Post session - Quick review

After showcasing spectacular comeback over previous trading session, Indian stock markets managed to negotiate a green close, on an apparently lackluster day of trade. Barometer gauges, showcased amazing reversal of trend and after getting a muted start closed near the high points of the day. Registering positive close for all the five trading session, 50 share index-- Nifty and 30 scrip sensitive -- Sensex, scored over gigantic 4% gains for the week. For the last trading session, value buying in fundamentally strong blue chip stocks during the last hour of trade combined with rupee recovery helped the markets gain, concluding the lackluster session with modest gains. Barometer gauges, surpassing the 200 days DMA, found support near the 16,600 levels (Sensex) and 5000 levels (Nifty) respectively. Meanwhile, the session, was also fruitful, for broader indices, which slashing losses, jumped back in to the green terrain.

Local barometer gauges showcased stiff resistance in the face of pessimistic global milieu as lack of clarity from Federal Reserve Chairman Ben on potential US monetary stimulus, fears of a potentially weak batch of key Chinese data on Saturday after surprise rate cut, and concerns about Spanish banking woes, sapped global appetite for risky asset class such as equities. On the global front, Asian pacific shares failed to put forth a positive close despite the surprise rate cut in China. Meanwhile, European shares slumped after a rough session in Asia and a day after Spain’s credit rating was cut by Fitch Ratings amid concerns for the government’s finances and problems in the financial sector. Fitch on Thursday slashed Spain’s rating by three steps, leaving it to two notches above junk. The agency cited Spain’s economic problems and the cost of recapitalizing its struggling financial sector, which Fitch said could reach as much as 100 billion euros, or $125 billion.

Closer home, markets for almost entire session, oscillated in red after RBI deputy governor stating domestic interest rates not too high to impact economic growth, doused rate cut hopes in upcoming monetary policy review on June 18, 2012. Featuring among the worst list of performers on BSE sectoral space were stocks from Information Technology, Consumer Durable and Health care. Fall was led by declines in software services exporters on growing concerns that a weaker global economy would hit IT spending. On the flip side, depicted optimistic momentum ere stocks from Capital Goods, Realty and Fast Moving Consumer Goods (FMCG) counters. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1338:1354 while 146 scrips remained unchanged. (Provisional)

The BSE Sensex gained 106.77 points or 0.64% and settled at 16,755.82. The index touched a high and a low of 16,767.77 and 16,485.02 respectively. 23 stocks were seen advancing against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.21% while Small-cap index was up 0.24%. (Provisional)

On the BSE Sectoral front, Capital Goods up 2.31%, Realty up 1.42%, FMCG up 1.20%, Power up 1.01% and Bankex up 0.75% were the top gainers while IT down 0.62%, TECk down 0.25% and Consumer Durables down 0.09% were the only losers.

There top gainers on the Sensex were Sterlite Industries up 3.70%, Gail India up 3.59%, L&T up 3.31%, ITC up 1.97% and BHEL up 1.77% while, Maruti Suzuki down 1.46%, Bajaj Auto down 1.11%, Infosys down 1.02%, ONGC down 0.97% and TCS down 0.84% were the top losers in the index. (Provisional)

Meanwhile, after vowing to resort to unpopular austerity measures to deal with India’s fiscal problems last month, Union Finance Minister Pranab Mukherjee unveiled a slew of austerity measures which according to preliminary estimates could help the government save around Rs 1,000 crore of the public exchequer. The finance ministry’s austerity measures came after recent series of economic reports highlighted that the nation’s economy is going through a turbulent phase and has slowed to the lowest levels not seen in last nine years while government’s fiscal deficit widened.

In its bid to cut spending, the ministry unveiled various measures including cutting down on non-plan expenditure by 10 percent, barring ministers and official delegations from holding conferences in five-star hotels, buying new vehicles or travelling abroad unless absolutely necessary. The austerity steps also impose a total ban on creating new government posts.

Of the government’s total budgeted expenditure of Rs 14.9 lakh crore for 2012-13, plan expenditure stands at Rs 5.2 lakh crore while non-plan expenditure is Rs 9.7 lakh crore. It is estimated that the 10 percent cut on non-plan expenditure would additionally save the government more than Rs 50,000 core which could lead the government to borrow less and still meet fiscal deficit targets. With the fiscal deficit shooting up to 5.7% of the GDP in previous fiscal due to higher subsidy expenditure, Mukherjee in his budget 2012-13 had announced to limit its subsidies to 2% of the GDP.

The austerity measures were also extended to government’s autonomous bodies funded by the government like Agricultural and Processed Food Products Export Development Authority; Federation of Indian Export Organisations; Telecom Regulatory Authority of India; Income Tax Appellate Tribunal; Securities and Exchange Board of India; National Highways Authority of India; Pension Fund Regulatory Development Authority; Reserve Bank of India and National Institute of Public Finance & Policy

India VIX, a gauge for market’s short term expectation of volatility lost 0.71% at 23.47 from its previous close of 23.64 on Thursday. (Provisional)

The S&P CNX Nifty gained 33.50 points or 0.66% to settle at 5,083.15. The index touched high and low of 5,084.45 and 4,994.80 respectively. 36 stocks advanced against 13 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure up 4.74%, Gail India up 4.10%, L&T up 3.37%, Sterlite Industries up 3.29% and IDFC up 2.74%.On the other hand, Cairn India down 1.62%, Maruti Suzuki down 1.50%, ONGC down 1.27%, Infosys down 1.19% and Bajaj Auto down 0.91% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.76%, Germany's DAX down 0.51% and Britain’s FTSE 100 down 0.65%.

After three days of continuous rally, sentiments turned bearish in the Asian region and all the Asian equity indices shut shop in the negative terrain on last trading day of the week as market participants remained influenced by the disappointing overnight cues from US markets after Federal Reserve Chairman Ben Bernanke dimmed hopes for more stimulus measures while Fitch downgraded Spain’s credit rating also dampened the traders’ sentiment. However, the downside in markets remained capped after reports showed that Chinese central bank unexpectedly slashed benchmark lending and deposit rates by 25 basis points in its bid to prop up flagging growth rate while giving banks additional flexibility to set competitive lending and deposit rates.

Meanwhile, Hong Kong and Shanghai shares fell 0.51% and 0.94% respectively on Friday despite China’s decision to cut interest rates for the first time in three-and-a-half years to kickstart economic growth. While, Japanese Nikkei dropped over two percent as lurking fears on the eurozone, disappointment with the U.S. Federal and caution on China’s economy weighed on sentiment. The drop was also triggered as investors booked profits after a major settlement of June options earlier in the session.