Post Session: Quick Review

Local equity markets, after consolidating in previous trading session, succumbed to heavy selling pressure on Tuesday and settled with cut of over 3/4 of a percent, which took Sensex and Nifty below the crucial 24,550 and 7,350 levels respectively. Street took to profit-booking after composition of Modi's cabinet was sensed as having potential for policy conflict between ministers wanting faster economic growth and the Reserve Bank of India, who is struggling to tame inflation. Also, the Street failed to draw any sense of comfort from comments of New Finance Minister, who committed himself to repairing public finances and restoring investor confidence as a new administration took charge on Tuesday promising better days for millions of discontented Indians. Meanwhile, broader indices were also battered down cruelly for yet another session, with both Mid-cap and Small-cap indices trading lower with cut in the range of 0.45%-0.75%.

On the global front, Asian stock markets edged lower on Tuesday as tensions flared between China and Vietnam over a territorial dispute, while hopes of easier monetary policy continued to boost European shares. In Asia, trade took a turn after Vietnamese state media reported that a Chinese fishing vessel rammed and sank a Vietnamese fishing boat in the South China Sea, where the countries have overlapping territorial claims.

Closer home, sentiment at Dalal Street also failed to draw any solace from narrower Current Account Deficit (CAD). India's current account deficit (CAD) sharply narrowed to 1.7% of GDP, or $ 32.4 billion, in FY'14 from 4.7% in FY'13, helped by a sharp moderation in imports, especially of gold.

Sectorally, while Information Technology, Health Care and Technology counters restricted the losses, PSU, Power and Oil & Gas counters only endorsed them further. IT stocks witnessed a smart rally on the back of rupee depreciation, which slipped below the psychological 59/$ level. In non-sectoral gauge activity, shares of non-banking financial companies (NBFCs) declined after the Reserve Bank of India tightened merger and acquisition rules for NBFCs. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1303:1645, while 107 scrips remained unchanged. (Provisional)

The BSE Sensex lost 167.37 points or 0.68% to settle at 24549.51. The index touched a high and a low of 24777.31 and 24422.33 respectively. Among the 30-share Sensex, 10 stocks gained, while 20 stocks declined. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.66% and Small cap index was down by 0.45%. (Provisional)

On the BSE Sectoral front, IT up by 0.29%, Health Care up by 0.25%, TECK up by 0.21% and  Metal up by 0.04% were the gainers while, PSU down by 2.41%, Power down by 2.14% , Oil & Gas down by 1.92%, Auto down by 1.31%  and Realty down by 0.90%, were the losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up 2.04%, L&T up by 1.38%, Infosys up by 1.27%, Hindalco Inds up by 0.99% and HDFC Bank up by 0.88%.  On the flip side, the key losers were Gail India down by 7.34%, BHEL down by 5.47%, Mahindra & Mahindra down by 2.87%, SBI down by 2.71% and Tata Power down by 2.71%. (Provisional)

Meanwhile, according to Petroleum Ministry, under-recoveries on sensitive petroleum products are likely to fall 20 percent from Rs 1,39,869 crore during FY14 to Rs 1,11,000 crore in FY15. The oil ministry highlighted that in the financial year 2015, the oil subsidy burden for new government will be the lowest since 2011-12. The loss on diesel, kerosene and cooking gas (LPG) is expected to be Rs 35,000 crore, Rs 29,000 crore and Rs 47,000 crore in FY15 mainly due to decline in the diesel subsidy and increase in prices owing to the diesel decontrol measures (Rs 9.06 a litre) since January 2013.  

The Petroleum Ministry further highlighted that the appreciation in rupee’s value has also helped bring the figure down. The Ministry’s calculations are based on the crude oil prices at $105-108 a barrel and the rupee at about 58/dollar. Presently, public sector companies Bharat Petroleum Corporation, Indian Oil Corporation and Hindustan Petroleum Corporation are incurring a daily loss of Rs 318 crore on the sale of diesel, kerosene and cooking gas.

An appreciation in rupee value against the dollar cut Rs 10,000 crore on the under-recovery front. Over the past couple of months, Indian rupee has appreciated and if the current trend continues coupled with new government's move to keep increasing the diesel prices monthly by 50 paise a litre, the under-recovery on high-speed diesel will be wiped out in six months. Overall under-recoveries will further decline if the new government implements the suggestions of the Kirit Parikh committee, which recommended a Rs 5/litre increase in diesel prices, Rs 250-a-cylinder rise in LPG prices and a Rs 4/litre rise in kerosene prices.

India VIX, a gauge for markets short term expectation lost 3.72% at 19.10 from its previous close of 19.84 on Monday. (Provisional)

The CNX Nifty lost 47.40 points or 0.64% to settle at 7,311.65. The index touched high and low of 7,372.95 and 7,274.75 respectively. Out of 50 stocks in Nifty, 20 stocks ended in the green and 30 in red.

The major gainers of the Nifty were Jindal Steel up by 5.79%, Tech Mahindra up by 2.58%, Tata Steel up by 2.21%, Infosys up by 1.30% and Lupin up by 1.19%.  On the flip side, the key losers were GAIL down by 7.59%, BHEL down by 5.27%, PNB down by 3.13%, Bank Baroda down by 3.02% and IDFC down by 2.89%. (Provisional)

The European markets were trading mostly in green while France’s CAC 40 was down by 0.05%, Germany’s DAX added 0.42% and UK’s FTSE 100 gain 0.55%.

The Asian markets concluded Tuesday’s trade mostly in red, after the regional equity index yesterday climbed to the highest level this year. Jakarta Stock Exchange was closed today on account of ‘Isra Mi'raj of the prophet Muhammad SAW’ holiday. New home sales in Shanghai remained below the 200,000-square-meter threshold for the seventh consecutive week in a local market still beset by sluggish momentum. Purchases of new homes in the seven days ended, excluding government-funded affordable housing, shed 1% to 149,000 square meters. The average cost of new homes rose 13 percent from the prior week to 29,205 yuan ($4,677) per square meter. Hong Kong Trade Balance fell to a seasonally adjusted -55.3B, from -50.4B in the preceding month. Japan’s CSPI rose to a seasonally adjusted annual rate of 3.4%, from 0.7% in the preceding month. South Korean Consumer Confidence fell to 105, from 108 in the preceding month.