Benchmarks snap six-day winning streak on profit taking

Snapping their six-day winning streak, Indian equity benchmarks ended the sluggish day of trade with a cut of around half a percent as investors opted to book profits after markets hit fresh all-time highs in the previous session. Sentiments remained down-beat with Asian Development Bank (ADB) saying that a global failure to respond to climate changes could result in about 8.7 percent economic loss in India’s Gross Domestic Product (GDP) by 2100. Also, the Indirect tax mop up inched up merely by 3.9 percent in the April-July quarter of the current fiscal due to decline in custom duty and excise duty collections. The growth is far less than 25 percent annual increase envisaged in the Budget.

Selling got intensified in last leg of trade as European markets made a sluggish opening with CAC, DAX and FTSE were trading with a cut of around half a percent in early deals on Wednesday as investors were rattled after Carlsberg issued a profit warning, blaming deteriorating conditions in Russia. Meanwhile, investors in the European region were also cautious ahead of the U.S. Federal Reserve’s minutes of its July policy meeting which could give insight on the outlook for interest rates. However, Asian stocks ended higher after strong US housing data lifted Wall Street shares, helping nudge Treasury yields higher and keeping the dollar well bid against the euro and yen.

Back home, depreciation in Indian rupee too dampened the sentiments after the US dollar firmed up against other Asian currencies. The rupee was trading at Rs 60.73 at the time of equity markets closing as compared to the previous close of Rs 60.67. However, losses remained capped upto certain extent as foreign portfolio investors (FPIs) bought shares worth a net Rs 559.39 crore on Tuesday, as per provisional data from the stock exchanges.

Meanwhile, banking space witnessed heavy selling with Axis Bank, ICICI Bank and SBI edged lower after reports suggested that the Union finance ministry has unearthed a scam involving these banks. Further, as per the reports, the ministry ordered a forensic audit and referred the case involving Oriental Bank to the Central Bureau of Investigation (CBI). Additionally, Oil marketing companies' stocks, BPCL, HPCL and IOC, which were trading upbeat for previous two trading session, succumbed to selling pressure in today’s trading session after reports suggested delayed prospect of deregulation of the nation's most consumed fuel, losses on sale of diesel have risen to Rs 1.78 per litre after dipping to an all-time low of Rs 1.33 a litre in first half of August. On the flip side, shares of pharmaceutical companies remained on a roll with most of the frontline stocks were trading multi-year highs on the bourses. A strong operational performance during the recently concluded quarter and weaker rupee against the dollar has fuelled the rally in pharma stocks.

The NSE’s 50-share broadly followed index Nifty declined by over twenty points and ended below the psychological 7,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over hundred points to finish below the psychological 26,400 mark. However, broader markets traded with traction and ended the session with a gain of around half a percentage point. The market breadth remained in favour of advances, as there were 1692 shares on the gaining side against 1285 shares on the losing side while 110 shares remain unchanged.

Finally, the BSE Sensex declined by 106.38 points or 0.40%, to 26314.29, while the CNX Nifty lost 22.20 points or 0.28% to 7,875.30.

The BSE Sensex touched a high and a low of 26504.52 and 26277.61, respectively. The BSE Mid cap index was up by 0.06%, while the Small cap index gained 0.93%.

The top gainers on the Sensex were Sun Pharma up by 4.64%, Cipla up by 3.79%, Dr Reddy up by 2.25%, Tata Power up by 1.73% and BHEL up by 1.47%. While ONGC down by 2.62%, Tata Motors down by 1.37%, M&M down by 1.21%, HDFC down by 1.19% and ITC down by 1.12% were the top losers in the index.

On the BSE Sectoral front, Healthcare up by 2.93%, Power up by 0.73%, Realty up by 0.52%, IT up by 0.23% and Teck up by 0.10% were the top gainers, while Oil & Gas down by 1.32%, PSU down by 0.86%, FMCG down by 0.70%, Auto down by 0.56% and Capital Goods down by 0.51% were the top losers in the space.

Meanwhile, in order to ensure timely and adequate disclosures by the listed companies, the Securities and Exchange Board of India (SEBI) proposed a detailed set of norms for listed companies. According to the proposed norms, listed companies will have to disclose price sensitive information within a day along with the reasons for such developments. Any information that impacts company's assets and liabilities and financial condition and influence investor decisions could be considered as price sensitive.

The SEBI’s draft notified that listed companies would have to inform stock exchanges about all events which are material in nature, price sensitive and have bearing on overall business performance. The market regulator further stressed that in cases where the disclosures are made after one day, listed entity shall, along with such disclosure provide suitable explanation for delay in making disclosure. Besides, companies are required to make periodic disclosures on the associated material developments till such time the matter is resolved. As per the SEBI’s draft note, a listed company will have to explain and give reason for change in key managerial personnel, including resignation. The company is also required to disclose the appointment of a director.

SEBI has sought to define material transactions to make sure that price sensitive information is dispersed to stock exchanges on a timely basis. The move came after considering that laxity and liberal interpretations by firms has resulted in inadequate disclosure levels in the securities market.

The CNX Nifty touched a high and low of 7,922.70 and 7,864.05 respectively.

The top gainers of the Nifty were Sun Pharmaceuticals Industries up by 4.94%, Cipla up by 3.27%, Lupin up by 2.12%, Tata Power Company up by 2.00% and Kotak Mahindra Bank up by 1.97%. On the other hand, ONGC down by 2.80%, IDFC down by 1.77%, Tata Motors down by 1.50%, GAIL (India) down by 1.45% and Mahindra & Mahindra down by 1.35% were the top losers.

The European markets were trading in red, France's CAC 40 was down by 0.41%, Germany's DAX was down by 0.39% and United Kingdom's FTSE 100 was down by 0.37%.

Asian equity indices ended mostly in green on Wednesday, after strong US housing data lifted Wall Street shares. Japan’s exports rose in July for the first time in three months in a tentative sign that demand overseas is starting to recover, which could raise hopes that exports can offset a slump in consumer spending. The export data will be a relief for the Bank of Japan, which has predicated its economic growth and inflation forecasts on a rapid rise in exports as part of the government’s ‘Abenomics’ plan to energize the Japanese economy. The 3.9% annual rise in July was roughly in line with a 3.8% increase expected. Japan’s trade balance rose to a seasonally adjusted -1.02T, from -1.07T in the preceding month whose figure was revised up from -1.08T. Japan’s All Industries Activity Index fell to a seasonally adjusted -0.4%, from 0.6% in the preceding month. In Hong Kong, the composite interest rate slipped to 0.45% at the end of July from 0.47% at the end of June. The Monetary Authority stated that the drop reflected a moderate decrease in the weighted funding cost for deposits.