Post session - Quick review

Local equity markets were pulverized on the first trading day of the new week as market men cashed out on riskier assets post witnessing 6% splendid rally in the last week. Local equity markets also took the beating as investor’s abandoned riskier asset’s post Japan intervened in the currency markets for the second time this year to stem the yen's rise. Monday's action, confirmed by Finance Minister Jun Azumi, came after the Japanese currency had surged to a post-World War II high of 75.32 yen against the dollar earlier. Japanese Finance Minister Jun Azumi said Japan intervened unilaterally in the foreign exchange market on Monday to counter speculative moves that did not reflect the health of the Japanese economy.  Meanwhile, some trader’s preferred to stay on the bay ahead of a European Central Bank meeting that may signal its intention to ease due to the region's deteriorating economic outlook.  However, for some strategists, a suddenly revitalized U.S. economy has diminished the prospect of further 'quantitative easing'.

On the home turf, comments of Finance Minister prompted further risk aversion as he said that immediate challenge before us today is how to sustain a high growth path, while keeping inflation in check. He further added that, ‘The international economic environment that we face today is not very encouraging and that RBI will continue to take the required fiscal and monetary measures to ease inflationary pressures, thereby sparking the fears that more rate hike may be in RBI’s offing.

On the global front, US markets made a mixed closing on Friday, the trade there remained volatile and despite some good economic reports Nasdaq could not manage a close of green. Meanwhile, Asian stocks too riding high on declining trajectory ended lower, with the MSCI Asia Pacific Index trimming its biggest monthly advance in two years, as companies from Acer Inc to Tohoku Electric Power Co reported losses. Additionally, much with the anticipation , the European shares too fell early on Monday, giving back a little of last week's strong gains, with miners hurt by falling metals prices after Japan intervened to stem the rise in its currency against the dollar.

Back on Dalal Street, although the gains of India’s no 2 Software exporter -Wipro- post the company reported its Q2 number - spilled optimism in early trade, however that soon was counterbalanced by the loss of top car maker Maruti Suzuki India’s Q2 numbers. Maruti Suzuki India in the previous weak posted higher than expected 60% fall in its fiscal second-quarter net profit which stood at Rs 240.44 crore as compared to Rs 598.24 crore for the quarter ended September 30, 2010. The company posted a higher-than-expected fall in its fiscal second-quarter net profit, hurt by a weak rupee and as it lost output of 28,539 cars due to labor unrest at one of its factories. Meanwhile, Wipro’s Q2 net beat forecast at Rs 1,301 crore, helped by a weaker rupee and rise in spending on outsourcing by overseas clients. Bangalore-based Wipro forecasted third-quarter revenue of $1.50 billion to $1.53 billion from its IT services unit, which accounts for three-quarters of its total revenue, a rise of 2% to 4.1% from the second quarter.

However, the biggies that reported more hits than misses mainly curbed the thrashing at Dalal Street. Stocks of FMCG Major- Hindustan Unilever rallied over 7% after the company’s Q2 net beat forecasts. The company net profit for the quarter registered growth of 21.69% at Rs 688.92 crore as compared to Rs 566.12 crore for the corresponding quarter of the previous year.  Meanwhile, shares of ICICI Bank succumbed to selling pressure despite reporting stellar Q2 numbers. India's No. 2 lender, ICICI Bank, beat street estimates on Monday with a 21.6% rise in second-quarter profit, led by higher income from interest and investments and lower provisions for bad loans. The bank’s net profit for the second quarter of the current fiscal stood at Rs 1503.19 crore as compared to Rs 1236.27 crore for the corresponding quarter of the last year. However, shares of Oriental Bank of Commerce were biggest disappointment as the bank’s net profit for the second quarter declined by 57.82% at Rs 167.74 crore as compared to Rs 397.65 crore for the quarter ended September 30, 2010, sending the scrip lower over 4%. 

Stocks from banking pivotal mainly hogged the limelight as slew of banks reported their earning. Corporation Bank rose over 2.50% as the bank’s profit for the second quarter of the current fiscal grew by 14.04% at Rs 401.11 crore as compared to Rs 351.73 crore for the corresponding quarter of the last year. Meanwhile, Canara Bank too surged over 1.50%.  The bank’s net profit for the second quarter of the current fiscal declined 15.44% at Rs 852.22 crore as compared to Rs 1007.88 crore for the corresponding quarter of the last year. While, Vijaya Bank registered gain of over splendid 9% after the bank’s net profit for the second quarter of the current fiscal jumped by 41.03% at Rs 203.53 crore as compared to Rs 144.31 crore for the corresponding quarter of the last year. Besides, gains in FMCG and Bankex counter, TECK pivotal on BSE was also up in green. However, stocks from Oil & Gas, Metal and Auto counters plummeting the most, contributed to the session’s losses.

