of the country’s total power production. Generation of nuclear power may rise by 17.2%.

The manufacturing sector is also expected to show good growth on the back of increase in purchasing power of both urban as well as rural sector and an improvement in the availability of raw materials. Substantial capacity additions are also hinting towards a future growth in the sector. It is expected that the manufacturing will grow by 5.8% in FY13 as compared to 3.9% in FY12. This acceleration is expected to be fuelled by a 10% growth in automobiles and basic metals industries.

India VIX, a gauge for market’s short term expectation of volatility gained 5.28% at 25.30 from its previous close of 24.03 on Tuesday. (Provisional)

The S&P CNX Nifty lost 39.35 points or 0.79% to settle at 4,950.75. The index touched high and low of 4,982.25 and 4,944.90 respectively.13 stocks advanced against 37 declining on the index. (Provisional)

The top gainers on the Nifty were Ambuja cement up 4.88%, ACC up 2.57%, Maruti Suzuki up 1.65%, Sun Pharma up 1.63%, and Hindunilvr up 1.57%. (Provisional)

On the other hand Tata Motors down 12.28%, R Infra down 3.85%, IDFC down 3.73%, BHEL down 3.23% and DLF down 3.03% were the top losers. (Provisional)

The European markets too were trading in red, with France's CAC 40 down by 1.48%, Germany's DAX down by 1.19% and Britain’s FTSE 100 down by 1.53%.

After witnessing two days of rally in previous two sessions, sentiments in the Asian region again turned bearish and most of the Asian counters snapped the day’s trade in the negative terrain on Wednesday on increasing worries that Spain could be forced into seeking a bailout. Moreover, third downgrade of Spain’s credit rating in less than a month by Egan-Jones Ratings also prompted investors to take profits off the table. Adding fuel to the fire, Chinese benchmark edged lower after some of the media reports indicated that Beijing will not provide another massive stimulus.

Meanwhile, Seoul benchmark edged lower on to snap its three-day winning streak while, Japanese Nikkei too edged down, pressured by mounting worries over Spain’s ailing banks. Moreover, Hong Kong shares fell nearly two percent, dragged lower by sectors most sensitive to the Chinese economy on speculation that, China government dashed earlier hopes of introducing fresh stimulus measures to boost its economy.