As of now, the decline is expected to be shallow. The fall will be sharper if the Nifty closes below 6,030
The market gave up its morning gains and settled at the lows of the day on selling pressure in realty, consumer durables and FMCG stocks. As of now, the decline is expected to be shallow. The fall will be sharper if the Nifty closes below 6,030. The National Stock Exchange (NSE) recorded a volume of 67.13 crore shares and advance-decline ratio of 473:1240.
The market opened almost unchanged from its previous close, tracking its Asian peers, which were mixed in morning trade, ahead of a policy announcement from the Bank of Japan. The Indian market closed in the positive for the third day on Monday as investor sentiment was supported by firm third quarter corporate results declared so far.
The Nifty opened two points lower at 6,080 and the Sensex resumed trade at 20,102, unchanged from its previous close. While select buying pushed the indices higher, profit taking amid volatility led the market lower in the opening trade itself.
Buying in metal, banking, power and realty stocks soon lifted the market into the green. The gains enabled the benchmarks hit their intraday highs in mid-morning trade. The Nifty touched 6,101 at its high, for the first time since 6 January 2011 and the Sensex climbed to 20,157.
However, profit booking at the highs led the market lower in subsequent trade, with the benchmarks slipping into the negative in the noon session. The market touched its intraday low on selling pressure in consumer durables, realty and technology sectors.
The market dropped further in the last hour of trade on across-the-board selling pressure. A lower opening of the European markets as European finance ministers have proposed a financial transaction tax. British Prime Minister David Cameron has voiced concerns saying that the tax would impact business transactions in the region’s biggest financial centre.
The benchmarks dropped to their lows towards the end of the trading session with the Nifty falling to 6,041 and the Sensex slipped below the 20,000-mark to 19,953.
The market settled near its lows, snapping the three-day winning streak. The Nifty closed 34 points (0.56%) down at 6,049 and the Sensex dropped 120 points (0.60%) to 19,982.
Among the broader indices, the BSE Mid-cap index dropped 0.91% and the BSE Small-cap index declined 0.81%.
All sectoral indices settled in the red. The top losers were BSE Realty (down 1.98%); BSE Consumer Durables (down 1.93%); BSE Fast Moving Consumer Goods (down 1.30%); PSU (down 0.91%) and BSE Capital Goods (down 0.86%).
Nine of the 30 stocks on the Sensex closed in the positive. The chief gainers were Sun Pharmaceutical Industries (up 1.55%); NTPC (up 1.45%); Jindal Steel & Power (up 0.53%); Mahindra & Mahindra (up 0.41%) and Bajaj Auto (down 0.37%). The key losers were GAIL India (down 4.47%); Hindustan Unilever (down 2.88%); Hindalco Industries (down 2.44%); Tata Motors (down 1.46%) and State Bank of India (down 1.34%).
The top two A Group gainers on the BSE were—Pantaloon Retail (up 9.69%) and Berger Paints (up 3.24%).
The top two A Group losers on the BSE were—HDIL (down 7.03%) and Dish TV India (down 4.96%).
The top two B Group gainers on the BSE were—JMT Auto (up 19.95%) and Nagreeka Exports (up 19.90%).
The top two B Group losers on the BSE were—Chartered Logistics (down 18.83%) and Prime Securities (down 17.895).
Markets in Asia settled mostly lower as the Bank of Japan delayed the planned 13 trillion yen a month ($145 billion) in extra securities buying on hold until January 2014. The central bank also announced a 2% inflation target, to be achieved “at the earliest possible time”.
The Shanghai Composite declined 0.56%; the Jakarta Composite dropped 0.53%; the KLSE Composite fell 0.43%; the Nikkei 225 fell 0.35% and the Straits Times shed 0.05%. Among the gainers, the Hang Seng rose 0.29%; the Seoul Composite advanced 0.49% and the Taiwan Weighted gained 0.44%.
At the time of writing, the key European indices were down between 0.01% and 0.47% and the US stock futures were mixed with a negative bias.
