Post Session: Quick Review

Local equity markets extended previous session’s losses and ended down with sharp cut of over 1.20% on Tuesday, which dragged both Sensex and Nifty below the psychologically crucial 27,000 and 8,000 levels respectively. Absence of any positive triggers at home front combined with global anxiety as investors braced for a possible hawkish shift in the U.S. Federal Reserve's policy stance in its two-day policy meeting, which begins later in the day, mainly took a toll on buying activity. Though, markets started on subdued note, the selling pressure which accentuated during the second half of trading session, i.e. post the start of European markets, mainly pushed markets near day’s low point. Meanwhile, broader indices diving deeper into the gut, nursed heavier losses of around three percent by close of trade.

Sentiment at Dalal Street also took a hit to some extent after RBI’s governor, underscored that there were no chances of RBI slashing rates at the month-end monetary policy announcement, citing that Inflation in Asia's third-largest economy, India, was still high and hence there was no point in slashing interest rates since this would further build on to inflationary pressures. Besides, data which showed that foreign funds sold cash shares worth Rs 74.6 crore in the previous session, also added to negative milieu.

On the global front, Asian and European markets were in shambles as investors were reluctant to do much as they waited for fresh guidance on interest rates from the Federal Reserve amidst speculation that the Fed could raise interests sooner and faster than previously expected. Besides, US central bank policymakers will also release fresh economic and interest-rate projections, extending their forecast horizon through 2017.

Closer home, amidst the sea of red, none of the sectoral indices on BSE managed to stage resilience, rather the top losers from the session were the stocks from Realty, Power and Public Sector undertaking (PSU) counters. Additionally, PSU oil marketing companies also took a hit after reports suggested that India would decide on ending government control on diesel pricing after elections in two states next month even though local prices of the fuel were higher than the global rates, making a case for a cut in retail prices. Besides, Capital Goods stocks also failed to draw any solace from the reports which suggested of the government approving an Rs 930 crore scheme to enhance the competitiveness of the capital goods sector in order to boost the economy. Moreover, telecom stocks were in limelight after Department of Telecom (DoT) has filed a petition in the Supreme Court (SC) against telecom tribunal’s verdict that allowed Airtel, Idea and Vodafone to offer 3G services under a roaming arrangement in areas where not all of them own 3G spectrum. The market breadth on the BSE remained in the favour of decliners; advancing and declining stocks were in a ratio of 801:2229, while 88 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower by 324.05 points or 1.21% at 26492.51 after trading in a range of 26464.03 and 26861.29. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 3.42%, while Small cap index down by 3.99%. (Provisional)

The losing sectoral indices on the BSE were Realty down by 3.42%, Power down by 3.26%, PSU down by 3.12%, Infrastructure down by 3.05%, Capital Goods down by 2.70%, while there were no gainers on the index. (Provisional)

The top gainers on the Sensex were Dr. Reddys Lab up by 1.15%, Mahindra & Mahindra up by 0.61%, ITC up by 0.38%, Sun Pharma Industries up by 0.32% and Hindustan Unilever up by 0.30%. On the flip side, Tata Power down by 5.40%, Tata Steel down by 3.66%, Axis Bank down by 3.47%, ONGC down by 3.09% and Larsen & Toubro down by 3.05% were the top losers. (Provisional)

Meanwhile, Department of Telecom (DoT) has filed a petition in the Supreme Court (SC) against telecom tribunal’s verdict that allowed Airtel, Idea and Vodafone to offer 3G services under a roaming arrangement in areas where not all of them own 3G spectrum. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had reversed DoT's ban on telecom operators providing 3G services beyond their licensed zones through roaming pacts, citing it was in national interest in allowing better utilizations of scare radio frequency.

The judgment was a welcome development for three operators, namely Airtel, Vodafone and Idea Cellular who faced a penalty of Rs 1,200 crore for entering into pacts with each other to offer 3G services in regions where these operators did not win spectrum in the 2010 auction. However, following the judgment, Airtel, Vodafone and Idea extended service under their 3G ICR at pan-India level except Odisha. Presently, DoT has sent petition to Supreme Court registry around a week ago for appeal against the judgment dated April 29 on 3G intra-circle roaming.

This development doesn’t come as much of surprise as reports earlier too suggested that DOT was mulling to take this case to SC and was just about waiting for the new government to take control after the general elections.

India VIX, a gauge for markets short term expectation of volatility rose 0.20% at 13.28 from its previous close of 13.18 on Monday. (Provisional)

The CNX Nifty edged lower by 109.10 points or 1.36% at 7932.90 after trading in a range of 7925.15 and 8044.90. There were 8 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 0.88%, United Spirits up by 0.44%, ITC up by 0.41%, Sun Pharma Industries up by 0.37% and Infosys up by 0.27%. On the flip side, Tata Power down by 6.12%, BPCL down by 4.88%, Lupin down by 3.88%, PNB down by 3.56% and Tata Steel down by 3.46% were the top losers. (Provisional)

European Markets were trading mostly in the red; France’s CAC was down by 0.39%, Germany’s DAX was down by 0.29% and UK’s FTSE 100 was up by 0.40%.

Asian markets ended mostly in red on Tuesday ahead of the start of a Federal Reserve policy meeting. The Malaysian market was closed today on account of ‘Malaysia Day’ holiday. China’s stocks tumbled, sending the benchmark index to the biggest drop since March after foreign direct investment sank to a four-year low and investors speculated new share sales will divert funds. China may join other emerging countries in boosting gold reserves as the precious metal makes up a smaller share of its foreign-exchange holdings compared with developed economies. Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid antitrust probes into multinational companies that have spurred a letter of complaint from the US. Inbound investment was $7.2 billion in August, down 14 percent from a year earlier. It was the first back-to-back decline of more than 10 percent since 2009. Singaporean Retail Sales rose to a seasonally adjusted 5.5%, from 0.4% in the preceding month.