Post Session: Quick Review

Sliding for fourth consecutive session, local equity markets nursed cuts of over half a percent, which dragged both Sensex and Nifty below psychologically crucial 28,850 and 8,750 levels respectively in absence of any buying activity amidst weak global cues. Meanwhile, prevailing caution ahead of election in national capital of the country, also kept market-participants on the tenterhooks. While, the state will go to polls in a single phase on February 7, counting of votes has been scheduled on February 10, and the poll process will be completed by February 12. Notably, markets also overlooked good macro-economic data and better than expected Q3 numbers from Canara Bank, Central Bank of India and Wockhardt. On the macro-front, growth among India’s services firms picked up pace in January as burgeoning order books boosted confidence, suggesting further expansion this month, a business survey showed on Wednesday. The HSBC Services Purchasing Managers’ Index (PMI), compiled by Markit, rose to 52.4 in January from 51.1 in December. It has been above 50 level, which denotes growth, since May 2014.

On the global front, Asian pacific shares rose on Monday after oil prices jumped to one month high overnight. Among the region, china shares rose as investors looked to continued expansion of services activity in January. The HSBC China services purchasing managers index fell to a six-month low at 51.8 in January from 53.4 in December, HSBC Holdings PLC said Wednesday, pointing to a slowdown outside the nation’s factory sector. Meanwhile, European stocks oscillated in early trading Wednesday, with investors digesting the previous session’s sharp gains, spurred by a recovery in the battered price of oil and on swelling hopes for an agreement between the New Greek government and its creditors.  Greece’s new Finance Minister, Yanis Varoufakis, after meeting his British counterpart, George Osborne underscored that Athens was working on a road map to lessen the burden of his country’s hefty debt pile, and he hoped to have an agreement with Greece’s creditors by the beginning of June.

Closer home, most of the sectoral indices on BSE were reeling under selling pressure, nevertheless stocks from Capital Goods, Bankex and Power counters were the prominent losers of the session. Meanwhile, banking shares tanked for yet another session after RBI in much anticipated move left key rates unchanged in previous monetary policy review and provided no clarity on its trajectory going in the future. Besides, Auto stocks ebbed after reporting their monthly sales figures. On the flip side, maximum demand was witnessed by stocks from Metal, Healthcare and Realty counters, which topped the gainers’ list.

On the earnings front, Canara Bank shares rallied over 3% after the bank’s third quarter net profit climbed 60.4% year-on-year to Rs 656 crore boosted by higher other income and lower provisions. However, Asset quality weakened a bit during the quarter as gross non-performing assets (NPA) increased 56 basis points Y-o-Y (up 43 bps) Q-o-Q to 3.35%.

Additionally, Central Bank of India shares also edged up after the bank’s net profit grew over two folds at Rs 137.65 crore for third quarter ended December 31, 2014 as compared to Rs 61.53 crore for the corresponding quarter of the previous year. Besides, Wockhardt shares too spurted by 3% after the pharmaceutical firm’s third consolidated net profit increased 14% year-on-year to Rs 347 crore led by strong operational income and other income. Meanwhile, in stock-specific action, sugar stocks, like Shree Renuka Sugar, Bajaj Hindustan, Balrampur Chini, Eid Parry, soured in trade after ISMA reported that sugar production grew by 15% at 13.48 mt, adding to the surplus stocks situation. The overall market breadth on BSE was in the favour of decliners, which thumped advances in the ratio of 1337:1561, while 115 shares remained unchanged (Provisional).

The BSE Sensex ended at 28883.11, down by 117.03 points or 0.40% after trading in a range of 28824.68 and 29133.62. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.25%, while Small cap index up by 0.05%. (Provisional)

The gaining sectoral indices on the BSE were Metal up by 2.10%, Realty up by 0.97%, Healthcare up by 0.93%, Oil & Gas up by 0.27% and PSU up by 0.19% while, Capital Goods down by 1.88%, Bankex down by 1.23%, Power down by 1.14%, Consumer Durables down by 1.12% and Auto down by 1.09% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindalco up by 3.28%, Tata Power up by 3.09%, ONGC up by 2.55%, Sesa Sterlite up by 2.28% and Coal India up by 2.13%. On the flip side, Axis Bank down by 4.43%, BHEL down by 3.99%, SBI down by 2.42%, Larsen & Toubro down by 2.07% and TCS down by 1.78% were the top losers. (Provisional)

Meanwhile, helped by moderation in petroleum and gold imports, India's Current Account Deficit (CAD) is estimated to come down to 1.3% of GDP in the fiscal ending March, significantly lower than earlier projections, according to Reserve Bank of India (RBI).

The CAD, which is the difference between the inflow and outflow of foreign exchange, was 1.7% of GDP ($32.4 billion) in 2013-14 and at a record high of 4.7 % ($88 billion) in 2012-13. Reserve Bank of India has projected lower CAD on account of sharp fall in international crude prices translated into a sizable saving on account of Petroleum Oil Lubricants (POL) imports. Also, gold imports, coming off the seasonal cum pent-up demand spurt in September-November, have moderated. Further, India's central bank also pointed that non-oil non-gold import growth remained firm and in positive territory.

Notably, the CAD in the April-September period of current fiscal stood at 1.9% at $17.9 billion, down from 3.1% at $ 26.9 billion in the same period in 2013-14. Also, India's trade deficit declined to a 10-month low of $9.43 billion in December 2014, mainly on account of falling imports due to slump in crude prices, though exports too have come down.

India VIX, a gauge for markets short term expectation of volatility surged 1.22% at 20.05 from its previous close of 19.81 on Tuesday. (Provisional)

The CNX Nifty ended at 8723.70, down by 32.85 points or 0.38% after trading in a range of 8704.40 and 8792.85. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 4.06%, Cairn India up by 3.46%, Tata Power up by 3.15%, Sesa Sterlite up by 2.80% and Coal India up by 2.64%. On the flip side, Axis Bank down by 4.77%, BHEL down by 4.07%, SBI down by 2.41%, Tech Mahindra down by 2.29% and Zee Entertainment down by 2.12% were the top losers. (Provisional)

European Markets were trading in the red; UK's FTSE 100 was down by 0.40%, France's CAC was down by 0.32% and Germany's DAX was down by 0.59%.

The Asian equity benchmarks ended mostly in green on Wednesday, following rallies in Europe on hopes that Greece will be able to thrash out a new debt deal with creditors. China’s services sector grew at the slowest pace in six months in January raising expectations that policymakers will need to unveil more stimulus measures to avert a sharper slowdown in the world’s second-largest economy. The HSBC/Markit Services Purchasing Managers’ Index (PMI) fell to 51.8 last month - the lowest since July 2014 - from December’s 53.4. But it remained above the 50-point level that separates contraction from growth in activity on a monthly basis.

The International Monetary Fund (IMF) lowered its forecast for Thailand’s economic growth to 3.5% in 2015, and 0.5% growth in 2014, amid concerns over political stability, weak export demand and slow consumption. Thailand’s military government has struggled to revive growth in Southeast Asia’s second-largest economy since seizing power in May to end prolonged political unrest that hurt tourism, investment and consumption. Japan’s Average Cash Earnings rose to a seasonally adjusted 1.6%, from 0.1% in the preceding quarter whose figure was revised up from -1.5%.