Back home, foreign institutional investors were net buyers of shares totalling Rs842.95 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs890.17 crore.
Out of the 50 stocks listed on the Nifty, 15 stocks settled in the positive. The major gainers were Asian Paints (up 2.96%); ACC (up 2%); NTPC (up 1.73%); Kotak Mahindra Bank (up 1.57%) and Sun Pharma (up 1.53%). The main losers were Hindustan Unilever (down 6.45%); GAIL (down 4.82%); HCL Technologies (down 2.71%); Cairn India (down 2.38%) and Hindalco Industries (down 2.32%).
Engineering major Larsen & Toubro (L&T) today said it has bagged a Rs447 crore contract from the defence ministry to supply 18 high speed interceptor boats for the Indian Coast Guard. The company had earlier bagged a contract worth Rs 977 crore for 36 similar vessels for the Coast Guard. L&T declined 0.98% to close at Rs1,552 on the NSE.
Pharma major Dr Reddy’s Laboratories today said state-run Life Insurance Corporation of India (LIC) has cut its stake in the company to 6.31% by selling shares worth Rs875.29 crore in the open market. LIC held 8.38% stake in the pharma major before offloading about 35.25 lakh shares, accounting for around 2.07% shareholding. Dr Reddy’s closed down 0.54% to Rs1,912.50 on the NSE.
During the December quarter, Hindustan Unilever’s net sales rose to Rs6,433.69 crore from Rs5,844.31 crore a year ago period
The company had posted a net profit of Rs753.81 crore during the same period of the previous fiscal.
Net sales of the company rose to Rs6,433.69 crore for the third quarter ended December 2012, as against Rs5,844.31 crore during the same period of 2011-12 fiscal, HUL said in a statement.
In a separate statement, the company said it has inked an agreement with Unilever Plc for the provisions of technology, trademark licences and other services to HUL.
Shares of HUL today closed at Rs481.55 on the BSE, down 2.88% from their previous close.
Credit Suisse sees a rosy future ahead—lower inflation, rate cuts, higher growth and so on. But then, how can the brokerage not be highly bullish after a six-month run in the Sensex from 16,000 to 20,000?
Credit Suisse analysts have asked the following questions about India:
And have found themselves answering ‘yes’ to all of them.
According to Credit Suisse, the economy is yet to feel the full benefits of the rupee’s sizeable depreciation, while the drop in market interest rates (three-month money and commercial paper rates are down more than 100 basis points over the last 12 months), the prospect of further policy rate cuts and the likely confidence-boosting effects of the government’s reforms, should also boost economic and market activity. Its GDP growth estimates are 5.7% in 2012-13, 6.9% in 2013-14 and 7.5% in 2014-15.
There is a persistence of relatively high fuel and food price rises. However, Credit Suisse analysts point out that core inflation will drop below 4% by mid-2013, with the headline rate of inflation slipping to less than 6%. This in turn helps to explain the headline wholesale price inflation forecasts of 7.3% and 6% for 2012-13 and 2013-14 respectively.
Credit Suisse analysts are looking for a total of 125 bps of repo rate cuts this year, with 50 bps at the 29th January meeting, further 50 bps in April 2013 and a final 25 bps in July 2013.
On policy matters, the key questions raised by Credit Suisse are: First, can the finance minister convince the market that his much-promised goal of limiting the central government budget deficit to 5.3% of GDP in 2012-13 is achievable (most are expecting an outturn in the order of 6%)? Second, can he set out a programme of measures to credibly achieve reductions in the deficit GDP/ratio in the coming fiscal year and over the medium term?
The government clearly faces an uphill task but the minister’s record suggests “we shouldn’t dismiss the possibility out of hand” as many have done.
Finally, Credit Suisse analysts, bring up the question: Will we see rating agencies downgrade India to sub-investment grade this year? The chances of two of the three main rating agencies moving India to junk status by end-2013 is small—in the order of 15-20%, perhaps. Fitch appears to be close to pulling the trigger but will presumably wait until the budget announcement before deciding whether to do so.