ShareKhan Newsletter Blog

• IIP for October at 8.2% beats estimate
• Consumer price inflation at 9.9% in November
• HUL under pressure on hike in royalty
• Kingfisher hits upper circuit for second day

Indian indices
The Indian markets shut shop with mild losses for the fourth consecutive session. The BSE Sensex fell 0.16% while NSE Nifty dropped 0.18% in trade today. Markets remained lacklustre despite better-than-expected October IIP numbers. The Index of Industrial Production (IIP) grew at a robust 8.2% in October compared to a contraction in September. Indian markets rang the opening bell on a positive note but failed to maintain it till the end. The markets saw listless trading session as the markets kept swinging between gains and losses. The equities remained highly volatile throughout the day and closed the trading session in the red zone. As the IIP numbers for the month of October were announced, the BSE Sensex gained 70 points while NSE Nifty regained the 5,900 mark. But later on, announcement of rising consumer price inflation dashed hopes of a rate cut by the central bank which led the investors to book profits. The positive opening of the European markets was also ignored by the domestic market. At the end of the day, the BSE Midcap index was up by 0.06%, while the BSE Smallcap index was up by 0.24%.

Movement of the Indian indices for the day:

The Indian markets rang the opening bell in the positive zone but witnessed lacklustre session for the entire day. The key indices hit their intraday high in the morning session after release of strong IIP numbers for the month of October 2012 and then the intraday low levels in the afternoon session and closed today's trade on a positive note oscillating on both sides of the equator. The sectors like CG, PSU, Metal, Power, Bankex, FMCG and Realty added pressure while CD, Auto, Technology, Oil & Gas and HC led some support to the markets today. The major heavyweight losers were - HDFC, HUL, ICICI Bank, L&T, ONGC, BHEL and Tata Motors.

The other major news which caught limelight in today's trade was the non-banking financial sector, which jumped after the government reached an agreement with the opposition over a banking amendment bill seen benefiting the sector. 

The global rating agency S&P has warned that a downgrade is likely for India if its political climate worsens and pace of fiscal reforms slows down. For now they have retained India's sovereign ratings at BBB-minus.

The Sensex closed at 19,355.26, down by 31.88 points and the Nifty fell 10.80 points to close at 5,888.

Major Events for the day:

• The Index of Industrial Production (IIP) for October 2012 came in at 8.2% versus -0.7% (revised from -0.4%) seen in September 2012, which beats estimate.
  
• India's annual consumer price inflation (CPI) accelerated to 9.9% in November from the previous month, government data showed on Wednesday (December 12, 2012).

Following are the stocks/sectors which were in news today: 

• ABG Shipyard surged after the company signed a repeat order for construction of one additional cadet training ship with Indian Navy. At end of the day, the stock closed 1.18% higher
  
• Kingfisher Airlines hit 5% upper circuit for second day after company said it is currently in discussion with various investors, including Etihad Airways, for equity investments in the company.
  
• Mahindra & Mahindra rose on reports that the company will increase prices of its vehicles by over 1% across various models in January 2013 to offset rising input costs. At end of the day, the stock closed 2.20% higher.
  
• Tech Mahindra jumped on reports that more than 7% of total equity of the company has changed hands via bulk deals. At end of the day, the stock closed 3.69% higher.
  
• Hindustan Unilever declined on concerns that the company will face higher royalty payments to Unilever PLC. At end of the day, the stock closed 2.65% lower.