Post Session: Quick Review

Thursday’s session turned out to be extremely choppy session of trade at Dalal Street, whereby benchmark equity indices altering between green and red terrain, finally settled in the favour of latter with loss of around quarter of a percent, which took Sensex and Nifty below the psychological 25,650 and 7,650 levels respectively. Nevertheless, broader indices suffering brutal selling pressure, ended with bigger losses of over half a percent. In the extremely choppy session of trade, selling which came during late hours of trade mainly led to second consecutive down-session of performance, otherwise recovery which crept in the second half of trading session hinted of a positive session of trade. Somber global cues on account of rising tensions in Russia, sapping risk appetite mainly ate into bourses’ gains.

On the global front, Asian stocks were mostly slightly lower in Thursday morning trading, as markets watched for action of the central banks in the U.S., Japan and Europe and worries about the escalating conflict in Ukraine continued to weigh on shares. Meanwhile, European stocks slipped in early trade on Thursday, extending a week-long slide as tensions between the West and Russia continued to spook investors, who awaited the European Central Bank policy meeting. The ECB is set to hold fire on rates as it waits for earlier stimulus measures to gain traction, while keeping an eye on emerging risks from the conflict in Ukraine.

Closer home, markets failed to drew solace from FDI in Railways development, which though fired up railway stocks, but failed to excite benchmark equity indices at Dalal Street. Railway related stocks such as Texmaco, Kalindee Rail, Titagarh Wagons, Astra Microwave Products, and Bharat Electronics were locked in upper circuit after the Union Cabinet hiked FDI ceiling to 49% ensuring control in Indian hands, for boosting country’s defence sector which imports up to 70% of its military hardware. Sectorally, Information Technology, Technology and Infrastructure counters were the weak spells of trade, while that from Consumer Durables, Oil and Gas and PSU counters were the top gainers of the session. Depreciation of Rupee mainly worked for IT and Technology counters. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 1,320:1,616, while 116 scrips remained unchanged. (Provisional)

The BSE Sensex declined 76.26 points or 0.30% to settle at 25589.01. The index touched a high and a low of 25778.05 and 25526.05 respectively. 16 stocks gained against 14 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices too ended in the red, the BSE Midcap was down by 0.55%, while the BSE Small cap index was lower by 0.53%. (Provisional) 

On the BSE sectoral front, Consumer Durables up by 0.75%, Oil and Gas up by 0.46% and PSU up by 0.27% were the major gainers in the space, while IT down 1.27%, TECk down 1.14%, Infrastructure was down 0.55%, Realty down 0.34% and Power down by 0.31% were the top losers on the sectoral space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 1.08%, Maruti Suzuki up by 0.80%, ONGC up by 0.69%, BHEL up by 0.61% and SBI was up by 0.61%. On the flip side, Infosys down by 1.87%, TCS down by 1.45%, Hindalco down by 1.33%, SSLT down by 1.32% and Tata Motors down by 0.97% were the major losers. (Provisional)

Meanwhile, with an aim to enhance foreign investments in order to boost economic growth and create jobs, the government has approved the long-delayed proposal for raising the foreign direct investment limit (FDI) in the sensitive defence sector to 49% from 26% and opened up the railway infrastructure segment to foreign firms. The decision to hike FDI was taken in a cabinet meeting which was headed by Prime Minister Narendra Modi.

To expand the domestic industrial base in defensive sector, the cabinet hiked FDI ceiling to 49 percent ensuring control in Indian hands, for boosting country’s defence sector which imports up to 70 percent of its military hardware. Further, the cabinet also decided that FDI beyond 49% will be allowed in state-of-the art defence equipment manufacturing, with technology transfer under Indian control and management.

Further, in order to fast-track modernization of the state-run transporter, the cabinet allowed 100% foreign participation in crucial infrastructure segments of the Railways. Foreign investors can now invest in setting up of high-speed corridors, suburban rail networks, signaling projects, logistic hubs and in creating links to industrial parks. Currently, there is a complete restriction on any kind of FDI in the Railways sector except mass rapid transport systems. The move is likely to help in modernisation and expansion of the Railways which is facing a cash-crunch of around Rs 26,000 crore. However, FDI is not allowed in train operations and safety.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. It has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas among others. Recently, the government has enhanced FDI in insurance sector from 26 percent to 49 percent.

India VIX, a gauge for markets short term expectation of volatility declined 1.11% at 14.13 from its previous close of 14.29 on Wednesday. (Provisional)

The CNX Nifty ended lower by 20.35 points or 0.27% to settle at 7,651.70. The index touched high and low of 7,708.95 and 7,630.40 respectively. 28 stocks ended in the green against 22 stocks ending in red. (Provisional)

The major gainers of the Nifty were ACC up by 2.97%, Jindal Steel up by 2.82%, Tata Steel up by 1.11%, Kotak Bank up by 0.91% and BHEL was up by 0.89%. On the flip side, the key losers were PNB down by 2.62%, Infosys down by 2.12%, HCL Tech down by 1.82%, Bank of Baroda down by 1.64% and SSLT down by 1.56%. (Provisional)

European markets were trading in the red; Germany's DAX was down by 0.24%, France's CAC 40 was down by 0.08% and UK's FTSE 100 was down by 0.40%.

Asian equity indices ended mostly in red on Thursday, with the regional benchmark index heading for a three-week low, as tensions mounted over Ukraine. China’s stocks fell the most in six weeks, led by financial and energy companies, amid concern recent gains were excessive relative to growth prospects. China will release its July trade data tomorrow, with export growth forecast to have decelerated to 7% as imports expanded 2.6%, down from 5.5% in June, according to a survey. The statistics bureau will release inflation figures on August 9, followed by industrial production, fixed-asset investment and retail sales on August 13. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 2.61B, from 1.89B in the preceding month.

Malaysian property companies are grappling with higher costs in an industry already reeling from central bank curbs on lending last year and the first interest-rate increase in more than three years in July. Property transactions in 2013 sank the most since the aftermath of the 1997 Asian financial crisis, while home prices in the first quarter rose at the slowest pace since 2010.