Post Session: Quick Review

Local equity markets succumbing to selling pressure, nursed heavy losses of around of 1.50% On Thursday, which dragged both Sensex and Nifty below the psychologically crucial 26,350 and 7,800 levels respectively. Much of the selling pressure was witnessed by bourses in the late hours of trade as market-participants incrementally squared off their positions tailing global sell-off. In the selling pressure which was broad-based, broader indices participated more ferociously and ended with nastier cuts of around two percent. Bit of gains witnessed in early deals on account of hopes of a good show by the BJP in state polls and weakness in global crude oil prices were completely washed away by concerns of wider trade deficit data. On the macro-front, India’s trade deficit, exerting pressure on country’s external sector as well as domestic currency widened to more than double at $14.25 billion in month of September as compared to $6.12 billion in the same month previous year as exports grew marginally and imports continued to expand at higher pace.

On the global front, Asian shares were lower on Thursday after Wall Street tumbled as disappointing US economic data fuelled growth concerns. Data from the US showed retail sales and producer prices both fell in September, dimming expectations of an interest rate hike by the central bank. However, European shares reversed an early rebound and slipped again on Thursday morning, resuming their month-long sell-off as worries over the strength of the global economy and fears of deflation in the euro zone kept investors on edge.

Closer home, in the sea of red, not a single counter on BSE managed to show resilience, nevertheless stocks from Consumer Durables, Power and Metal counters were the worst performers of the session. Nevertheless, Realty counter, which staged some recovery in first half of trading session on the back of recovery of DLF’s shares, too slipped back to negative territory. Shares in country’s biggest property developer DLF surged nearly 10% on Thursday after starting the session by slumping to a record low as investors were attracted by cheaper valuations following a recent slump. In other stock specific activity, shares of state-owned oil marketing companies such as HPCL, BPCL and Indian Oil Corporation which rose on hopes that under recoveries on sale of diesel and cooking fuels such as LPG and kerosene would be lower after global crude oil prices eased to 4-year lows, too ended mixed. Meanwhile, tyre stocks, which were in demand during the session tailing lower rubber prices, too succumbed to selling pressure by close of trade.

On the earnings front, Federal Bank’s result disappointed as the bank just reported 6% rise in net profit for quarter ended September 30, 2014 at Rs 240 crore on the back of higher provisioning of Rs 169 crore which was 50% higher than the corresponding quarter of the previous fiscal. The market breadth on the BSE remained in the favour of decliners; where advancing and declining stocks were in a ratio of 750:2175, while 92 scrips remained unchanged. (Provisional)

The BSE Sensex ended lower at 25967.08, down by 382.25 points or 1.45% after trading in a range of 25933.98 and 26462.08. There were 3 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.50%, while Small cap index down by 2.77%. (Provisional)

The losing sectoral indices on the BSE were Consumer Durables down by 4.07%, Power down by 2.92%, Metal down by 2.55%, Infrastructure down by 2.23% and Capital Goods down by 2.21%, while there were no gainers on the BSE sectoral index (Provisional)

The few gainers on the Sensex were ITC up by 1.38%, Coal India up by 1.12% and GAIL India up by 0.74%. On the flip side, Hindalco down by 5.95%, Mahindra & Mahindra down by 4.56%, Sesa Sterlite down by 4.07%, Tata Steel down by 4.00% and Tata Power down by 3.46% were the top losers. (Provisional)

Meanwhile, indirect tax collections grew by 5.8 percent to Rs 2.42 lakh crore during April-September period of current fiscal as compared to Rs 2.29 lakh crore during the same period of previous financial year. Indirect taxes include customs duty, central excise duty and service tax. The growth at 5.8 percent is far lower than 25 percent annual increase envisaged in Budget 2014-15 and is mainly impacted by decline in excise duty collections, indicating slump in manufacturing activity.

Central excise tax collection declined by 0.6 percent y-o-y to Rs 75,021 crore during the first six months of current fiscal. However, customs collections rose 5.5 percent to over Rs. 89,324 crore during April-September FY15 period against Rs 84,643 crore in the same period a year ago. Service tax collections grew by 13.1 percent to Rs 77,466 crore during the reported period. Over the past few months, services tax collections have been showing firm growth trend as the government had introduced the concept of negative list of taxation to widen the service tax base.

During September, indirect tax collections grew by 12.3 percent to Rs 48,012 crore. Excise duty collections in September contracted by 0.4 per cent to Rs. 14,288 crore, whereas custom duty collections grew by 32.8 percent to Rs 18,116 crore during the month. Service tax collections in September rose by 5.8 per cent to Rs. 15,608 crore against Rs 14,755 crore in the same month of last fiscal.

Tax collection is the major source of revenue for the government. The Budget aims to mobilise Rs 6.23 lakh crore in 2014-15, which requires a growth rate of 25 per cent over 2013-14. The government has estimated to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the current fiscal.

India VIX, a gauge for markets short term expectation of volatility zoomed 12.60% at 16.43 from its previous close of 14.59 on Tuesday. (Provisional)

The CNX Nifty ended lower at 7748.20, down by 115.80 points or 1.47% after trading in a range of 7729.65 and 7893.90. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were DLF up by 5.15%, NMDC up by 2.37%, ITC up by 1.57%, BPCL up by 1.52% and Coal India up by 1.28%. On the flip side, Ultratech Cement down by 6.06%, Hindalco down by 5.70%, Grasim Industries down by 4.86%, Mahindra & Mahindra down by 4.31% and Sesa Sterlite down by 4.17% were the top losers. (Provisional)

European Markets were trading mostly in red; UK’s FTSE 100 was up down 1.81%, France’s CAC was down by 2.80% and Germany’s DAX was down by 1.98%.

Asian markets ended in red on Thursday, with the regional benchmark index heading for its lowest since March, extending a rout in global equities after the yen gained the most against the dollar in six months. China’s broadest measure of new credit rose to a three-month high in September as the central bank’s targeted measures to boost liquidity helped spur lending. New local-currency loans were 857.2 billion yuan, and M2 money supply grew 12.9 percent from a year earlier. Foreign reserves were $3.89 trillion at September 30. Separately, China is lowering down payment requirements and discounting mortgages as declining housing sales put a drag on the economy. After four years of government restrictions to cool housing prices that had tripled since 2000, the central bank is reversing course, making it easier for homeowners to buy second properties.

Industrial production in Japan fell more-than-expected last month. The industrial production fell to a seasonally adjusted -1.9%, from -1.5% in the preceding month. Singaporean Retail Sales fell to a seasonally adjusted 5.4%, from 5.5% in the preceding month.  South Korean Interest Rate Decision fell to a seasonally adjusted annual rate of 2.00%, from 2.25% in the preceding quarter.