Benchmarks end marginally lower after hitting record highs

18 Nov 2014 Evaluate

Benchmark equity indices came off their fresh record highs to end marginally lower weighed down by profit taking in IT majors and realty counter. Bourses, after making a good start scaled fresh highs in early session of trade but, turned flattish in noon deals as investors opted to book some profit off the table at high point of day’s trade. However, losses remained capped on reports that foreign institutional investors remained net buyers in Indian equities worth Rs 656.37crore on November 17, as per provisional stock exchange data. Meanwhile, Finance Minister Arun Jaitley said that inflation has moderated and global fuel price has eased and hoped that Reserve Bank of India would prune interest rates as it will give a ‘good fillip’ to the Indian economy.

On the global front, European stocks were trading higher on Tuesday, adding to the previous session's rally sparked by comments from ECB President Mario Draghi that raised the prospects of further stimulus steps. Investors were also betting on Germany’s ZEW survey for November, due at 1000 GMT, to start showing some signs of a stabilisation and reverse 10 straight months of declines. Asian markets ended mostly in the green led by Japanese Nikkei, up by over two percent, boosted by deal activity worth $100 billion in the US and anticipation of European monetary stimulus.

Back home, sentiments remained dampened as rupee depreciated to its lowest level in a little over a month as private oil firms bought dollars while a broadly stronger dollar also hurt sentiment for the local unit. The partially convertible rupee was at 61.78 per dollar at the time of equity markets closing as compared with its close of 61.73/74 on Monday. Meanwhile, shares of jewellery companies edged lower on concerns that the Reserve Bank of India (RBI) may increase the restrictions on gold imports.

On the flip side, infrastructure shares remained on buyers’ radar after Arun Jaitley said that he is in discussion with the members of opposition parties to make necessary procedural changes in Land Acquisition Act in order to avoid delay in the implementation of the infrastructure projects. Metal shares gained considerably with Sesa Sterlite leading the pack with gains of around 4% as the company is set to take up the Rs 2,500-crore expansion at its copper smelter plant in Tuticorin. Telecom stocks too rallied across the board on reports Defence Ministry and Telecom Ministry will coordinate to resolve spectrum issue. Additionally, shares of sugar manufacturers remained in demand on media reports that the government is likely to subsidise the production of ethanol for blending with petrol.

The NSE’s 50-share broadly followed index Nifty lost around just five points to end above the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around fifteen points but managed to hold its crucial 28,150 mark. Broader markets, however, outperformed benchmarks and ended the session in the green with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1743 shares on the gaining side against 1,366 shares on the losing side while 97 shares remain unchanged.

Finally, the BSE Sensex declined by 14.59 points or 0.05%, to 28163.29, while the CNX Nifty lost 4.85 points or 0.06% 8,425.90.

The BSE Sensex touched a high and a low of 28282.85 and 28119.95, respectively. The BSE Mid cap index was up by 0.27%, while the Small cap index was up by 0.93%.

The top gainers on the Sensex were Sesa Sterlite up by 4.09%, BHEL up by 2.01%, Larsen & Toubro up by 1.79%, Bharti Airtel up by 1.57% and Tata Steel up by 1.42%. On the flip side, Sun Pharma down by 1.94%, HDFC down by 1.90%, Hindalco down by 1.61%, ONGC down by 1.49% and TCS down by 1.18% were the top losers in the index.

On the BSE Sectoral front Capital Goods up by 1.61%, INFRA up by 1.48%, Power up by 1.33%, Metal up by 0.99% and Auto up by 0.55% were the top gainers, while IT down by 0.75%, Realty down by 0.60%, Consumer Durables down by 0.54%, Oil & Gas down by 0.30% and FMCG down by 0.24% were the top losers in the space.

Meanwhile, putting its emphasis on renewable source of energy, the government is looking at a solar power generation target of 100,000 mw by 2022, up from the 20,000 mw goal planned by the previous government. Power, coal and renewable energy minister Piyush Goyal has said that 'what we inherited was 20 gw (giga watt) up to 2022, which we are trying to reset to 100 gw. On the solar front, we believe there is enormous potential to take it to 100,000 mw in next 5-7 years'. He further stated that the government of India stands committed to lead the revolution in the renewable energy sector.

The minister stated that renewable energy may seem expensive, but in the long run, it scores over conventional energy. The subsidy regime needs to be more robust, targeted and sustainable. He also said the government was trying to make these projects viable by providing grid parity to make them economically viable and ensuring that bankability and returns were reasonably assured.

The country wants to attract $100 billion - $115 billion of investment in clean energy over the next five years. But the government may find it difficult to achieve its solar target without subsidies as the country has added only 3 gigawatts. However, the minister has said that the government is trying to make it self-sustaining, in order to help it realise the revised target of 100,000 MW from renewable sources.

The CNX Nifty touched a high and low of 8,454.50 and 8,407.25 respectively.

The top gainers on Nifty were SSLT up by 3.49%, IDFC up by 2.95%, Larsen & Toubro up by 2.11%, BHEL up by 1.95% and HDFC Bank up by 1.63%. On the flip side, HDFC down by 2.18%, Kotak Mahindra Bank down by 2.09%, Hindalco Industries down by 2.02%, Sun Pharmaceuticals Industries down by 1.91% and ONGC down by 1.37% were the top losers.

European markets were trading in green, France’s CAC 40 was up by 0.87%, Germany’s DAX was up by 1.27% and United Kingdom’s FTSE 100 was up by 0.58%.

Asian markets ended mostly in green on Tuesday, with Japanese stock recovering from the biggest one-day rout this year as expectations for stimulus measures rose a day after the country reported that its economy slid into recession. Japanese Prime Minister Shinzo Abe is set to call early elections as part of a trio of measures in a gambit to secure his political future and fortify the three arrows of his economic policy after the nation sank into recession. Abe plans to postpone an unpopular sales tax increase, scheduled for October 2015, for 18 months. Indonesia’s central bank convened an extraordinary meeting, fueling speculation it will raise interest rates after the president hiked fuel prices to tackle the country’s budget and current account deficits. In his first major economic policy decision, President Joko Widodo yesterday night raised subsidized gasoline and diesel prices by more than 30% to help fund his reform agenda. The central bank has pushed for significant cuts in fuel subsidies, which have made it focus monetary policy on the big current account deficit instead of raising economic growth, which has fallen to 5.01%, its slowest pace in five years. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to the preceding month.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2456.37	-17.64	-0.71
Hang Seng	23529.17	-267.91	-1.13
Jakarta Composite	5102.47	48.53	0.96
KLSE Composite	1818.38	11.90	0.66
Nikkei 225	17344.06	370.26	2.18
Straits Times	3313.73	25.06	0.76
KOSPI Composite	1967.01	23.38	1.20
Taiwan Weighted	8859.07	-25.32	-0.28

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Benchmarks end marginally lower after hitting record highs

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