Post Session: Quick Review

Tuesday’s session was an absolute massacre for Indian equity markets, which after snapping six consecutive sessions’ gaining streak, cracked over massive 3%, dragging both Sensex and Nifty to their month low levels below 27,000 and 8,200 levels respectively. Notably, markets suffered biggest single day for September 3, 2013 and biggest percentage absolute fall since July 6, 2009. Meanwhile, broader indices too participating into the glut, ended down in dumps with cut of around 3%.

Markets got sold off on heavy volumes as investors offloading their position in risky equities took a safety flight in the face of a weak outlook for global growth and inflation concerns, and growing fears Greece may leave the euro zone. Meanwhile, sentiment was also dented by somber macro-economic data. On the macro-front, the activity in Indian services sector, which accounts for around 60% of country’s GDP, slipped to 51.1 in December, which is lower than the five-year high index reading of 52.6 for November. 

On the global front, Asian shares slumped on Tuesday as sliding oil prices and political uncertainty in Greece forced investors out of riskier assets and into the safety of government bonds. Meanwhile, European shares too slipped tracking euro fall to a nine year low against the dollar on Monday as bets mounted that the currency will suffer further declines, faced with the possibility of more monetary easing by the European Central Bank and its diminishing status as a reserve currency.

Closer home, most of the sectoral indices on BSE ended into negative territory, nevertheless stocks from Oil & Gas, Realty and Power counters were the prominent losers of the session. Additionally, telecom stocks too rang off after  the Union Cabinet approved the largest ever telecom spectrum auction that is targeted to fetch the exchequer at least Rs 64,840 crore, much higher than the target of Rs 43065 crore set in the Union Budget for 2014-15. However, sugar stocks, like Bajaj Hindusthan, Dhampur Sugar Mills, Sakthi Sugars, Balrampur Chini Mills and Shree Renuka Sugars were in demand on renewed buying. The overall market breadth on BSE was in the favour of decliners, which thumped advances in the ratio of 646:2247, while 62 shares remained unchanged (Provisional).

The BSE Sensex ended at 26987.46, down by 854.86 points or 3.07% after trading in a range of 26937.06 and 27698.93. There were 1 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.95%, while Small cap index down by 2.95%. (Provisional)

The losing sectoral indices on the BSE were Oil & Gas down by 4.17%, Realty down by 3.66%, Metal down by 3.49%, PSU down by 3.39%, Capital Goods down by 3.24%, while there were no losers on the index. (Provisional)

The lone gainer on the Sensex was Hindustan Unilever up by 1.35%. On the flip side, ONGC down by 6.06%, Sesa Sterlite down by 5.39%, Tata Steel down by 5.20%, Reliance Industries down by 5.03% and HDFC down by 4.90% were the top losers. (Provisional)

Meanwhile, in a major encouragement for new infrastructure projects development, the government removes arbitrary environmental clearance to facilitate infrastructure projects. In its recently released notification, the environment ministry has notified that building of large industrial sheds, schools, colleges and hostels of up to 150,000 square metres are now exempted from seeking a prior green nod for construction.

The government's decision will help to boost the infrastructure development in the country as  this green hurdle had made it difficult to build any plant over 5 acres of land and had forced some investors to explore alternate production hubs with lesser red tape. The new norms would also help businesses build larger factories that enjoy economies of scale much faster. However, the Ministry cleared that new buildings must ensure environment management by putting in place systems for rainwater harvesting, solid and liquid waste management. Further, as per the new norms, investors may use recycled materials such as fly ash bricks' for building new factories. 

Earlier, in 2013, the previous government had notified that building a factory was tantamount to undertaking a construction project and stipulated a prior environment clearance for any such industrial building with a built-up area of over 20,000 square metres. This regulation had jeopardized several greenfield and brownfield investment plans of large manufacturing players including MNC auto makers Maruti Suzuki as getting such a clearance takes two years in a best-case scenario.

India VIX, a gauge for markets short term expectation of volatility zoomed 22.9% at 17.28 from its previous close of 14.07 on Monday. (Provisional)

The CNX Nifty ended at 8127.35, down by 251.05 points or 3.00% after trading in a range of 8111.35 and 8327.85. There were 1 stocks advancing against 49 stocks declining on the index. (Provisional)

The lone gainer on Nifty was Hindustan Unilever up by 1.89%. On the flip side, Jindal Steel & Power down by 6.26%, ONGC down by 5.66%, Sesa Sterlite down by 4.89%, Tata Steel down by 4.85% and HDFC down by 4.71% were the top losers. (Provisional)

European Markets were trading in the red; UK's FTSE 100 was down by 0.81%, France's CAC was down by 0.33% and Germany's DAX was up by 0.14%.

The Asian equity benchmarks ended mostly in red on Tuesday, with the regional benchmark index heading for its biggest decline in nine months, extending a global selloff as the bear market in oil deepened. China’s stronger-than-seasonal property sales in December point to a recovery in market sentiment thanks to looser housing and monetary policy, with the upbeat momentum expected to swing into 2015. China’s services sector grew at its fastest pace in three months in December as new orders remained strong, an encouraging sign of strength even as manufacturing activity slows and the property market softens. The HSBC/Markit Services Purchasing Managers’ Index (PMI) picked up to 53.4 last month from November’s 53.0, well above the 50-point level that separates growth from contraction in activity on a monthly basis. A sub-index measuring new business cooled slightly to 53.9 in December from two and half years high of 54.2 in November, but remained well in expansion territory. Japan’s Monetary Base rose to 38.2%, from 36.7% in the preceding month. Taiwanese CPI fell to a seasonally adjusted annual rate of 0.61%, from 0.86% in the preceding quarter.