30 share barometer index-Sensex- on BSE -plummeting close to a century of points closed sub 17,800 level. Similarly, the 50 share barometer index- Nifty-on NSE-declining over 25 points shut shop near 5,300 level. However, the broader indices showcasing a different trend were up over 0.25% each. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1457:1363 while 136 scrips remained unchanged.

The BSE Sensex lost 100.55 points or 0.56% and settled at 17,704.25. The index touched a high and a low of 17,813.11 and 17,688.27 respectively. 8 stocks advanced against 22 declining ones on the index (Provisional).

The BSE Mid-cap index gained 0.34% while Small-cap index was up 0.16%. (Provisional)

On the BSE Sectoral front, FMCG up 0.97%, Bankex up 0.69% and TECk up 0.02% were the top gainers while Oil & Gas down 2.09%, Metal down 2.02%, PSU down 0.76%, Capital Goods down 0.76% and Auto down 0.75% were the top losers.

The top gainers on the Sensex were HUL up 7.03%, HDFC Bank up 1.33%, Hero MotoCorp up 0.90%, NTPC up 0.39% and Infosys up 0.36%.

On the flip side, Sterlite down 4.18%, Hindalco down 4.01%, Tata Motors down 3.83%, BHEL down 2.89% and DLF down 2.70% were the only losers on the index. (Provisional)

Meanwhile, viewing that surging food prices, has been a cause of worry for the government and policy-makers, Prime Minister Manmohan Singh said that the immediate challenge before us today is how to sustain a high growth path, while keeping inflation in check. The international economic environment that we face today is not very encouraging and that RBI will continue to take the required fiscal and monetary measures to ease inflationary pressures.

Currently, growth in international economy is moderating, because of the slowdown in United States, Western European and Japanese economy. On the other hand, uncertainty in oil producing regions i.e. West Asia and North Africa has also increased the prices of oil and commodities in international markets.  In order to maintain growth, Manmohan gave stress on the consideration of all these factors while formulating the strategies for sustaining India’s growth processes.

On the high food inflation, the Prime Minister said, ‘high food price inflation has been a particular cause for worry in the recent months.’ Weekly food inflation measured by the Wholesale Price Index (WPI) surged to 11.43% for the week ended on October 15 compared to last week.

For controlling prices of food product, Prime Minister said, in the longer term the key to tackling rising food prices lies in increasing productivity and production in agriculture and allied sectors, by adding further he said government and the RBI will continue to take the required fiscal and monetary measures to ease inflationary pressures.

India VIX, a gauge for market’s short term expectation of volatility gained 8.47% at 22.66 from its previous close of 20.89 on Friday. (Provisional)

The S&P CNX Nifty lost 35.80 points or 0.67% to settle at 5,324.90. The index touched high and low of 5,360.25 and 5,314.60 respectively. 14 stocks advanced against 35 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainer on the Nifty were, HUL up 6.65%, PNB up 1.64%, Sesa Goa up  1.58%, HDFC Bank up 1.52%  and Hero MotoCorp up 1.29%.

 On the other hand, Hindalco down 4.29%, Tata Motors down 3.97%, Sterlite down 3.78%, SAIL down 3.40% and Ambuja Cement down 3.24% were the top losers. (Provisional)

The European markets are trading in red, with France's CAC 40 down 1.98%, Germany's DAX down 1.50% and FTSE 100 down 1.02%.

After exhibiting a cheerful trade in previous session, all the Asian equity indices barring KLSE Composite witnessed a choppy trade on Monday as investors shifted their focus from Europe’s debt woes to the US economy, waiting for the Federal Reserve’s monetary policy meeting and the key employment data that are scheduled to be announced later this week. Meanwhile, the Nikkei 225 index in Tokyo swung between positive and negative territory during the trade and ended the session with a cut of over half a percent after Japan intervened to weaken its currency, which had earlier hit a new post World War II high against the greenback. The strong yen has dented earnings of Japanese corporations such as Nintendo Co. and Toyota Motor Corp. and hurt the economy’s recovery from the March 11 earthquake and tsunami. Moreover, Chinese Shanghai Composite snapped a five-session winning streak by falling over 0.20 percent.