Post Session: Quick Review

Logging third consecutive session of losses, Indian equity markets ended into negative territory on Friday, with a gash of around 3/4th of a percent on sustained selling activities by funds and retail investors in absence of any positive triggers at home front amidst somber global cues. Besides, prevailing caution ahead of the release of the government’s market borrowing calendar for April-September also weighed on the sentiment. Additionally, the losses also came on the back of participants slashing their position into equities ahead of the volatile F&O expiry week. In the entire session of trade, markets did not once bounce back into positive territory and rather kept on losing ground to conclude near day’s low point. By close of trade, both Sensex and nifty settled below psychologically crucial 28,300 and 8,600 levels respectively. The session was also disappointing for broader indices, which underperforming larger counterparts went home with larger cuts of around 1-2%.

On the global front, Asian stocks ended mixed on Friday as the US dollar recouped its losses following the Federal Reserve meeting on Wednesday. Chinese stocks ended mostly higher even after a survey showed business sentiment had worsened in March, amid deflationary pressures and rising labour costs. Meanwhile, European shares inched higher in early deals on Friday, helped by gains in the construction sector after Holcim and Lafarge agreed to new merger terms. Holcim rose 1.6 per cent and Lafarge added 3.6 per cent after the companies agreed to new terms, including a new share-swap ratio for the deal, over their planned multi-billion-euro merger, which would create the world's biggest cement firm.

Closer home, in the abysmal session of trade, most of the sectoral indices on BSE ended into negative territory, nevertheless worst performers were the stocks from Realty, Power and Fast Moving Consumer Goods counters. On the flip side, buying was witnessed by stocks from Information Technology and Technology counters which emerged as the only saving grace for the session. In stock-specific activity, sugar stocks soured after reports suggested that sugar production in Maharashtra which were set to increase by 30%, would the prices under pressure. Meanwhile, telecom stocks rang off in trade as aggressive bidding by telecom companies continued on 14th day of telecom spectrum auction on Friday, March 19, 2015. However, notably even the Metal & mining which edged up as Rajya Sabha passed Mines and Minerals Bill succumbed to profit-booking by close of trade. The Mines and Minerals (Development and Regulation) Amendment Bill, 2015 seeks to introduce the system of auction of mines that supply minerals like iron ore, bauxite and limestone to enhance transparency in mineral allocations. The overall market breadth on BSE was in the favour of decliners which thumped advances in the ratio of 763:2107; while 105 shares remained unchanged.

The BSE Sensex concluded at 28261.08, down by 208.59 points or 0.73% after trading in a range of 28209.66 and 28484.36. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.49%, while Small cap index down by 2.14%. (Provisional)

The gaining sectoral indices on the BSE were IT up by 0.86% and TECK up by 0.49% while, Realty down by 3.74%, Power down by 2.09%, FMCG down by 2.09%, Consumer Durables down by 1.93% and Healthcare down by 1.52% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 3.06%, Infosys up by 1.60%, Coal India up by 0.88%, HDFC up by 0.64% and HDFC Bank up by 0.61%. On the flip side, NTPC down by 6.41%, BHEL down by 3.53%, ICICI Bank down by 3.41%, GAIL India down by 2.85% and Mahindra & Mahindra down by 2.69% were the top losers. (Provisional)

Meanwhile, the home grown ratings agency, Care Ratings has warned that consumers will have to bear the brunt of ongoing aggressive bidding for telecom spectrum, which would force mobile operators to hike tariff. Bids topped Rs 1,08,000 crore on the 13 days, much more than the amount realised from the last auction in 2010 and considerably higher from the government's reserve price of Rs 82,000 crore, with 89 per cent of 2G and 3G radiowaves put on sale provisionally allocated to telecom operators.

The rating agency has said that the ongoing auction would result in more pressure on the companies' debt profile, which is already under pressure, 'We expect that operators will further leverage themselves, while customers would have to bear the brunt of tariff hikes which would become inevitable for operators to realise returns on these huge investments.'

CARE has further noted that companies are required to pay 25-33% upfront on their winning bids, which would accrue in revenues of Rs 25,000 crore for the government within this fiscal, ending March 31. It said that given these circumstances, tariff hikes are 'inevitable', adding that moves by third party applications to offer voice service, which contributes the maximum revenue for telcos, is also a threat. Recently, WhatsApp, the most popular instant messaging service used worldwide, has started rolling out the voice calling feature to its users.

A significant percentage of revenues for players are at stake due to impending expiry of spectrum, resulting in buying spectrum to ensure continuity of business. Licences for Idea Cellular's 9 circles, Airtel's 6 circles and 7 circles each of Vodafone and RCom are up for renewal.

India VIX, a gauge for markets short term expectation of volatility tumbled 7.35% at 14.08 from its previous close of 15.20 on Thursday. (Provisional)

The CNX Nifty settled at 8570.90, down by 63.75 points or 0.74% after trading in a range of 8553.00 and 8627.90. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Wipro up by 2.77%, Cairn India up by 1.44%, Power Grid Corpn. up by 1.44%, Ambuja Cement up by 1.39% and Infosys up by 1.21%. On the flip side, NTPC down by 5.98%, Jindal Steel & Power down by 5.38%, BHEL down by 3.85%, ICICI Bank down by 3.51% and BPCL down by 3.50% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX rose 0.43%, France's CAC was gained by 0.16% and UK's FTSE 100 was up by 0.11%.

The Asian markets closed mixed on Friday, due to the mixed cues overnight from Wall Street following the Fed-inspired rally seen in the previous session. The Bank of Japan in minutes released from its February 17-18 board meeting reported that consumer prices may flatten and real wages may also drop as a sharp drop in global oil prices takes its toll. The remarks suggest continued concern over hitting a target of sustained 2% inflation this fiscal year even as economic growth looks more promising, adding that the pace of buying government bonds to support easing needs to be assessed. Bank of Japan Governor Haruhiko Kuroda stated that the longer-term domestic price trend is still upward because the base effect of last year’s plunge in crude oil prices on consumer inflation will disappear eventually. Kuroda added that market participants are unlikely to seek any monetary policy implications in what is projected to a temporary downward effect of lower energy prices on the year-on-year change in core CPI, which is set to slip further to zero and into negative territory. Kuroda repeated that the BoJ can anchor 2% inflation around fiscal 2015 ending March 31, 2016. 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%.