Wednesday, November 18, 2009

Indian Stock Markets BSE NSE Review 18 Nov 09

Markets traded under the custody of volatility on Wednesday, resulting in an end of a three-day winning streak for the benchmark indices. Global equities failed to offer any assistance and wide divergence in opinion regarding markets’ direction led to constant swings in the benchmarks. After a shaky start, market went on the front foot by mid-morning trades, but had to soon succumb to the pace of selling activity. Since then every attempt to recover was promptly attacked and finally it was volatility that won the game in the last half hour of trade. Unlike benchmark indices, broader indices handled the pressure quite well and managed to pocket respectable gains. Metal, fast moving consumer goods and software shares played a crucial role in capping major losses on the bourses, while the day’s restlessness can be mainly attributed to stocks from oil & gas, banking and capital goods space. Finally, the 30-share BSE Sensex dropped 51.87 points or 0.30% to end at 16,998.78, while the S&P CNX Nifty slipped 7.55 points or 0.15% to settle at 5054.70.

The market breadth was in favor of advances. 1598 shares ended in the green, 1166 shares ended in the red and 82 shares remained unchanged.

The Sensex touched a high and a low of 17,098.79 and 16,958.41, respectively. Tata Motors up 3.14%, Tata Steel up 1.68%, ITC up 1.61%, Infosys Technologies up 1.54% and Jaiprakash Associates up 1.06% were the main gainers on the Sensex.

Rel Infra down 3.2%, L&T down 1.72%, ICICI Bank down 1.47%, RIL down 1.47% and Grasim Inds down 1.17% were the main losers on the benchmark.

The BSE Midcap and Smallcap indices gained 0.29% and 0.80%, respectively.

Indian economy seems to be recovering gradually but consistently and the result is being witnessed in government’s tax revenue too. Government’s net direct tax collections during the first seven months of the present fiscal (April- October 2009) stood at Rs 1,73,447 crore compared with Rs 1,66,905 crore in the same period last fiscal, thus registering a growth of 3.92%.

Looking at the disaggregate level, growth in corporate taxes was 4.59% at Rs 1,09,996 crore against Rs 1,05,174 crore a year ago while personal income tax collection grew at 2.87% at Rs 63,195 crore as against Rs 61,433 crore a year ago. The government said in a release that lower growth in net collection was mainly on account of higher tax refund outgo of 63.95% at Rs 33,137 crore compared with Rs 20,212 crore last fiscal.

Among sectoral indices on the BSE, Metal up 1.2%, Fast Moving Consumer Goods (FMCG) up 0.73%, Information Technology (IT) up 0.7%, Realty up 0.67% and Consumer Durables (CD) up 0.61% were the main gainers.

Ispat Inds (up 4.21%) from Metal, ITC (up 1.61%) from FMCG, Infosys (up 1.54%) from IT, Sobha Developers (up 5.45%) from Realty and Blue Star (up 0.93%) from CD were the main gainers on the respective indices.

Oil & Gas down 0.84%, Bankex down 0.78%, Capital Goods (CG) down 0.66%, Public Sector Undertaking (PSU) down 0.2% and Power down 0.1% were the main losers in the sectoral space.

Confederation of Indian Industries has said that India’s economic growth was likely to exceed the 6% mark in the current fiscal in wake of pick up in demand across sectors. The industry body concluded after a summit in Mumbai that the economy was getting back on track and was sequentially improving.

Participants at the summit said that the projects which had been placed on the backburner after the financial crisis surfaced were slowly coming back on the table. It was observed that while the bank credit growth remained sluggish, there have been alternative sources of finance from the capital market and foreign borrowings.

The S&P CNX Nifty slipped 7.55 points or 0.15% to settle at 5054.70. The index touched a high and a low of 5079.30 and 5041.65, respectively.

IDFC up 3.98%, Tata Motors up 3.15%, Jindal Steel up 2.98%, Ranbaxy up 2.12% and ABB up 1.72% were the main gainers on the Nifty.

Rel Infra down 3.79%, Sun Pharma down 1.97%, ICICI Bank down 1.91%, L&T down 1.74% and RIL down 1.47% were the main losers on the Nifty.

The government has cleared 17 foreign direct investment (FDI) proposals involving a total investment of Rs1,158.78 crore. Among the major proposals which were approved are the FDI applications of the world's largest steelmaker ArcelorMittal and ductile iron pipe maker Electrosteel Castings, the government said in a statement.

The government has allowed ArcelorMittal to pick additional stakes in Uttam Galva with an FDI of Rs 503.37 crore. The Kolkata-based Electrosteel Castings has been allowed to issue eligible securities including equity shares or non-convertible debt instruments along with warrants on a private placement basis which would amount to an FDI worth Rs 600 crore.

European markets were trading higher. Britain’s FTSE 100 gained 0.30%, France’s CAC 40 rose 0.58% and Germany’s DAX added 0.50%.

Asian markets ended mixed as investors turned cautious following the recent advance in the region’s markets. Marketmen remained worried that recovery process of the global economy is still going to be painful and grinding. Also, there was a lack of conviction among many investors about the market’s direction.

Hang Seng declined 0.32% to 22,840.33, Nikkei 225 dropped 0.55% to 9,676.80 and Straits Times plunged 0.72% to 2,745.04.

On the other hand, Shanghai Composite added 0.62% to 3,303.23, Seoul Composite rose 1.13% to 1,603.97 and Taiwan Weighted surged 0.43% to 7,766.69.

Industrial production in the US rose less than expected in October, once again suggesting that recovery was unlikely to be a smooth upward curve and giving the Federal Reserve more reason to keep the interest rates at near zero level for an extended period to support the economy.

Total output at US factories, mines and utilities increased marginally by 0.1% in the month of October. The flat growth came after three months of strong performance in which the average gain was 0.9%. In August, production rose 1.2% while over the third quarter, the net gain was 5.2% compared with the same period of 2008.

There was not much substance in disaggregate data either which showed that manufacturing output witnessed a decline of 0.1% compared with the previous month while output from mines dropped 0.2%. The support came from utilities where production rose 1.6% on monthly basis.

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