Benchmarks extend southward journey for sixth straight day; Nifty breaches 8,700 mark

Indian equity benchmarks once again ended the Friday’s session in the red, extending their southward journey for sixth straight session amid weak global cues. After trading flat till noon deals, benchmarks slipped in red terrain in last leg of trade as investors opted to square-off their positions in riskier assets ahead of the US jobs and wages data due to be released later in the day for further clues as to when the Federal Reserve might raise interest rates.

Sentiments remained down-beat on reports that foreign portfolio investors sold shares worth a net Rs 27.43 crore on February 5, 2015, as per provisional data. Moreover, the Delhi assembly polls on February 7 are likely to dictate the trend on the bourses on Monday as market participants stayed wary of the outcome. However, losses remained limited as some support came in with an HSBC report that India’s manufacturing and services sectors expanded at a faster pace than China in January. Among the four largest emerging economies, HSBC said that only India bucked the trend and recorded one of the fastest growth in January. Meanwhile, as a measure to incentivise long term investors, the Reserve Bank of India (RBI) allowed foreign portfolio investors (FPIs) to invest in government securities the coupons received on their existing investments in government securities.

Global cues remained sluggish with European markets making a negative start after disappointing German industrial production data and as concerns over Greece’s future in the euro zone continued to dominate market sentiment. Asian markets ended mostly in the red as investors awaited the closely-watched US jobs report, which could provide cues on the US economic recovery.

Back home, depreciation in Indian rupee too dampened the sentiments. The rupee fell by three paise to 61.76 at the time of equity markets closing on fresh dollar demand from banks and importers. Meanwhile, shares of public sector oil marketing companies (OMCs) edged lower after global crude oil prices rebounded. On the flip side, stocks related to software and technology counters edged higher as Cognizant Technologies Solutions Corp posted robust revenue growth forecast for 2015. Cognizant forecast 2015 revenue growth of at least 19 per cent after growing at just 16 per cent in 2014.

The NSE’s 50-share broadly followed index Nifty declined by over fifty points to end below the psychological 8,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and thirty points to end below its crucial 28,750 mark. Broader markets too struggled to get any traction during the trade and ended the session with a cut of over a percent. The market breadth remained in favor of decliners, as there were 860 shares on the gaining side against 2,014 shares on the losing side while 98 shares remain unchanged.

Finally, the BSE Sensex declined by 133.06 points or 0.46% to 28717.91, while the CNX Nifty dropped 50.65 points or 0.58% to 8661.05.

The BSE Sensex touched a high and a low of 28922.85 and 28647.14, respectively. The BSE Mid cap index was down by 1.06%, while Small cap index down by 1.82%.

The top gainers on the Sensex were HDFC up by 2.45%, Infosys up by 1.63%, Sesa Sterlite up by 1.35%, ITC up by 1.32% and Bharti Airtel up by 1.14%. On the flip side, Tata Motors down by 5.05%, BHEL down by 4.79%, Sun Pharma down by 2.98%, Tata Steel down by 2.67% and Mahindra & Mahindra down by 2.59% were the top losers.

On the BSE Sectoral front IT up by 0.89%, FMCG up by 0.84% and TECK up by 0.74% while, Auto down by 2.77%, Healthcare down by 1.72%, Bankex down by 1.27%, Power down by 1.25% and Oil & Gas down by 1.09% were the losing indices on BSE.

Meanwhile, in a move to throw a life-line to the struggling Goan iron ore sector, the Centre may soon come out with a special package for miners in the state by slashing duty on exports of the steel-making raw material, which presently stands at 30%

Mining plays a vital role both for Goa's economy and its people. However, mining activity in Goa has been shut for over two years now, although the Supreme Court lifted the ban in April last year. However, it is back on January 15, the Goa government revoked its order of September, 2012 regarding suspension of mining operations.

In a double whammy for the state, ban on mining coupled with an exorbitant 30% duty on iron ore exports made it difficult for miners in the state, which was once the largest exporting one. These problems got compounded with the slump of the iron ore price globally to its five-and-a-half year low last week.

In wake of all these problems faced by the state, Steel and Mines Minister Narendra Singh Tomar has also written to the Finance Ministry seeking an upward duty revision on steel imports that now ranges from 5-7.5%. It has sought introduction of a different duty structure for exports of low-grade iron ore from the state.

Notably, the government is contemplating on this move after steel imports into the country in the first nine months of the current fiscal zoomed around 60% forcing Indian domestic steel-makers to hold on prices even as their margins are getting further squeezed.

The CNX Nifty touched a high and low of 8726.20 and 8645.55 respectively.

The top gainers on Nifty were Cairn India up by 2.87%, HDFC up by 2.74%, NMDC up by 2.03%, Infosys up by 1.67% and Sesa Sterlite up by 1.35%. On the flip side, Tata Motors down by 5.02%, BHEL down by 4.59%, DLF down by 3.51%, Sun Pharma down by 3.41% and Jindal Steel & Power down by 2.90% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 0.68%, UK's FTSE 100 was down by 0.26% and France's CAC was down by 0.35%.

The Asian indices reversing their last session’s performance, ended mostly in green on Friday. While the Chinese markets declined on profit taking, the Japanese market surged keeping the spirit high throughout the day, tracking the overnight gains in the US markets. The equity indices in the region were optimistic about the monthly US jobs data, which is likely to show an increase of about 230,000 jobs in January following the addition of 252,000 jobs in December. Japanese shares were additionally jubilant as oil prices steadied and Greece reassured investors that its banks will retain funding access. On the economic front, Japan's official reserve assets increased by $555 million month-over-month to $1,261.103 billion in January.