Benchmarks end marginally lower on Friday

Friday’s trading session turned out to be a disappointing session of trade for the Indian equity markets, as market participants booked their entire initial gains amid disappointing macro data. Sentiments also remained cautious over escalating tensions in Ukraine and looming US April jobs data slated to be released later in the day. Earlier, domestic bourses made a positive start as sentiments remained jubilant on report that foreign institutional investors (FIIs) bought shares worth a net Rs 454.48 crore on April 30, 2014, as per provisional data from the stock exchanges. Afterwards markets started crawling southward and entered into red as sentiments turned somber after data released showed that manufacturing activity remained stagnant in April in world’s third biggest economy. The HSBC India Manufacturing Purchasing Managers’ Index (PMI), a measure of factory production, which is based on data from monthly survey of  purchasing executives in over 500 manufacturing companies, stood at 51.3 in April, unchanged from the level in March.

Sentiments also remained dampened after the output growth of eight core industries slowed down to 2.5% in the month of March from a year earlier, against 4.5% in February and 7% recorded in the same month of previous year on account of poor production of crude oil, natural gas and fertiliser sectors. Core industries’ cumulative growth slowed to 2.6% during FY14 from 6.5% in FY13. 

Weak opening in European counters weighed on sentiments. Also, Asian markets concluded Friday’s trade mostly in red, with investors trading cautiously ahead of the release of crucial US monthly non-farm payrolls data later in the day while rising anxiety over Ukraine crises too weighed down sentiments. U.S. non-farm payrolls, is expected to have probably advanced by 210,000 jobs in April, up from a gain of 192,000 in March. European counters too made a sluggish opening.

Back home, selling in auto space too dampened the sentiments, as Maruti Suzuki and M&M reported disappointing April sales numbers. Maruti Suzuki plunged over a percent on reporting 11.4% fall in total sales at 86,196 units in April 2014, against 97,302 units in the same month last year, while M&M reported its auto sales numbers which stood at 36,274 units during April, 2014. The Passenger Vehicles segment sold 18,148 units in April, 2014, as against 20,748 units during April 2013. Although, TVS Motors Company gained over 6% on reporting 15% rise in April sales, the gains were little to heave the entire pivotal higher. Additionally, stocks related to aviation counters too sulk during the trade despite jet fuel prices being slashed by 1% tracing a decline in international rates.

The NSE’s 50-share broadly followed index Nifty declined marginally to end below the psychological 6,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over ten points but managed to hold the psychological 22,400 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,423 shares on the gaining side against 1,306 shares on the losing side while 129 shares remained unchanged.

Finally, the BSE Sensex declined by 13.91 points or 0.06%, to 22403.89, while the CNX Nifty was down by 1.60 points or 0.02% to 6,694.80.

The BSE Sensex touched a high and a low of 22575.62 and 22386.95, respectively. The BSE Mid cap index was up by 0.46%, while the Small cap index rose by 0.57%.

The top gainers on the Sensex were Tata Powers up by 2.43%, Infosys up by 1.34%, Coal India up by 1.30%, Dr Reddy’s Lab up by 1.19% and HDFC up by 1.17%. While L&T down by 2.50%, SSLT down by 2.49%, Tata Steel down by 2.46%, Hindalco Inds down by 1.82% and Maruti Suzuki down by 1.69% were the top losers in the index.

On the BSE Sectoral front, IT up by 1.09%, Healthcare up by 0.93%, Teck up by 0.87%, Consumer Durables up by 0.54% and Realty up by 0.24% were the gainers, while Capital Goods down by 1.78%, Metal down by 1.41%, Auto down by 0.51%, Power down by 0.32% and FMCG down by 0.10% were the top losers in the space.

Meanwhile, according to Nielsen global survey, consumer confidence level in India jumped six points to 121 in the first quarter of the current year as against 115 in the previous quarter, the highest optimism level since the fourth quarter of 2012. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism respectively. India retains its position as the second most-optimistic country in the survey behind Indonesia with 124 points, while Philippines with 116 points stands at third place.

The Nielsen survey highlighted that 68 percent of the polled respondents in India are of the view that the economy is going through a recessionary phase and around 54 percent of respondents feels that the country will be out of this recessionary phase in the next 12 months. Despite the challenge of high inflation, consumers are hoping for a better fiscal year and optimistic that overall sentiment and investment will pick-up gradually. The survey indicated that there is a renewed focus on savings for the long term as the intention of online respondents investing spare cash in savings is up by six percentage points to 68 percent from last quarter. Around 32 percent of respondents want to invest in a retirement fund as comparison to 23 percent in Q4 of 2013. Further, about 36 percent intend to invest in the stock market and in mutual funds, up from 29 per cent in last quarter.

The survey further added that around 54 percent of online polled respondents are feels that this is a good time to buy things. 49 percent of polled respondents are looking to invest in new technology products and buy new clothes. Nearly 74 percent of the polled respondents in India are optimistic about job prospects over the next 12 months and the sentiment is up by 4 percentage points from the last quarter.

The latest round of survey was conducted during the period February 17-March 7, 2014. The Nielsen Global Survey, established in 2005, measure consumer confidence, major concerns and spending intentions among respondents.

The CNX Nifty touched a high and low of 6,737.65 and 6,6 89.50 respectively.

The top gainers of the Nifty were Tata Powers up by 2.50%, Lupin up by 2.22%, HCL Tech up by 1.94%, BPCL up by 1.84% and NMDC up by 1.80%. On the other hand, Jindal Steel down by 5.68%, SSLT down by 2.86%, Tata Steel down by 2.43%, L&T down by 2.41% and Maruti Suzuki down by 2.18% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.46% and Germany's DAX was down by 0.04% while, United Kingdom's FTSE 100 was up by 0.10%.

The Asian markets concluded Friday’s trade mostly in red, with investors treading cautiously ahead of the release of crucial US monthly non-farm payrolls data later in the day. Asian currencies strengthened this week, led by the won advance to a five-year high, as data signaled a continued recovery in the region’s economies and on bets US borrowing costs will remain low. A HSBC Markit purchasing manager’s index survey showed that Indonesian manufacturing activity expanded at the fastest pace in 11 months in April, bolstered by rising demand and better economic conditions. The index rose to 51.1 last month from 50.1 in March. Indonesia’s inflation slowed in April, supported by stable food prices that gave room for the central bank to keep borrowing costs steady. Inflation fell to a seasonally adjusted 7.25%, from 7.32% in the preceding month. Indonesian Trade Balance fell to a seasonally adjusted 0.67B, from 0.79B in the preceding month.

Japanese Household Spending rose to a seasonally adjusted 7.2%, from -2.5% in the preceding month. Japan’s Monetary Base fell to 48.5%, from 54.8% in the preceding month. The percentage of the total work force that is unemployed and actively seeking employment in Japan during the previous month remained unchanged at a seasonally adjusted 3.6%, from 3.6% in the preceding month. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of -1.3%, from -2.3% in the preceding month.