Markets consolidate after scaling record high in previous session

Markets witnessed consolidation after hitting record high in the previous session, which led to Sensex, concluding below the psychologically crucial 27,300 levels while Nifty managed to end tad above its crucial 8,150 mark, with little loss of around quarter a percent. ‘Choppiness’ mainly turned out to be theme of the session as barometer gauges dipped several times below their psychologically crucial 27,200 (Sensex) and 8,150 (Nifty) levels only to recover later, nevertheless it was buying in the last hour of trade that downsized bourses’ losses.

Weakness in Indian rupee against dollar dampened the sentiments. The currency was trading at Rs 60.54 at the time of equity markets closing as compared to its previous close of Rs 60.29. Moreover, markets failed to draw any sense of relief from reports that Finance Ministry pitched to Moody’s for ratings upgrade on the back of improving macro-economic fundamentals. Finance Ministry informed Moody's that the Budget 2014-15 has provided an impetus to growth and the government is taking steps to keep the fiscal deficit under check. However, losses remained capped as some support came with leading international risk-rating firm Maplecroft saying that India is now the world’s best growth-market bet as the risks of doing business in the country have declined with the Narendra Modi government having completed its first quarter. Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 1162.98 crore on September 8, 2014, as per provisional data from the stock exchanges.

Global cues too remained sluggish with European markets were trading in the red in early deals, with weaker commodity prices impacted by a stronger U.S. dollar expected to hurt mining and energy stocks. Asian stock markets ended mixed on Tuesday as profit-taking and a sharply higher dollar exerted both positive and negative impacts on the region

Back home, selling in realty stocks mainly played the spoil sport. Moreover, retail stocks such as Koutons Retail, Future Retail and Shoppers’ Shop edged lower as Commerce and Industry Minister Nirmala Sitharaman reiterated that the Government will not allow foreign direct investment in multi-brand retail.

On the flip side, Metal and Power counters edged higher ahead of the Supreme Court's decision on coal block allocations later today. Earlier on September 1, the Centre had requested the Supreme Court not to cancel the permits for 46 coal blocks that were functioning or were about to start production. Additionally, shares of tyre companies edged higher as lower raw material costs on account of weak natural rubber and declining crude oil prices would boost margins going forward.

The NSE’s 50-share broadly followed index Nifty declined by over twenty points but managed to end tad above the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over fifty points to finish below the psychological 27,300 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1669 shares on the gaining side against 1336 shares on the losing side while 95 shares remain unchanged.

Finally, the BSE Sensex declined by 54.53 points or 0.20%, to 27265.32, while the CNX Nifty lost 20.95 points or 0.26% to 8,152.95.

The BSE Sensex touched a high and a low of 27328.27 and 27177.09, respectively. The BSE Mid cap index was up by 0.51%, while the Small cap index was gained 0.31%.

The top gainers on the Sensex were Cipla up by 2.09%, Coal India up by 1.66%, Tata Motors up by 1.32%, ITC up by 1.16% and GAIL India up by 0.93%. On the flip side, Bajaj Auto down by 1.53%, Hero MotoCorp down by 1.51%, ONGC down by 1.31%, ICICI Bank down by 1.31% and Infosys down by 1.15% were the top losers in the index.

On the BSE Sectoral front Consumer Durables up by 1.75%, FMCG up by 0.86%, Power up by 0.59%, Infrastructure up by 0.48% and Healthcare up by 0.43% were the top gainers, while Realty down by 1.11%, IT down by 0.82%, Oil & Gas down by 0.49%, TECK down by 0.45% and Capital Goods down by 0.43% were the top losers in the space.

Meanwhile, In order to bring in more clarity in the existing laws and give more protection to the Indian industry, Commerce & Industry Minister Nirmala Sitharaman has stated that the government will come out with a policy on intellectual property rights (IPR) in next six months and set up a think tank on IPR to strengthen the country's patent regime and encourage innovation. Till now, there is no IPR policy in the country and the developed nations such as the US and European countries raised concerns on certain provisions of the Indian Patent Act leading to the rejection of patents filed by multinational pharmaceutical companies.

Commerce Minister has asserted that the IPR policy will help in dealing with issues being raised by developed nations and protect interest of India on IPR related matters. The policy will also help modernise intellectual property administration and offices, commercialisation of IP, collaboration between different departments including science and technology, encourage innovation and enhance domestic filing of patents.

Regarding the set up of think tank on IPR, Nirmala Sitharaman stressed that a think tank on IPR will be formulated soon, which will enable the Commerce Ministry to handle the IPR issues more firmly. The think tank will have about 15-20 members on the IPR including professors, end-users and legal experts who will constantly keep the ministry informed about developments on international IPR issues and concerns.

The CNX Nifty touched a high and low of 8,174.55 and 8,126.50 respectively.

The top gainers of the Nifty were Cipla up by 2.53%, Coal India up by 1.89%, IndusInd Bank up by 1.63%, ITC up by 1.50% and Tata Motors up by 1.41%. On the other hand, Tech Mahindra down by 1.84%, Asian Paints down by 1.63%, HCL Technologies down by 1.52%, DLF down by 1.47% and Bajaj Auto down by 1.47% were the top losers.

European markets were trading in red, France's CAC 40 was down by 0.13%, Germany’s DAX was down by 0.06% and United Kingdom's FTSE 100 was down by 0.14%.

Asian markets ended mostly in green on Tuesday, following gains on Wall Street despite poor Japanese growth data. Hong Kong market was closed on account of the day following the Chinese Mid-Autumn Festival holiday. Bank of Japan board members at the August meeting said the focus for policymakers should be the underlying trend in prices as they assess whether sustained 2% inflation is possible by 2015, the minutes showed. Members expressed the recognition that, even though monthly figures for the CPI tended to draw attention in terms of the BoJ’s conduct of monetary policy, it was important to accurately gauge the underlying trend in prices.

China’s trade surplus surged to a record $49.8 billion in August, as imports surprisingly fell for a second straight month while export growth slowed. Imports fell 2.4% year-on-year to $158.6 billion while exports increased 9.4% to $208.5 billion. Japanese Household Confidence rose to a seasonally adjusted annual rate of 41.2. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 4.11B, from 2.61B in the preceding month.