Markets end three-day winning streak

Tuesday turned out to be daunting session for the Indian equity indices which got pounded by over half a percentage point as a continuing slide in crude oil prices dampened risk appetite. Final hour of trade proved to be the curse for the markets and bourses settled below their crucial 27,500 (Sensex) and 8,300 (Nifty) bastions. After trading in tight band for most part of the day’s trade, domestic gauges crashed like house of card in the last leg of trade. Sentiments remained dampened with Brent crude and US WTI both falling to their lowest in almost six years, as a persistent global supply glut offset data showing record high imports by key consumer China. Traders also remained on sidelines ahead of December WPI data, which scheduled to be released on January 14, 2015. Wholesale price inflation, which was flat in November, is expected to have picked up to 0.6 percent last month.

However, losses remained capped as sentiments got some support from reports that foreign institutional investors were net buyers in Indian equities worth Rs 245 crore on January 12, 2015, as per provisional stock exchange data. Some support also came after India’s industrial growth for the month of November came in at 3.8% versus -4.2% for October, supported by favorable base effect and a pick-up in manufacturing, higher working days on a month-on-month basis, while India’s CPI edged higher to 5% in December as compared 4.38% in November. However, the number was way lower than street's expected figure of 5.20%.

On the global front, European markets made a positive opening and were trading in green as investors opted to buy beaten down but fundamentally strong stocks. Asian markets ended mostly in the green after 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.

Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. The rupee was trading at 62.18 at the time of equity markets closing versus its previous close of 62.16. Meanwhile, slump in share of oil exploration firms too played spoil sport for the Indian equity markets as global crude oil prices eased to near six year lows amid reports that global investment bank Goldman Sachs lowered its forecast. On the flip side, Aviation stocks and oil marketing companies (OMCs) edged higher following a slump in crude oil prices.

NSE’s 50-share broadly followed index, Nifty declined by over twenty points to end below the psychological 8,300 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex tumbled by around one hundred and sixty points to end below its psychological 27,500 mark. Broader markets too struggled to get any traction and ended the session mixed. The market breadth remained in favour of decliners, as there were 1,381 shares on the gaining side against 1,541 shares on the losing side while 93 shares remain unchanged.

Finally, the BSE Sensex plunged by 159.54 points or 0.58%, to 27425.73, while the CNX Nifty declined by 23.60 points or 0.28% to 8,299.40.

The BSE Sensex touched a high and a low of 27670.19 and 27324.58, respectively. The BSE Mid cap index was up by 0.06%, while the Small cap index was down by 0.35%.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.25%, Wipro up by 1.18%, Coal India up by 0.77%, Dr. Reddys Lab up by 0.64% and ITC up by 0.64%. On the flip side, ONGC down by 2.37%, ICICI Bank down by 1.57%, Hero MotoCorp down by 1.45%, Tata Steel down by 1.37% and Tata Power down by 1.37% were the top losers.

On the BSE Sectoral front FMCG up by 0.72% and Healthcare up by 0.14% were the only gainers, while Realty down by 1.85%, Consumer Durables down by 1.20%, Oil & Gas down by 1.06%, Power down by 0.89%, INFRA down by 0.70% were top losers in the space. 

Meanwhile, with Indian industrial production in November 2014 growing at the fastest pace in 5 months, Indian Inc has stated that turnaround needs to be made consistent for a longer period and reiterated its call for a interests rate cut as December CPI inflation recorded below the RBI's 6 percent target. Industrial production for the month of November hit a five month high of 3.8%, higher than street's expected figure of over 2%. CPI inflation recorded at 5% in December below street expected figure of 5.20%.

CII Secretary General Chandrajit Banerjee has asserted that going forward, the incipient signs of revival would transform into a firm recovery especially as there is some progress in investment intentions and business confidence. Highlighting the need of more measures to boost manufacturing, he stated that the government should put in place critical entrepreneur friendly reforms which would enhance investments in the economy. Tax regime should be made transparent, predictable and the pace of reviving stalled projects should be stepped up, possibly with the support of states.

Assocham President Rana Kapoor has stated that turnaround in industrial production during November needs to be made consistent for a longer period with a secular growth in manufacturing. Furthermore, the efforts from the government and the RBI have to continue to unclog several sectors from environmental and other regulatory issues. FICCI President Jyotsna Suri stated that improving factory output is a good sign for economic recovery adding that recent measures taken by the government have improved the business confidence in the economy.

The CNX Nifty touched a high and low of 8,356.65 and 8,267.90 respectively.

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 Company down by 1.49%, Hero MotoCorp down by 1.41% and ICICI Bank down by 1.39% were the top losers.

European Markets were trading in the green; UK's FTSE 100 was up by 0.44%, Germany's DAX was up by 0.48% and France's CAC was up by 0.63%.

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.