Post Session: Quick Review

Intra-day trend reversal which took place in the last hour of trade mainly led to negative session of trade at Dalal Street on Thursday that dragged Sensex and Nifty below psychologically crucial 28,500 and 8,750 levels respectively with losses of around half of a percent. Markets erasing all the losses suddenly took a U-turn in last hour of trade as market-participants resorted to incremental profit-booking activities at higher levels. Local barometer gauges, otherwise in the entire session of trade swayed to the tunes of US Fed’s dovish tone that bolstered risk appetite for emerging market assets across the globe. However, losses to some extent were restricted after Organisation for Economic Cooperation and Development’s (OECD), in its interim economic assessment report pegged India’s growth rate to 7.7% this year and 8% in the coming year. The session also turned out to be futile for broader indices, which went home with losses of over half of a percent.

On the global front, Asian shares enjoyed their best session in 18 months on Thursday as investors priced in a later start and a slower pace for future US rate rises. At the conclusion of two day’s policy meet, the Federal Reserve sounded less likely to act aggressively in raising interest rates than investors anticipated. Although the Fed removed a reference to being “patient” on rates from the statement it issued after its policy meeting, it reduced its forecast for the path of the federal funds rate and economic growth. Meanwhile, European stocks, receiving a positive handover from Asian counterparts traded higher on Thursday.

Closer home, with intra-day trend reversal most of the sectoral indices on BSE succumbed to selling pressure, nevertheless stocks from Healthcare and Consumer Durable counters managed to conclude the lackluster session of trade into positive territory. On the flip side, massive drubbing was witnessed by stocks from Bankex, Realty and Capital Goods counters which were the prominent losers of the session. In stock-related action, Airlines stocks like Spicejet and Jet Airways ran out of steam after civil aviation ministry tightened the eligibility criteria norms for flying international routes by increasing the domestic flying credits (DFCs) eligibility to 300 DFC from the current 200. According to the new proposal, airlines will have to accumulate DFCs by flying to more cities in India and will have the right to automatically fly overseas once the credits cross a certain threshold. The overall market breadth on BSE was in the favour of decliners which thumped advances in the ratio of 1112:1718; while 131 shares remained unchanged.

The BSE Sensex concluded at 28469.67, down by 152.45 points or 0.53% after trading in a range of 28411.70 and 28978.74. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.59%, while Small cap index down by 0.58%. (Provisional)

The gaining sectoral indices on the BSE were Consumer Durables up by 0.48% and Healthcare up by 0.42% while, Bankex down by 1.76%, Realty down by 1.50%, Capital Goods down by 1.00%, Oil & Gas down by 0.68% and FMCG down by 0.64% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 2.17%, TCS up by 1.53%, NTPC up by 1.37%, ONGC up by 0.99% and Tata Steel up by 0.90%. On the flip side, Axis Bank down by 3.26%, BHEL down by 2.09%, SBI down by 1.92%, Reliance Industries down by 1.80% and ICICI Bank down by 1.69% were the top losers. (Provisional)

Meanwhile, domestic natural gas prices are likely to be slashed by around 10 percent to $ 5.02 per unit from April 1, as compared to the current price of $5.61. On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared to $5.05 currently. The revised price from April 1 is arrived at by applying the Cabinet-approved formula on the select average global prices for the fuel between January and December 2014. The new government had in October 2014 used the new formula to fix price of almost all domestically produced natural gas at $5.61 per mmBtu for the period up to March 31.

There was a drop in prices at international gas hubs in the second half which led to the reduction in price - US Henry Hub dropped from $ 6 per mmBtu in February to $ 3.78 per mmBtu in October and from $ 10.72 per mmBtu on NBP in January to $ 6.40. The new price based on a net calorific value basis will be announced shortly and will be valid for the first half of 2015-16.

The CCEA on October 18 last year approved the formula, after tweaking the Rangarajan formula approved by the UPA government in June 2013. The price is to be revised every six months. Rates for next six months are to be decided based on one year average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

This will be the first reduction in natural gas in India, though the current price of $ 5.61 per mmBtu is already among the lowest in Asia Pacific. China pays $ 11.9 per mmBtu rate for new projects, while Indonesia and the Philippines pays the explorer $ 11 and $ 10.5 respectively.

India VIX, a gauge for markets short term expectation of volatility dipped 0.98% at 15.36 from its previous close of 15.51 on Wednesday. (Provisional)

The CNX Nifty settled at 8634.65, down by 51.25 points or 0.59% after trading in a range of 8614.65 and 8788.20. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 2.58%, Asian Paints up by 2.53%, GAIL India up by 2.13%, Tata Steel up by 1.46% and TCS up by 1.44%. On the flip side, PNB down by 3.92%, Bank of Baroda down by 3.16%, Axis Bank down by 3.05%, BPCL down by 2.47% and Indusind Bank down by 2.44% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX rose 0.16%, France's CAC was gained by 0.19% and UK's FTSE 100 was up by 0.21%.

The Asian markets closed mostly in green on Thursday, as investors noted that Federal Reserve has moved to clarify the terms of a widely expected rate hike this year. Chinese cabinet stated that the country will make flexible use of its monetary policy tools to support the economy and employment. The state council added that policymakers will also increase targeted adjustments to policy to bolster growth in the world’s second-largest economy. Japan Automobile Manufacturers Association stated that demand for new cars, trucks and buses is expected to fall 5.4 per cent to 4.99 million vehicles in the fiscal year ending in March 2016. That would mark a second straight year of declines, as car sales continue to suffer from the hangover of a sales take hike in April last year. Japan’s All Industries Activity Index rose to a seasonally adjusted 1.9%, from -0.1% in the preceding month whose figure was revised up from -0.3%.