Post Session: Quick Review

Markets witnessed heavy sell-off for second consecutive session on Tuesday as market-participants made a bee-line to exit risk equities on the back of pessimistic global environment after crude oil skidded to fresh five-year lows. Sentiments dampened after current account deficit widened to $10.1 billion, or 2.1% of GDP, in July-September quarter of this fiscal, up from 1.2 % a year ago. Besides, domestic market also remained affected by concerns over slowing foreign capital inflows after reports suggested that strong US growth could prompt the US Federal reserve to speed up rate hike. U.S. employers added the largest number of workers in almost three years last month and wage gains accelerated, a sign of economic strength that could draw the Federal Reserve closer to raising rates.

By close of trade, both Sensex and Nifty after being constantly beaten down for the entire trading session, settled with nasty cuts of around a percent, which took these indexes below psychologically crucial 28,000 and 8,350 levels respectively. Meanwhile, broader indices equally participating into the rout, nursed heavy losses of around 1.50%-1.60%.

On the global front, Asian shares ended lower on Tuesday, following losses on Wall Street prompted by slumping oil prices and worries about global growth. Investor sentiment was also weighed on by a private survey that showed that business confidence continued to decline in November. Meanwhile, European stocks retreated for a second day as Tesco Plc tumbled, and falling oil prices dragged energy companies lower.

Closer home, all the sectoral indices on BSE succumbed to selling pressure, however, stocks from Oil & Gas, Metal and Capital Goods were notable losers. Metals pack, including Sesa Sterlite, Hindalco and Tata Steel, slipped 2-3.6 per cent on reports of weak trade data of China, the world's biggest consumer of industrial metals. However, losses were comparatively subdued for IT and Healthcare stocks. IT stocks, which fell the most in yesterday's trading session, saw some buying today, however yet again surrendered to selling pressure by close of trade. However, gains in Sunpharma-ranbaxy shares after Competition Commission of India (CCI) cleared the Sun pharma-Ranbaxy merger deal with a condition to divest 7 products to ensure that the deal does not harm competition, restricted losses of healthcare counter.

In stock-specific activity, shares in insurance service providers like Max India and Exide Industries gained between 2 to 3 per cent as the government approved the recommendations made by the parliamentary panel on insurance bill. Amendment to the insurance bill seeks to raise foreign direct investment in the sector to 49 per cent from 26 per cent currently. Additionally, aviation stocks too few higher in trade, with Jet Airways surging over 8 per cent to a 52-week high of Rs 438.75 as crude oil prices fell to fresh 5-year lows and Spicejet too recovering from previous sessions’ drubbing. The overall market breadth on BSE was in the favour of declines which outnumbered advances in the ratio of 2040:903; while 95 shares remained unchanged.

The BSE Sensex concluded at 27797.01, down by 322.39 points or 1.15% after trading in a range of 27763.82 and 28157.53. 4 stocks advanced against 26 stocks declining ones on the index.  (Provisional)

The broader indices were beaten blue in trade; with BSE Mid cap index ending lower by 1.57%, and Small cap index sliding by 1.59%. (Provisional)

While, there were no gainers on BSE, Power down by 2.75%, Metal down by 2.71%, Capital Goods down by 2.29%, INFRA down by 2.28%, PSU down by 2.25% were prominent losers on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddys Lab up by 1.53%, Sun Pharma Inds. up by 1.46%, Mahindra & Mahindra up by 1.21% and TCS up by 0.15%. On the flip side, Sesa Sterlite down by 5.24%, ONGC down by 4.29%, Bharti Airtel down by 4.24%, Tata Power down by 4.21% and NTPC down by 3.54% were the top losers. (Provisional)

Meanwhile, India's Current Account Deficit (CAD) for the second quarter of the current financial year widened to $10.1 billion against $5.2 billion on Y-o-Y basis, which translates into 2.1% of GDP against 1.2% in the same quarter the previous year. Despite the expansion, CAD is well within RBI's comfort zone of 2.5% of GDP.

The deficit is not only higher on Y-o-Y basis, but also higher on sequential basis. CAD in the first quarter of the current financial year had been $7.8 billion and widened in reported quarter mainly on account of deceleration in export growth and an increase in gold imports.

While export growth slid to 4.9% in Q2 of 2014-15 from 11.9% on Y-o-Y basis, imports rose by 8.1% in Q2 FY15 as against a decline of 4.8% in the same quarter of the previous year, largely due to a sharp rise in gold imports. Trade deficit in Q2 rose to $38.56 billion against $34.6 billion in the preceding quarter.

However, net services receipts improved by 3.4% in Q2 as telecom, computer and IT services showed improvement from their level a year ago, net outflow on account of primary income (profit, dividend and interest) to $ 6.9 billion in Q2 was higher than Q2FY14 ($ 6.3 billion) as well as the preceding quarter ($6.7 billion).

The balance of payment stood at a surplus of $6.9 billion during July-September, a fourth consecutive quarter of surplus, although that was narrower than the $11.2 billion surplus in the previous quarter. On a BoP basis, there was a net accretion of $6.9 billion to India's foreign exchange reserves in Q2FY15 as against a drawdown of $10.4 billion in Q2FY14.

The CNX Nifty settled at 8340.70, down by 97.55 points or 1.16% after trading in a range of 8330.50 and 8444.50. 6 stocks advanced against 44 stocks declining ones on the index. (Provisional)

The top gainers on Nifty were Sun Pharma Inds. up by 1.41%, Mahindra & Mahindra up by 1.35%, Dr. Reddys Lab up by 1.19%, TCS up by 0.08% and HCL Tech. up by 0.08%. On the flip side, Sesa Sterlite down by 5.16%, ONGC down by 4.40%, Bharti Airtel down by 4.22%, Tata Power down by 4.15% and NTPC down by 3.54% were the top losers. (Provisional)

European markets were reeling under pressure ; with Germany’s DAX declining by 90.99 points or 0.91% to 9,924.00;UK’s FTSE 100 sliding by 74.83 points or 1.12% to 6,597.32 and France’s CAC shedding by 50.94 points or 1.16% to 4,324.54.

The Asian equity benchmarks ended mostly lower on Tuesday, with Shanghai Composite Index slumping the most in more than five years amid extreme volatile trading that sent the mainland stock bourses’ turnover to a record. China’s policy change was the biggest drag on the market as there’s a liquidity crunch. China’s authorities announced that lower-rated bonds can no longer be used as collateral for some short-term loans, sparked sell-off in debt and the yuan. The move will help remove riskier debt from the repo market before China requires local government financing vehicles to clarify next month which bonds are backed by the state. Japan’s M2 Money Stock rose to a seasonally adjusted 3.6%, from 3.2% in the preceding month.

Indonesia’s central bank, which quickly raised the benchmark rate after the government hiked fuel prices last month, is expected to keep all rates unchanged at its last policy meeting for the year scheduled on Thursday. At a special meeting right after President Joko Widodo announced gasoline and diesel prices hikes, the central bank also raised the lending rate by 50 basis points to anchor inflation expectation and encourage interbank borrowing. The World Bank has cut its growth forecast on Indonesia’s economy for next year to 5.2% from 5.6% as projected in July, due to a weaker outlook of the country’s exports and investment growth. The projection by the Washington-based lender is lower than government estimates for next year’s growth, which is at 5.8%.