Post Session: Quick Review

After taking a breather in previous trading session, Indian equity markets resumed their southbound journey and ended with modest losses of over two tenths of a percent, which dragged Sensex below its psychological 25,400 level, though Nifty settled above the crucial 7,550 crucial mark. However, the session turned out to be yielding for broader indices, which went home with solid gains of over half a percent. Caution ahead of expiry of June derivatives on Thursday and concerns around Iraq mainly sapped the risk appetite of market-participants on the penultimate session of F&O expiry, whereby benchmarks just kept steadily losing ground to end near day’s low level. Additionally, negative global set-up also pressurized the sentiment.

On the global front, with few catalysts to drive trade, Asian stock markets slipped on Wednesday following the previous day's gains as investors took the opportunity to cash in gains ahead of final data on U.S. first quarter growth. Additionally, European shares fell on Wednesday, mirroring losses in the United States and Asia, as fears that violence in Iraq could escalate further prompted investors to take refuge in safer asset classes.

Closer home, in the dismal session of trade, most of the sectoral indices on BSE settled in positive territory, with prominent gainers being the stocks from Realty, Consumer Durables, Healthcare counters. Meanwhile, Auto stocks also zoomed in trade after Finance Minister announced that lower excise duty for auto sector will be extended for more six months till December, 31. Additionally, Power stocks vaulted in trade on hopes of some reforms measures for the sector in the coming weeks. Meanwhile, investors lapped up shares of non-banking finance companies (NBFC), SKS Microfinance, Muthoot Finance, Manappuram Finance and Magma Fincorp after Reserve Bank of India permitted NBFCs to act as business correspondents (BCs) of banks. The central bank allowed these companies to offer limited services with the aim of spreading financial inclusion.

On the flip side, stocks from Oil & Gas, Capital Goods and Metal counters were the top losers of the session. Oil & Gas stocks were beaten down by investors on account of escalating tensions in Iraq, which threatened to push up brent crude price. These stocks edged lower ahead of outcome of oil minister Dharmendra’s meeting with cabinet amid speculation that country could raise gas prices from July 1. The previous government led by the Congress party could not raise prices from April 1 as planned following the Election Commission's request to defer the move until the national elections concluded in May.

Besides, Railway stocks ran out of steam on profit-booking after reports suggested of government partially rolling back steep railway fare hike announced last week after protests from allies, highlighting the political realities facing the new prime minister in his push to cut the country's massive subsidy bill. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1690: 1341, while 111 scrips remained unchanged. (Provisional)

The BSE Sensex lost 55.16 points or 0.22% to settle at 25,313.74. The index touched a high and a low of 25,427.80 and 25,274.39 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.52% and 0.35% respectively. (Provisional) 

On the BSE sectoral front, Realty up by 0.87%, Consumer Durables up by 0.87%, Healthcare up by 0.84%, Auto up by 0.76% and Power up by 0.38% were the gainers while, Oil and Gas down by 0.79%, Capital Goods down by 0.70%, Bankex down by 0.43%, FMCG down by 0.37% and Metal down by 0.09% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up 2.87%, Bajaj Auto up by 2.72%, GAIL up by 1.60%, M&M up by 1.48% and Hero MotoCorp up by 1.43%. On the flip side, the key losers were ICICI Bank down by 1.56%, ITC down by 1.53%, ONGC down by 1.48%, Bharti Airtel down by 1.44% and RIL down by 0.99%. (Provisional)

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD), in its latest World Investment Report, underscored that India’s macroeconomic uncertainties remain to be a major concern for investors even as the country witnessed a 17% increase in foreign direct investment (FDI) to $28 billion in 2013. The report unveiled that the country has slipped from the second most favored investment destination in 2005 to fourth position in 2014, though its FDI recipient ranking, remained unchanged, at 14.

The investment report UNCTAD pointed that high inflation and the other macroeconomic problems had casted doubts on the prospects for FDI, despite the government's ambitious goal to boost foreign investment. It emphasized that policy responses to macroeconomic problems would play an important role in determining FDI prospects in the short to medium run.

It blamed a series of policy flip-flops and tax notices, which many in the government refer to as 'tax terrorism' for denting India's image, dragging the country to fourth position. In its annual World Investment Report 2014 released Tuesday for transnational corporations (TNCs), UNCTAD underscored that China remained the top draw followed by the US and that Indonesia had overtaken India to emerge as the third most preferred destination for 2014-16.

The UNCTAD report also mentioned the government's retail liberalization efforts did not result in expected inflows as international supermarket chains, barring Tesco, stayed away from investing in the multi-brand retail segment due to policy uncertainty. It suggested that the government could adopt a different policy approach to leverage foreign investment for the development of the Indian industry and could look at franchising and other non-equity forms to get global players to start operating in India.

India VIX, a gauge for markets short term expectation declined 4.56% at 18.31 from its previous close of 19.18 on Tuesday. (Provisional)

The CNX Nifty declined 10.95 points or 0.14% to settle at 7,569.25. The index touched high and low of 7,589.25 and 7,557.05 respectively. Out of 50 stocks in Nifty, 24 stocks ended in the green and 26 in red. (Provisional)

The major gainers of the Nifty were Bajaj Auto up 2.78%, Maruti Suzuki up by 2.05%, Lupin up by 1.76%, HUL up by 1.63% and Hero MotoCorp up by 1.63%. On the flip side, the key losers were ITC down by 1.53%, IDFC down by 1.50%, ICICI Bank down by 1.47%, ONGC down by 1.41% and DLF down by 1.41%. (Provisional)

European markets were mostly trading in red; UK’s FTSE 100 down by 0.68%, Germany’s DAX down by 0.42% and France’s CAC 40 was down by 0.73%.

The Asian markets concluded Wednesday’s trade in red, as escalating violence in the Middle East sapped demand for riskier assets. Japan’s Prime Minister Shinzo Abe stated that the deflation that wiped out much of Japan’s growth the past 15 years and so stunted the economy that it slipped to number three behind China, has ended and will be thwarted by new government policies designed to encourage business expansion. The government plans corporate-tax cuts, trade liberalization, reduced barriers for agricultural land consolidation, special zones of lighter regulation and the study of casinos as a way of spurring record numbers of tourists. The steps are part of Abe’s strategy to restore Japan’s influence in a region where China is the dominant power. Japan’s corporate services price index (CSPI) rose to a seasonally adjusted annual rate of 3.6%, from 3.4% in the preceding month. South Korean Consumer Confidence rose to 107, from 105 in the preceding month.