Post Session: Quick Review

Final expiry session of July derivatives contracts turned out to be tormenting for local equity markets, which nursing heavy losses of over 3/4th of a percent, settled below the crucial 26,000 and 7,750 levels for Sensex and Nifty respectively. In the volatile session of trade, markets dilly-dallying in the first half session of trade, witnessed intense selling pressure in the late hours which dragged the benchmarks lower to day’s low point and into negative territory, with cut of over three fourth of a percent. However, session turned out to be yielding for broader indices, which went home with gains of around two tenths of a percent.

Globally, Asian pacific shares ended mostly in red, uninspired by an upbeat report on the U.S. economy, after the U.S. Federal Reserve said it would make further cuts to its monetary stimulus as expected. U.S. first-quarter GDP was initially reported to have increased by 0.1%, but was subsequently revised to show a contraction of 1.0%. The difference between the second and third estimate was the largest since records began in 1976. Additionally, doubts about the health of Europe's economy dominated trade on its major stock markets on Thursday after a cautious message from the U.S. Federal Reserve did little to stem the dollar's charge to 10-month highs.

Sectorally, most of the sectoral indices on BSE lost to red, with only exception being the stocks from Healthcare, Realty and Metal counters which ended the downbeat session of trade with gains. On the flip side, stocks from Power, Banking and Consumer Durable counters were the prominent losers among others. Losses of ICICI bank mainly dragged the banking pivotal lower. Shares of India's second-biggest lender by assets sunk over 1% despite the bank reporting better than expected Q1 net profit rise of 17%, helped by growth in credit demand and higher fee income. Besides, IT stocks fell after rival HCL Technologies slumped after April-June U.S. dollar revenue growth lagged some estimates. India's fourth largest software services firm HCL Technologies reported a 53.7% jump in its consolidated net profit to Rs 1,834 crore for the fourth quarter ended June 30, 2014. Additionally, Auto pivotal also ran out of steam even as Maruti Suzuki reported in-line with estimates Q1 numbers. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 1432:1483, while 124 scrips remained unchanged. (Provisional)

The BSE Sensex declined 192.45 points or 0.74% to settle at 25894.97. The index touched a high and a low of 26118.88 and 25853.69 respectively. 5 stocks gained against 25 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices, however, ended in the green, the BSE Midcap was up by 0.18%, while the BSE Small cap index was higher by 0.25%. (Provisional) 

On the BSE sectoral front, Realty up by 0.24%, Healthcare up by 0.17% and Metal up by 0.05% were the top gainers, while Power down by 1.35%, Bankex down by 1.18%, Consumer Durables down by 0.98%, Capital Goods down by 0.84% and Auto down by 0.62% were the major losers in the space. (Provisional)

The top gainers on the Sensex were Cipla up by 1.99%, Tata Steel up by 1.69%, Gail India up by 0.17%, Coal India up by 0.11% and Bajaj Auto was up by 0.01%. On the flip side, NTPC down by 2.98%, Axis Bank down by 2.39%, HDFC down by 2.00%, M&M down by 1.73% and Tata Power down by 1.61% were the major losers. (Provisional)

Meanwhile, as India has taken a tough stand at WTO, the top global trade bodies and experts have attributed this policy as a quite contrary to the promise made by the new government that it is open for business.  Last week, India has made it clear to the World Trade Organization (WTO) that it would not agree to the Trade Facilitation Agreement (TFA) unless there is a tangible and credible evidence of movement on arriving at a permanent solution on safeguards to run food security programmes of developing nations and a package for least developed countries (LDCs).

India's stance not only puts up a roadblock on global trade, but will effectively halt any efforts to envision a larger ambition for the US-India economic relationship, said Alyssa Ayres a senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relations. Disagreement with TFA shows that India is not against the west countries but against itself and the world, backing away from the terms of a deal it participated in designing as recently as December. The International Chamber of Commerce (ICC) has stated that failure to meet the July 31 deadline for TFA would mean missing an opportunity to inject much-needed growth into the global economy.

The developed countries including the US, Australia and European countries have heavily skewed in favour of trade facilitation instead of accepting the Bali package on food security programmes of developing nations. Earlier, at Bali Ministerial last December, India had agreed to the TFA, which binds members to improving border infrastructure for smoother movement of goods. The TFA is aimed at simplifying customs procedure, reducing transactions cost and increasing transparency and is being pushed by the developed countries as they seek to strengthen their sagging economies through an unrestrained global trade by way of a uniform and easy procedures at customs.

India VIX, a gauge for markets short term expectation of volatility declined 0.46% at 13.82 from its previous close of 13.88 on Wednesday. (Provisional)

The CNX Nifty ended lower by 70.10 points or 0.90% to settle at 7,721.30. The index touched high and low of 7,791.85 and 7,711.15 respectively. 7 stocks ended in the green against 43 stocks ending in red. (Provisional)

The major gainers of the Nifty were Cipla up by 2.12%, Tata Steel up by 1.57%, BPCL up by 1.25%, Lupin up by 0.55% and Bajaj Auto was up by 0.17%. On the flip side, the key losers were NTPC down by 3.24%, IDFC down by 2.56%, Asian Paints down by 2.47%, Axis Bank down by 2.44% and HCL Tech down by 2.41%. (Provisional)

European markets were trading in the red; Germany's DAX was down by 0.21%, France's CAC 40 was down by 0.98% and UK's FTSE 100 was down by 0.53%.

The Asian markets concluded Thursday’s trade mostly in red, with benchmark index paring its third straight monthly gain. Hong Kong stocks rose, with the city’s benchmark index capping its biggest monthly advance since September 2012, as property shares extended gains. Japanese Housing Starts rose to a seasonally adjusted -9.5%, from -15.0% in the preceding quarter while Japan’s Average Cash Earnings fell to a seasonally adjusted 0.4%, from 0.6% in the preceding quarter whose figure was revised down from 0.8%. Hong Kong Retail Sales fell to a seasonally adjusted annual rate of -6.9%, from -4.1% in the preceding month. Taiwanese GDP rose to 3.84%, from 3.14% in the preceding month. Singaporean Unemployment Rate remained unchanged at 2.0%, compared to the preceding quarter.

The Asian markets were trading mostly in red; KOSPI Index dropped by 6.49 points or 0.31% to 2,076.12, Jakarta Composite declined by 9.84 points or 0.19% to 5,088.80, FTSE Bursa Malaysia KLCI tumbled by 6.98 points or 0.37% to 1,871.36, Taiwan Weighted was down by 131.17 points or 1.39% to 9,315.85 and Nikkei 225 declined  by 25.46 points or 0.16% to 15,620.77.

On the flip side, Hang Seng gained 24.64 points or 0.10% to 24,756.85, Shanghai Composite was up by 20.32 points or 0.93% to 2,201.56 and Straits Times was up by 20.41 points or 0.61% to 3,374.06.