Benchmarks snap five-day gaining streak; Nifty ends below 8,000 mark

Snapping five days winning streak, Indian equity benchmarks ended the Monday’s trade in red terrain with frontline gauges declining below their crucial 8,000 (Nifty) and 26,800 (Sensex) levels as investors remained on sidelines at the start of October F&O expiry week. Much of the selling crept into the market in the final hour of trade even as bourses flip-flopped between green and red territory in afternoon deals. Sentiments remained dampened on reports that foreign direct investment (FDI) in India’s services sector has declined by 9% to $1.08 billion during the April-August period of the ongoing fiscal as compared to $1.19 billion during the first five months of the previous fiscal. Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represents around 60% share of the country’s GDP.

Selling got intensified in last leg of trade European equity indices turned lower in morning trade after a closely-watched German economic report came in weaker than expected, putting the brakes on a relief rally over the results of a key health check on the region’s banks. Asian markets ended mixed as a stress test passed by most European banks added to signs of recovery in the region.

Back home, depreciation in Indian rupee dampened the sentiments. Rupee was trading at 60.34 per dollar at the time of equity markets closing compared with its previous close of 61.31. Sentiments also remained dampened on reports that foreign institutional investors (FIIs) were net sellers to the tune of Rs 12.38 crore on Thursday. Meanwhile, services oriented sector edged lower as foreign direct investment in the services sector dipped by 9 percent to $1.08 billion during the April-August period of FY15.

On the flip side, coal and power related stocks remained on buyers’ radar as the Coal Ministry is gearing up to prepare the modalities of the proposed e-auction of coal blocks that may take place in January next year. Moreover, select shares from oil and gas sector edged higher on reports that Oil Minister Dharmendra Pradhan plans to overhaul the exploration policy to attract investors, spur energy output and revive the economy. Moreover, banking stocks continued their northward march for sixth straight session on expectation of further policy reforms from the government. Additionally, shares of defence companies rallied after the government on Saturday cleared defence projects worth Rs 80,000 crore.

The NSE’s 50-share broadly followed index Nifty declined by over twenty points to end below the psychological 8,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around hundred points to end below its crucial 26,800 mark. Broader markets too struggled to get any traction during the trade and ended the session with a cut of around half a percent. The market breadth remained in favor of decliners, as there were 1,245 shares on the gaining side against 1,609 shares on the losing side while 114 shares remain unchanged.

Finally, the BSE Sensex declined by 98.15 points or 0.37%, to 26752.90, while the CNX Nifty lost 22.85 points or 0.29% to 7,991.70.

The BSE Sensex touched a high and a low of 26994.96 and 26726.84, respectively. The BSE Mid cap index was down by 0.84%, while the Small cap index was down by 0.19%.

The top gainers on the Sensex were BHEL up by 4.98%, Dr. Reddys Lab up by 1.67%, GAIL India up by 0.85%, Coal India up by 0.85% and Tata Power up by 0.62%. On the flip side, Hindustan Unilever down by 4.75%, Tata Motors down by 2.57%, ONGC down by 2.17%, Tata Steel down by 1.57% and Hindalco down by 1.31% were the top losers in the index.

On the BSE Sectoral front Consumer Durables up by 2.11%, Capital Goods up by 0.70%, Bankex up by 0.48%, Power up by 0.47% and Healthcare up by 0.06% were the top gainers, while Realty down by 3.79%, Oil & Gas down by 1.45%, FMCG down by 1.06%, Infrastructure down by 0.88% and Teck down by 0.79% were the top losers in the space.

Meanwhile, with the intent of restricting oil imports and protecting domestic farmers, the government is mulling over an issue of raising import duty on crude and refined edible oils, among other matters. In the wake of local prices of oil falling to historic lows due to cheaper imports from Malaysia and Indonesia, Industry body Solvent Extractors Association (SEA) has been demanding a duty hike in crude edible oils to 10% and on refined edible oils to 25%.

Further, in the meeting held between the Food Minister Ram Vilas Paswan and Finance Minister Arun Jaitley on Friday, besides the import duty issue, problems faced by sugar mills in availing loans sanctioned through the Sugar Development Fund (SDF) along with the issue of additional budget allocation for FCI were discussed. Paswan, primarily, briefed Finance Minister about the current impasse between the UP sugar mills and the state government over cane price policy. The food minister was in the favour of relaxing certain norms so that sugar mills could avail loans easily from SDF, while seeking additional budget allocation for state-run Food Corporation of India (FCI) for giving food subsidies this fiscal. A budget allocation of Rs 92,000 crore has been made against the requirement of Rs 1,47,700 crore for this fiscal.

The CNX Nifty touched a high and low of 8,064.40 and 7,985.65 respectively.

The top gainers of the Nifty were BHEL up by 5.12%, Kotak Mahindra Bank up by 2.01%, IndusInd Bank up by 1.86%, Bank of Baroda up by 1.66% and Ambuja Cements up by 1.59%. On the other hand, Jindal Steel & Power down by 8.41%, DLF down by 8.30%, Hindustan Unilever down by 5.69%, Cairn India down by 4.34% and Tata Motors down by 2.40% were the top losers.

European markets were trading in red, France’s CAC 40 was down by 0.62%, United Kingdom’s FTSE 100 was down by 0.42% and Germany’s DAX was down by 0.69%.

Asian markets ended mixed on Monday, with China’s stocks falling for a fifth day, posting the benchmark index’s longest losing streak this year. The People’s Bank of China monetary policy advisory committee stated that China’s economic growth will slow to 7.2% in the current quarter, down from the previous three months, as domestic demand weakens. The nation’s economy will probably expand 7.3% next year. This view contrasts with a prediction by a state research institute, which expects 7% growth in 2015 unless the central government imposes stronger-than-expected stimulus measures.  Indonesia’s deputy central bank governor stated that loan growth in the country may be lower than 15% this year and is seen between 15% and 17% next year. Loan growth is declining because of lower liquidity in Indonesia’s banking sector. Hong Kong Trade Balance fell to a seasonally adjusted -50.4B, from -31.5B in the preceding month. Japan’s corporate services price index (CSPI) remained unchanged at a seasonally adjusted annual rate of 3.5%, compared to the preceding month.