Post Session: Quick Review

After staging splendid recovery in previous trading session, local equity markets resumed their southbound journey and ended with loss of around half of a percent which dragged both Sensex and Nifty below psychologically crucial 28,650 and 8,700 levels respectively on sustained selling activities by market-participants in absence of positive trigger. Cautiousness ahead of release of US Federal Reserve’s policy statement later in the day that is expected to give direction on interest rates there, mainly kept market-participants on the sidelines. The Federal Reserve on Wednesday is expected to lay the groundwork for its first interest rate hike in nearly a decade, as it continues to weigh whether the U.S. recovery can hold up against collapsing oil prices and a soaring dollar. In the dismal session of trade, markets after making negative start, though attempted recovery in afternoon deals but that soon got reciprocated with profit-booking, which especially accelerating in last hour of trade dragged markets to day’s low. The session however turned out to be productive for broader indices, which outperforming larger counterparts went home with gains of 0.25%.

On the global front, most of the Asia pacific region concluded in positive territory, lifted by Stocks in China which climbed to near a seven-year high Wednesday, as hopes for further stimulus from Beijing encouraged investors to return to the market following a correction earlier this year on worries over slowing growth. Meanwhile, European shares followed Asian stocks higher on Wednesday and the dollar held steady before a Federal Reserve meeting that's expected to lay the groundwork for the first increase in U.S. interest rates in nearly a decade.

Closer home, most of the sectoral indices on BSE were trading into positive territory, however stocks from Power, Information Technology and Capital Goods counters were the worst performers of the session. On the flip side, participants lapped up stocks from Oil & Gas, Metal and Consumer Durables counters. Metal shares rose amid expectations that China will announce further stimulus measures aimed at boosting economic growth, while IT stocks declined for yet another session of rupee’s strength. The overall market breadth on BSE was in the favour of decliners which thumped advances in the ratio of 1271:1581; while 136 shares remained unchanged.

The BSE Sensex concluded at 28622.12, down by 114.26 points or 0.40% after trading in a range of 28546.76 and 28806.97. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.25%. (Provisional)

The gaining sectoral indices on the BSE were Oil & Gas up by 0.69%, Bankex up by 0.48%, Metal up by 0.40% and Consumer Durables up by 0.23%, Realty up by 0.14% while, Power down by 1.09%, IT down by 0.94%, TECK down by 0.77%, Capital Goods down by 0.72% and Auto down by 0.63% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 1.20%, Reliance Industries up by 1.20%, HDFC Bank up by 0.69%, Coal India up by 0.64% and Hero MotoCorp up by 0.59%. On the flip side, NTPC down by 3.17%, BHEL down by 2.50%, Tata Motors down by 2.20%, Wipro down by 2.10% and Mahindra & Mahindra down by 1.77% were the top losers. (Provisional)

Meanwhile, as part of the roll-out of proposed Goods and Services Tax (GST) regime by 2016-17, the government approved the release of Rs 33,000 crore in tranches to states and Union Territories to compensate them for revenue loss on account of phasing out of Central Sales Tax (CST) for three financial years up to 2012-13.

Government has already taken the permission of Lok Sabha to release about Rs 11,000 crore as CST compensation and in the first phase, Rs 10,800 crore is payable for 2010-11 as balance CST compensation. The total amount of Rs 33,000 crore is proposed to be released in 2014-15 and the subsequent two financial years. As per the agreement, 100 per cent compensation is to be paid for the 2010-11 financial year, 75 per cent for 2011-12 and 50 per cent for 2012-13.

The Centre collects CST and distributes it among states, but now in order to introduce GST the CST is being phased out and has been reduced to 2 per cent, from the earlier 4 per cent. Hence, the payment of compensation for the loss incurred on account of reduction in CST to 2 per cent from 4 per cent in 2010-11, 2011-12 and 2012-13, has to be made to states and Union Territories. The CST, a tax imposed on the inter-state movement of goods, was reduced from 4 per cent to 3 per cent in 2007-08 and further to 2 per cent in 2008-09 after the introduction of value-added tax (VAT).

India VIX, a gauge for markets short term expectation of volatility dipped 0.32% at 15.51 from its previous close of 15.13 on Tuesday. (Provisional)

The CNX Nifty settled at 8685.90, down by 37.40 points or 0.43% after trading in a range of 8664.00 and 8747.25. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 3.13%, BPCL up by 2.90%, NMDC up by 1.93%, SBI up by 1.48% and Reliance Industries up by 1.38%. On the flip side, NTPC down by 3.29%, BHEL down by 2.68%, Ambuja Cement down by 2.32%, Tech Mahindra down by 2.18% and Asian Paints down by 2.07% were the top losers. (Provisional)

European Markets were trading mostly in the red; Germany's DAX decreased 0.34% and France's CAC was down by 0.16%, while UK's FTSE 100 was up by 0.65%.

The Asian markets ended mostly in green on Wednesday, with China’s main stock index rising to its highest in almost seven years, breaking through a key psychological resistance level to raise investors’ hopes that the market has resumed a bull run begun midway through last year. The Bank of Japan board decided by an 8 to 1 vote to leave the bank’s policy target unchanged while revising down its near-term inflation outlook on weak energy prices as expected. The collapse of crude oil prices last year has clouded the prospect for the central bank plan to anchor 2% inflation in about two years from April 2013, when it launched aggressive easing. That has caused the BoJ to revise down its near-term inflation outlook. At the same time however, the BoJ sees the economic recovery intact. Japan’s index of leading economic indicators rose to a seasonally adjusted 105.5, from 105.1 in the preceding month. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to its preceding month.