Benchmarks end lower for the fourth straight session

Indian equity benchmarks extended their southward journey for fourth consecutive session and ended the volatile day of trade slightly in the red. Domestic bourses kick-started the session on a strong note but were unable to hold the gains, as investors booked profit at higher levels. Though, some recovery was witnessed in dying hour of trade but proved too little to bring back markets into the green.

Earlier, markets made a gap-up start on the back of strong global set-up. Some support came with an Assocham CEO survey of which around 50 per cent of Indian CEOs said they are optimistic about the Indian economy, and expect it to be stronger in the next six months. Sentiments also got boost after World Bank’s report highlighted that India has replaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP). The World Bank's International Comparison Program (ICP) 2014 reported India's share in World GDP at 6.4% to $5.75 trillion in 2011 compared with China's at 14.9% and the US at 17.1%.

Appreciation in Indian rupee too supported the sentiments with rupee rising to its highest in more than a week on heavy dollar selling by exporters and corporates. The rupee rose to 60.30/31, a level last seen on April 21. However, markets took a U-turn and benchmarks entered into negative terrain due to heavy selling in realty, capital goods, metal and consumer durable counters.

Supportive cues from US and Asian markets too provided some support to local bourses and sentiments remained up-beat ahead of the Bank of Japan and the Federal Reserve report on monetary policy. However, disappointing cues from European market took their toll on domestic sentiments in late trade and dragged the frontline gauges below the psychological 6,700 (Nifty) and 22,450 (Sensex) levels. Investors mainly resorted to profit booking following the decline in European markets ahead of Federal Reserve decision on monetary policy.

Back home, sentiments also remained dampened due to both, domestic poll-related and global geo-political worries. Meanwhile, selling was witnessed in metal stocks on reports the Chinese Academy of Social Sciences (CASS), one of Beijing’s top government think tanks, has revised its 2014 GDP growth forecast down to 7.4%, below the official 7.5% target, and said that growth could slow to as low as 7%. Stocks related to telecom sector too tumbled during the trade, led by Bharti Airtel which fell over 2% fall despite reporting 89% year-on-year jump in consolidated net profit at Rs 962 crore for the fourth quarter ended March 31, 2014 (Q4), backed by strong growth in voice and data revenues. Additionally, shares of real estate companies succumbed to selling pressure, tumbling by up to 11% in late noon deals.

The NSE’s 50-share broadly followed index Nifty lost around forty points to end below the psychological 6,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around fifty points to end below the psychological 22,450 mark. Broader markets too were struggled to get any traction during the trade and ended the session in the red with a cut of over a percentage point. The market breadth remained in favour of decliners, as there were 973 shares on the gaining side against 1,794 shares on the losing side while 154 shares remain unchanged.

Finally, the BSE Sensex declined by 48.39 points or 0.22%, to 22417.80, while the CNX Nifty was down by 18.85 points or 0.28% to 6,696.40.

The BSE Sensex touched a high and a low of 22680.46 and 22284.96, respectively. The BSE Mid cap index was down by 1.12%, while the Small cap index lost 1.65%.

The top gainers on the Sensex were Hero MotoCorp up by 2.27%, ONGC up by 1.81%, Dr Reddys Lab up by 1.45%, Tata Motors up by 1.30% and HDFC up by 1.15%. While Tata Power down by 3.52%, BHEL down by 3.19%, SSLT down by 2.78%, Bharti Airtel down by 2.24% and L&T down by 1.96% were the top losers in the index.

On the BSE Sectoral front, Auto up by 0.37%, FMCG up by 0.16% and Oil & Gas up by 0.03% were the only gainers, while Realty down by 5.30%, Power down by 2.08%, Capital Goods down by 2.03%, Consumer Durables down by 2.00% and Metal down by 1.15% were the top losers in the space.

Meanwhile, according to a World Bank report, India has replaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP). The World Bank's International Comparison Program (ICP) 2014 ranked India at third place behind the US and China and reported India's share in World GDP at 6.4% to $5.75 trillion in 2011 compared with China's at 14.9% and the US at 17.1%.The ranking was based on PPP in dollar terms, under which economies and incomes of people compared by adjusting exchange to correct the differences in prices in different countries to make a meaningful comparison.

India was placed ahead of Japan because its currency was valued at 15.11 a dollar on a PPP basis in 2011, while the East Asian nation's currency was pegged at 107.45 to a dollar. The last World Bank survey took place in 2005 and placed India at 10th place.

The report further added that the spread of per capita actual individual consumption as a percentage of the US has reduced, indicating that the world has become more equal. It further highlighted that economies must be valued at a common price level and expressed in a common currency. Presently, countries estimate their GDP at national price levels and in national currencies which are not comparable. The report will help World Bank to compare poverty levels across countries as National poverty assessments differ because the purchasing power of national currencies differs from one economy to another.

The CNX Nifty touched a high and low of 6,780.15 and 6,656.80 respectively.

The top gainers of the Nifty were Hero MotoCorp up by 3.27%, Tata Motors up by 1.94%, ONGC up by 1.94%, Asian Paints up by 1.57% and Dr. Reddy's Laboratories up by 1.44%. On the other hand, DLF down by 9.30%, Tata Power Company down by 3.40%, BHEL down by 2.95%, SSLT down by 2.62% and Bharti Airtel down by 2.09% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.34% and Germany's DAX was down by 0.02% while, United Kingdom's FTSE 100 was up by 0.15%.

The Asian markets concluded Wednesday’s trade mostly in green. The Bank of Japan held fire on expanding its stimulus program despite tepid industrial production data and a recent sales tax rise that have fanned fears over the strength of the country’s recovery. Bank of Japan policymakers lowered their expectations for the economy with fiscal year growth slated to come in at 1.1%, down from an earlier 1.4% forecast. The bank's semi-annual report, which gauges the median of BOJ members’ views, also expects core inflation for the year to March to be 1.3% matching an earlier forecast. Japan’s Average Cash Earnings rose to a seasonally adjusted 0.7%, from -0.1% in the preceding quarter whose figure was revised down from 0% while Japanese Housing Starts fell to a seasonally adjusted -2.9%, from 1.0% in the preceding quarter.

Indonesia’s proposed 2015 budget assumes economic growth of 5.5% to 6.3%, versus a 6% target this year. In the budget proposal to be sent to parliament, the government will set a year-end inflation rate target for 2015 at 3.5 to 5.5%. The inflation forecast is higher than Bank Indonesia’s target of around 3 to 4% next year. Singapore Unemployment Rate rose to 2.1%, from 1.8% in the preceding quarter. Thai Trade Balance fell to a seasonally adjusted 3.48B, from 3.90B in the preceding month.