Post Session: Quick Review

After a big rally, the Indian markets seemed consolidating on Thursday and the benchmarks traded in a tight range throughout the day. Though, Sensex and Nifty comfortably maintained their crucial levels of 21200 and 6300 respectively but traders’ larger participation was missing, lacking any firm supportive cues. Infact in the second half the trade turned a bit choppy with benchmarks moving in and out of the green before finally closing mildly in red.

The start of the markets was good tailing the overnight gains in the US markets followed by positive trading in the regional peers that kept the market momentum going from last session’s rally. Positive start of the European markets gave some fillip to the sluggish trade in the domestic markets.But the traders took a pause analyzing the good economic data from the US that could lead to further reduction in the asset purchase by the Federal Reserve.

Back home, there was some sign of recovery during mid of the trade on reports that government officials have indicated that the fiscal deficit will be below 4.8 per cent of GDP and it may come down to 4.65%. Finance Minister P Chidambaram too had said that he is confident of Indian economy growing “step-by-step” and getting back to the high growth path in the next three years as global economy recovers. Some strength was also felt after rating agency Moody's said that India's sovereign downgrade is not on the cards. Sectorally, metal index was in limelight, gaining around two percent, on the other hand the Telecom sector stocks remained under pressure since the start of the trade after foreign brokerage house Credit Suisse downgraded Idea Cellular and Bharti Airtel citing reasons that Reliance-Jio joining 2G spectrum auctions may intensify competition in the industry. Sugar stocks too remained unimpressed despite an informal group of ministers (GoM), headed by Agriculture Minister Sharad Pawar, approving incentives to the industry for exports of up to 40 lakh tonnes of raw sugar for two years.

It was heavy earnings day and some good earnings announcements from the heavyweights restricted any major fall in the markets. In the very morning IT major HCL Tech came up with a better than expected numbers, the company reported 79.08% rise in its Q3 net profit at Rs 1297.87 crore as compared to Rs 724.72 crore for the same quarter in the previous year. Later, LIC Housing Finance reported 38.24% rise in its net profit at Rs 326.58 crore for third quarter ended December 31, 2013. Also Axis Bank reported 20% growth in its NII year on year. Bajaj Auto too posted a net profit after tax of Rs 904.55 crore for the quarter ended December 31, 2013 as compared to Rs 818.74 crore in same quarter last year.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1189: 1498, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex lost 45.28 points or 0.21% to settle at 21244.21. The index touched a high and a low of 21379.29 and 21199.65 respectively. Among the 30-share Sensex, 15 stocks gained, while 15 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.13% and 0.28% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 1.74%, IT up by 0.58%, Realty up by 0.29%, PSU up by 0.26% and Capital Goods up by 0.05% were the top gainers, while Auto down by 0.88%, FMCG down by 0.66%, Healthcare down by 0.50%, Bankex down by 0.44% and Consumer Durables down by 0.26% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Coal India up by 2.32%, Hindalco Industries up by 2.21%, Tata Steel up by 1.63%, Wipro up by 1.59% and BHEL up by 1.47%, while, Bharti Airtel down by 4.99%, Tata Motors down by 1.92%, Cipla down by 1.39%, Sun Pharma down by 1.37% and HDFC Bank down by 1.36% were the top losers in the index. (Provisional)

Meanwhile, as per the World Bank’s Global Economic Prospects (GEP) report, Indian economy is likely to grow over 6 percent rate in 2014-15 and increase to 6.6 percent in FY2015-16 and 7.1 percent in FY2016-17 on the back of recovery in global demand and increasing domestic investments. The report noted that during the previous year, India, with large current account and fiscal deficits and weaker growth, was hit hard mainly due to withdrawal of foreign investments, resulting into steep fall in rupee value against the dollar. Back then, rupee had subsequently appreciated because of policy interventions to support foreign exchange markets, capital flows and equity markets and delayed QE tapering. However, World Bank cautioned that a sharp withdrawal of foreign capital in the future could increase risk of corporate debt distress, while recapitalization of public sector banks can put pressure on the Government’s fiscal positions.

Referring to the growth in South Asia, the report highlighted that weaker growth in India, several years of rising inflation and current account deficits have opened up a large negative output gap, which is projected to gradually close on account of the improving economy. The regional growth is expected to strengthen to 5.7 percent in 2014 and about 6.7 percent in 2016, however, growth in South Asia is estimated to remain weak at 4.6 percent in 2013. Further, the World Bank highlighted that the global economy is projected to strengthen this year, as growth will be picking up in developing countries and high-income economies, however, downside risks continue to threaten the global economic recovery. The report further added that the global economic indicators show improvement with the European countries looking out of recession.

Regarding the performance of advanced economies, the World Bank’s report noted that advanced economies are gaining momentum, which will also support the growth in developing countries in the coming future. However, the World Bank expressed the need for developing nations to adopt structural reforms that promote job creation, strengthen financial systems and shore up social safety nets.

India VIX, a gauge for markets short term expectation of marginally gained 0.77% at 15.54 from its previous close of 15.42 on Wednesday. (Provisional)

The CNX Nifty lost 4.70 points or 0.07% to settle at 6,316.20. The index touched high and low of 6,346.50 and 6,299.85 respectively. Out of the 50 stocks on the Nifty, 27 ended in the green, while 23 ended in the red.

The major gainers of the Nifty were HCL Tech up 4.63%, Coal India up by 2.52%, UltraTech Cement up by 2.45%, Hindalco up by 2.03% and Wipro up by 1.75%. The key losers were Bharti Airtel down by 4.96%, Tata Motors down by 2.05%, Sun Pharmaceuticals down by 1.49%, ONGC down by 1.48% and Ranbaxy down by 1.47%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.26%, Germany’s DAX was down 0.08% and UK’s FTSE 100 was down 0.04%.

The Asian markets concluded Thursday’s trade on a mixed note following a record-breaking close on Wall Street, as investors welcomed fresh positive US data and an upbeat Federal Reserve report on the economy. Indonesia’s bonds gained for a sixth day, the longest winning streak since October, on speculation local debt sales by the government will slow after it raised a record amount in a global offer. Japan’s Corporate Goods Price Index fell to a seasonally adjusted annual rate of 2.5%, from 2.7% in the preceding month while Japanese tertiary industry activity index rose to a seasonally adjusted 0.6%, from -0.9% in the preceding month whose figure was revised down from -0.7%.

Japanese core machinery orders jumped an unexpected 9.3% in November from the previous month, as demand picked up ahead of an upcoming sales tax hike. The rise in the volatile economic indicator, after adjustment for seasonal factors, was much larger than the 1.2% increase forecast. It comes after a 0.6% gain in October. Machinery orders are closely watched as a leading indicator of corporate capital investment.