12th March, 2013 : CPI accelerates, Sensex, Nifty on reverse gear

iiflAfter taking a pause in the previous trading session, markets further weakened and lost grip on Tuesday as the benchmark indices witnessed selling. Market participants reacted sharply to rising Consumer Price data and entirely ignored better than estimated IIP figures.

The annual inflation CPI (Combined) for February 2013 on point to point basis (February 2013 over February 2012) is 10.91%. The corresponding inflation rates (provisional) for rural and urban areas are 11.01 % and 10.84% respectively. The Industrial Production data for the month of January 2013 stood at 181.8, which is 2.4% higher as compared to the level in the month of January 2012.

“While IIP data surprised positively with 2.4% growth in January, the CPI print of 10.91% for February disappointed. Both the datapoints dilute the market hope of a 50bps rate cut by RBI in the monetary policy early next week,” says Amar Ambani, Head of Research, IIFL.

Among the top laggards were the S&P BSE Telecom, Metal, PSU, Capital Goods, Bankex, Realty and Oil and Gas index.

Bucking the negative trend was the S&P BSE FMCG and Auto index both gained by 0.33% and 0.05% respectively.

Finally, BSE Sensex closed at 19565, down 81 points over the previous close. It had earlier touched a day’s high of 19697 and a day’s low of 19505. It opened at 19675.

The NSE Nifty closed at 5,914 down 28 points over the previous close. It earlier touched a day’s high of 5,952 and a day’s low of 5893. It opened at 5,944.

The S&P BSE Small – Cap index and S&P BSE Mid – Cap index ended lower by 1% each.

RIL, Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Jindal Steel, SBI, Gail India, ONGC, Dr Reddy’s Lab, ITC were among gainers in Sensex and Nifty.

Infosys, Wipro, TCS, Coal India, ICICI Bank, HDFC, Hero MotoCorp, Bharti Airtel, Bajaj Auto, HDFC Bank, Tata Power and Cipla were among losers in Sensex and Nifty.

The advance decline ratio was in favour of the bears. 1685 stocks declined against 1207 advancing stocks, while 129 stocks remained unchanged.

The INDIA VIX surged 6% at 15.13 It hit a day’s high of 15.67 and day’s low of 13.70.

Stocks which hit 52-week high during the week were Madras Cements, Satyam Comp, SANOFI, Rollatainers and Finolex Inds.

Stocks which hit 52-week low during the week were Mid India Inds, Punjab Comm, Rama Paper, Timex Group and Kaycee Inds.

Stock News

According to latest reports, an empowered group of ministers (EGoM) headed by P.Chidambaram, today deferred the plan over valuation concerns.

“MMTC issue has been deferred for now. EGoM did not accept recommendations of merchant bankers on valuation issues,” Disinvestment secretary Ravi Mathur was quoted by reports as saying. The issue which was initially planned to come out on March 14 will now be postponed.

Shares of MMTC surged by 7% to close at ~Rs318. It opened at Rs289 hit an intra-day high of Rs324 and an intra-day low of Rs280.

Core Education declined by 3.5% after the rating agency Moody slashed its rating for the company from “B1” TO “B2” with a negative outlook.

Most of the Asian markets ended in the red, the Chinese equity market reversed direction on Tuesday, after optimism over supportive policy measures from Beijing soured. The Shanghai Composite index in China ended lower by 1%.

Among the other major losers were, the Nikkei index in Japan ended lower by 0.3%, the Hang Seng index in Hong Kong declined by 09%, the Kospi index fell by 0.5% and Taiwan index declined by 0.55%.

The Straits index in Singapore was the only index which rose by 0.30%.

The European stock markets also traded with a negative bias on Tuesday, the CAC index in France edged lower by 0.2% and the DAX index in Germany slightly fell by 0.10% while the FTSE index in UK was almost flat.