Post Session: Quick Review

Snapping three consecutive sessions’ gaining streak, local equity markets ended downbeat on Tuesday on the back of losses in index heavyweights such as Infosys, ONGC, RIL, Tata Motors and L&T among others. Notably, these losses came despite the release of positive macro-economic data i.e. November IIP and December CPI released after market hours on Monday. The index for IIP for the month of November hit a five-month high of 3.8% at 169.8, higher than street’s expectation of figure of over 2%, while, India’s Consumer Price Index (CPI), snapping four consecutive months easing trend, edged higher to 5% in December as compared 4.38% in November, but lower than street expected figure of ‘5.20%’. Profit-booking which kicked in the last hour of trade mainly dragged bourses at day’s low point. By close of trade, while Sensex ended below psychologically crucial 27,500, Nifty managed to conclude above 8,300 mark, with losses in the range of 0.25%-0.60%. Meanwhile, broader indices ended mix, with Smallcap index edging lower by 0.30%, and Midcap index gaining by one tenth of a percent.

On the global front, Asian shares were mixed on Tuesday, as traders weighed a better-than-expected trade report from the mainland and the continued fall in global oil markets. U.S. stocks lost ground on Monday, extending a two-week decline, as worries about falling oil prices took hold before the start of quarterly earnings. Meanwhile, European stocks inched up in early trade on Tuesday, with Germany's Metro rallying after the retailer reported strong Christmas sales at some of its core units. Shares in Metro, Europe's fourth-biggest retailer, gained 4.1 percent as the group said it saw a recovery gaining pace at three of its four businesses in the important Christmas quarter.

Closer home, most of the sectoral indices on BSE ended into negative territory, with the only exception being the stocks from FMCG and Healthcare counters which ended upbeat on BSE. On the flip side, stocks from Realty, Consumer Durable and Oil & Gas counters were the top losers of the session. Meanwhile, Cement shares, like UltraTech Cement (up 4.51%), ACC (up 2.7%), Ambuja Cements (up 1.6%), and Shree Cement were up on renewed buying activities. Additionally, PSU OMCs advanced tailing lower crude oil prices.

The BSE Sensex ended at 27425.73, down by 159.54 points or 0.58% after trading in a range of 27324.58 and 27670.19. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.06%, while Small cap index down by 0.35%. (Provisional)

The lone gaining sectoral indices on the BSE were FMCG up by 0.72% while, Realty down by 1.85%, Consumer Durables down by 1.20%, Oil & Gas down by 1.06%, Power down by 0.89% and INFRA down by 0.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 1.69%, Mahindra & Mahindra up by 1.19%, Coal India up by 0.91%, Dr. Reddys Lab up by 0.64% and Cipla up by 0.64%. On the flip side, ONGC down by 2.41%, Hindustan Unilever down by 1.63%, ICICI Bank down by 1.49%, Tata Power down by 1.43% and Tata Steel down by 1.39% were the top losers. (Provisional)

Meanwhile, to help monetize about 2.6 trillion cubic feet of gas reserves, the government has cleared 30 projects of firms like Cairn India and ONGC. This development finally puts an end to months of logjam over discoveries held up in contractual dispute.

Also in an encouraging development for the sector, the Oil Minister, Dharmendra Pradhan unveiled that the government has approved a policy framework for relaxation, extensions and clarifications in timelines which would grant operational flexibility to help produce oil and gas from several discoveries that are mired in contractual disputes. Presently, the Production Sharing Contract (PSC) between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines have been missed by a day.

However, with the new policy framework, 3-6 months extensions in the current 18-60 month time-frame for submission of declaration of commerciality (DoC) of discoveries, which is prerequisite before investment plans can be finalized, has been approved by the Ministry. Besides, the deadline for submission of investment plan for the discoveries too is proposed to be extended by up to six months.

PSC provides for time period for submission of field development plan (FDP) for hydrocarbon discovery after DOC and has no provision for extension of this time period and non-acceptance of FDP due to late submission results in non-monetization of discoveries. But, the policy framework for relaxations, extensions and clarifications at development and production stage under PSC would help early monetization of hydrocarbon discoveries.

India VIX, a gauge for markets short term expectation of volatility rose 1.55% at 16.36 from its previous close of 16.11 on Monday. (Provisional)

The CNX Nifty ended at 8304.65, down by 18.35 points or 0.22% after trading in a range of 8267.90 and 8356.65. There were 22 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 4.43%, Asian Paints up by 3.37%, Grasim Industries up by 3.19%, ACC up by 2.95% and Kotak Mahindra Bank up by 1.93%. On the flip side, DLF down by 2.56%, ONGC down by 2.16%, Tata Power down by 1.49%, Hero MotoCorp down by 1.41% and ICICI Bank down by 1.39% were the top losers. (Provisional)

European Markets were trading in the green; UK's FTSE 100 was up by 0.59%, France's CAC was up by 0.80% and Germany's DAX was up by 0.73%.

The Asian equity benchmarks ended mostly in green on Tuesday, with Chinese stocks rising for the first time in four days after the nation’s exports climbed more than forecast. China’s exports and imports exceeded market expectations in December, a welcome sign that Beijing has found support for its cooling manufacturing sector as a stronger US economy offsets weakness in Europe and Japan. Policymakers are trying to steer the world’s second-largest economy through a soft patch as it also confronts weak consumption and a slowdown in the property market. Exports rose 9.7 percent from a year earlier in dollar-denominated terms, while imports dropped for a second month in a row by 2.4 percent. Chinese Trade Balance fell to 49.10B, from 54.47B in the preceding month. Japan’s Current Account rose to a seasonally adjusted 0.91T, from 0.95T in the preceding month while Japan’s Economy Watchers Current Index rose to a seasonally adjusted 45.2, from 41.5 in the preceding month.