Post Session: Quick Review

Final session of December month F&O contract expiry turned out to be extremely daunting for local equity markets, which cracking over 1 %, concluded below psychologically crucial 27,500 (Sensex) and 8,200 (Nifty) levels respectively. Fall of index heavyweights such as HDFC Twins, ONGC, TCS and Infosys mainly perturbed markets. Nevertheless, broader indices also succumbing to selling pressure, concluded flat with negative bias. For the series, both Sensex and Nifty tanked over 3%. On the broader front, while BSE Smallcap index tanked over 2.50%, CNX Midcap edged lower by 0.20%.

Participants mainly preferred staying on the sideline in the holiday truncated Christmas week on growing concerns of incremental foreign outflows by end of the year, while, Cabinet’s approval to an executive order to implement coal and insurance reforms did little to lift markets from doldrums. The move came after a month-long parliament session that ended on Tuesday failed to vote on a bill to raise the cap on foreign investment in insurance companies to 49 percent from 26 percent, and another piece of legislation to overhaul the troubled coal sector.

On the global front, Asian shares concluded mostly higher on Wednesday, taking the lead from Wall Street where shares closed at a record level overnight after data showed the US economy grew at its fastest pace in 11 years in the third quarter. Meanwhile, European shares were mixed on Wednesday, failing to gain traction from a rally in the U.S. where the Dow Jones Industrial Average closed above 18,000 points for the first time ever. Trading volumes are set to be light in Europe on Wednesday with markets open for just a half day due to the festive holidays.

Closer home, all sectoral indices on BSE ended into negative territory; however, stocks from Realty counter were the only exceptions. On the flip side, maximum drubbing was witnessed by stocks from PSU, Information Technology (IT) and Oil & Gas counters. In stock specific activity, shares of ICICI Bank, Aditya Birla Nuvo, Max India, Reliance Capital, State Bank of India and Bajaj Finserv rallied as Cabinet reportedly approves ordinance on insurance reforms. Besides, Shares of UltraTech Cement, ACC, and Ambuja Cements firmed up on reports that these companies have hiked cement rates by Rs 10-25/bag. The overall market breadth on BSE was in the favour of declines, which thumped advances in the ratio of 1132:929, while 16 shares remained unchanged.

The BSE Sensex ended at 27208.61, down by 297.85 points or 1.08% after trading in a range of 27146.52 and 27571.25. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in the in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.02%. (Provisional)

The only gaining sectoral indices on the BSE were Realty up by 1.14% while, IT down by 1.38%, Oil & Gas down by 1.36%, PSU down by 1.15%, TECK down by 1.07% and FMCG down by 1.02% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sesa Sterlite up by 0.86%, Tata Steel up by 0.48%, Tata Power up by 0.37%, ICICI Bank up by 0.35% and Axis Bank up by 0.21%. On the flip side, GAIL India down by 3.27%, ONGC down by 2.29%, Dr. Reddys Lab down by 2.07%, Coal India down by 2.06% and Infosys down by 1.88% were the top losers. (Provisional)

Meanwhile, with an aim to enhance foreign investments and boost domestic manufacturing, the Government is likely to consider a proposal for liberalizing foreign direct investment (FDI) policy soon for the cash-starved medical devices sector. The proposal to relax the FDI policy has been mooted by the Commerce and Industry Ministry.

As the medical devices sector falls under the pharmaceutical category, it is accordingly subjected to FDI limits and other conditions such as mandatory government nods. FDI in medical devices sector is permitted through government-approval route, however the industry has been demanding that FDI should be put under the automatic route. India badly needs foreign investments in medical devices and equipment sector. 

Industry is of the view that the domestic companies are not competitive as global firms and not big like drug firms and thus there is no threat of mergers and acquisitions from multi-national firms.

Medical devices include wide range of products such as implants sutures and surgical instruments. The present market size of the industry stands at around $7 billion. As per estimates, India imports about 70 percent of its requirement of medical devices. The industry size is about $7 billion in the country.

India VIX, a gauge for markets short term expectation of volatility dipped 1.48% at 15.07 from its previous close of 15.29 on Tuesday. (Provisional)

The CNX Nifty ended at 8174.10, down by 92.90 points or 1.12% after trading in a range of 8155.25 and 8286.40. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 2.99%, ACC up by 0.85%, Sesa Sterlite up by 0.54%, Zee Entertainment up by 0.45% and Jindal Steel & Power up by 0.21%. On the flip side, GAIL India down by 2.87%, BHEL down by 2.69%, Lupin down by 2.55%, NTPC down by 2.52% and ONGC down by 2.29% were the top losers. (Provisional)

European Markets were trading mixed; UK’s FTSE 100 was up by 0.24% while, France’s CAC was down by 0.22%. DAX remains closed for trade.

The Asian equity benchmarks ended mostly in green on Wednesday, with Japanese stocks rising for a fourth day following a public holiday after the yen fell and the US reported the fastest economic growth in 11 years. China’s stocks tumbled for a second day, the biggest two-day loss since June 2013 amid speculation that government is taking measures to cool the world’s best-performing major stock market over the past month. Chinese banks, which suffered a steady rise in bad loans this year, must step up efforts to rein in lending risks in 2015. The China Banking Regulatory Commission (CBRC) stated that the average non-performing loan ratio of Chinese banks was at 1.31% at the end of November.  That marked a rise from 1.16% at the end of September and 1.08% at the end of June. Japanese Finance Minister Taro Aso urged companies to boost wages to help underpin private consumption, stressing that such private-sector efforts are key to the success of premier Shinzo Abe’s ‘Abenomics’ stimulus policies. The minister also reiterated the need to push through fiscal reforms to prevent losing market trust in Japan’s finances, after having delayed a second sales tax hike next year.