Benchmarks snap seven-day winning streak

Snapping seven-day winning streak, Indian equity benchmarks ended the Friday’s trade with a cut of three fourth of a percent due to profit-booking by retail investors and funds. Apart from that, a cautious stance by market participants ahead of the Union Budget influenced the trading sentiment. Key gauges traded in red terrain throughout the session, though they tried to make some recovery for couple of times but it was not enough to pull benchmarks back into positive territory and domestic markets ended below their crucial 29,300 (Sensex) and 8,850 (Nifty) levels.

Moreover, markets failed to draw any sense of relief with Union Ministry of Commerce and Industry allaying fears over Free Trade Agreements (FTAs), saying that FTA pacts may not lead to trade deficits. Markets also failed to draw heart from Finance Minister Arun Jaitley’s statement that India is ranked fairly low in ease of doing business.

On the global front, European markets traded mostly in the red in early deals ahead of a meeting of euro zone finance ministers on Greece's bailout programme. However, losses remained capped as some support came with data showing France’s private sector unexpectedly expanded at the fastest rate in 3-1/2 years this month. Meanwhile, Japanese stocks ended at fresh 15-year high on Friday with the dollar boosted by upbeat US data, but continuing uncertainty over the Greek debt negotiations weighed on the euro.

Back home, sentiments remained dampened on reports that Domestic institutional investors (DIIs) sold shares worth a net Rs 195.74 crore on Thursday, as per provisional data released by the stock exchanges. Selling in software and technology counters too dampened the sentiments as the rupee recovered by 14 paise at 62.20 against the US dollar in early trade at the Interbank Foreign Exchange market on fresh selling of the American currency by exporters. Oil marketing companies line BPCL and IOC edged lower as brent crude oil futures edged higher on expectations that data later in the day would show a continuing decline in the US oil rig count, a clear sign of the pressure the tumble in crude is putting on oil producers.

Additionally, RIL slumped over three percent after one employee of the company was reportedly detained as part of a probe into data theft from the petroleum ministry. On the flip side, stocks related to sugar sector continued to edged higher after CCEA approved the continuation of the incentive scheme for marketing and promotion services of raw sugar production during current sugar season 2014-15.

The NSE’s 50-share broadly followed index Nifty declined by around seventy points to end below the psychological 8,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over two hundred and thirty points to finish below the psychological 29,300 mark. Broader markets, however, outperformed benchmarks and ended the session with modest gain. The market breadth remained in favour of advances, as there were 1499 shares on the gaining side against 1424 shares on the losing side while 109 shares remain unchanged.

Finally, the BSE Sensex declined by 230.86 points or 0.78% to 29231.41, while the CNX Nifty dropped 61.70 points or 0.69% to 8833.60.

The BSE Sensex touched a high and a low of 29462.09 and 29178.26, respectively. The BSE Mid cap index was up by 0.03%, while Small cap index up by 0.45%.

The top gainers on the Sensex were BHEL up by 5.18%, ITC up by 1.75%, Dr. Reddys Lab up by 0.53%, Tata Motors up by 0.36% and GAIL India up by 0.26%. On the flip side, Reliance Industries down by 3.12%, Tata Power down by 2.66%, ICICI Bank down by 2.20%, Bharti Airtel down by 1.98% and Infosys down by 1.82% were the top losers.

The top gaining sectoral indices on the BSE were Realty up by 0.91%, FMCG up by 0.75%, Consumer Durables up by 0.25%, PSU up by 0.19% and Healthcare up by 0.08% while, Oil & Gas down by 1.79%, IT down by 1.24%, TECK down by 1.21%, Infrastructure down by 0.70% and Metal down by 0.51% were the losing indices on BSE.

Meanwhile, the Foreign Investment Promotion Board (FIPB) has approved eleven proposals of foreign direct investment (FDI) amounting to Rs 1075.91 crore. The approvals include Solar Arise India projects involving FDI of Rs 216.01 crore, SeQuent Scientific, Mumbai involving FDI of upto Rs 400 crore and proposal of BLP Wind Assets Holding for an amount of Rs 371 crore for setting up a joint venture firm for making downstream investments in the renewable energy sector. Also, JP Morgan Asset Management (Asia) Inc USA has got approval for the acquisition of remaining 25 per cent held by JP Morgan India in the joint venture set up in 2006 by the two companies, entailing investment up to Rs 80.13 crore.

On the other hand the board sent two proposals relating to Aurobindo Pharma, Hyderabad and Glenmark Pharmaceuticals, Mumbai for consideration of Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, to raise the cap of foreign institutional investor (FII) holding to 49 per cent, from 35.07 per cent at present. The investment involved in each of the proposal is above Rs 1,200 crore.

FIPB rejected foreign investment application of Johnson and Johnson proposal seeking deletion of the standard pharma conditions, stipulated in the approved letter and proposal of Singapore-based AppDynamics Asia Pacific Pte for replacing of partners of the proposed LLP, as the existing have tendered their resignation.

Recently, the government has eased the procedures for companies seeking approval for foreign direct investment; they can now e-file a single copy application with the FIPB. The applicants would also get SMS/email alerts related to the queries raised by the administrative ministries, inclusion of the proposal in the scheduled FIPB meeting and decisions.

The CNX Nifty touched a high and low of 8899.95 and 8816.30 respectively.

The top gainers on Nifty were BHEL up by 5.14%, Bank of Baroda up by 2.66%, Indusind Bank up by 2.25%, ITC up by 1.75% and Zee Entertainment up by 1.53%. On the flip side, Reliance Industries down by 3.21%, Tata Power down by 2.66%, HCL Tech down by 2.31%, ICICI Bank down by 2.24% and Bharti Airtel down by 2.06% were the top losers.

European Markets were trading in the red; Germany’s DAX lost 0.43% and France’s CAC was down by 0.54%, while UK’s FTSE 100 was up by 0.17%.

The only major Asian markets trading today ‘Japanese stock exchange’ and ‘Jakarta Composite’ ended in green on Friday, on optimism about the Japanese economy recovery. Bank of Japan Governor Haruhiko Kuroda stated that aggressive via massive purchases of Japanese government bonds is not causing any problems in the market. Kuroda added that he doesn’t see any problems about implementing the quantitative and qualitative easing. By absorbing nearly all of the new government debt in the secondary market every month, the BoJ has kept long-term interest rates at record lows. The BoJ launched aggressive easing in April 2013 aimed at overcoming years of deflation and anchoring 2% inflation in about two years from then.

Separately, Japanese Economics Minister Akira Amari stated that it will take more time for Japan’s economy to escape from chronic trade deficits because of energy imports. Amari stated that there are finally signs that a weakening in the yen is benefiting exports, a phenomenon often known as the J-curve. Japan’s index of leading economic indicators rose to a seasonally adjusted 105.6, from 105.2 in the preceding month.

Nikkei 225 increased 67.51 points or 0.37% to 18,332.30 and Jakarta Composite increased 9.66 points or 0.18% to 5,400.11.