Benchmarks witness bloodbath on F&O expiry session

Prolonging their southward journey for seventh straight session, Indian equity markets witnessed blood bath on F&O expiry session with both the major indices losing over one and a half percentage points and ending below their crucial 8,350 (Nifty) and 27,500 (Sensex) levels amid feeble global cues. Selling was both brutal and wide-based as none of sectoral indices, barring Capital Goods, on BSE were spared. Counters, which featured in the list of worst performers, include realty, oil and gas, capital goods and public sector undertaking.

Sentiments weighed down on worries that foreign investors may trim positions on risk aversion after Saudi Arabia launched air strikes in Yemen. Overseas funds sold index futures worth Rs 1,386 crore ($221.2 million) on Wednesday ahead of monthly derivative expiry and end of the fiscal year. On the political front, the NDA government may have to let the Land ordinance lapse and wait for the second half of parliament's budget session that starts from April 20 to introduce the Land Acquisition and GST Bill. Meanwhile, the Cabinet Committee of Economic Affairs (CCEA) led by the Prime Minister Narendra Modi approval of the plan to use regassified LNG to restart stalled gas-based power projects in India is likely to add to the profits of gas and power companies such as GAIL, Reliance Power among others.

Selling got intensified after European counters made a weak start, with the London Stock Exchange leading the market lower on news that Borse Dubai will sell its full stake in the company and ARM Holdings extending the previous session's steep losses, tracking its weaker US peers. Asian markets ended mostly in the red after Saudi Arabia and Gulf region allies launched military operations including air strikes in Yemen on Thursday to counter Iran-allied forces besieging the southern city of Aden where the US-backed Yemeni president had taken refuge.

Back home, depreciation in Indian rupee dampened the sentiments. Rupee was trading at 60.44 per dollar at the time of equity markets closing compared with its previous close of 60.03/04 per dollar. Selling in software and technology counters too dampened the sentiments on account of soft economic data in US, which is the biggest outsourcing market for Indian IT services firms. In economic data, US business investment spending plans fell for a sixth straight month in February weighed down by a strengthening dollar, weak global demand and restrained activity due to poor weather. On the flip side, telecom stocks edged higher after the Ministry of Communications & Information Technology said that the auction of spectrum in 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands came to an end.

The NSE’s 50-share broadly followed index Nifty tumbled by around one hundred and ninety points to end below the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over six hundred and fifty points to finish below its psychological 27,500 mark. Broader markets too witnessed blood-bath and ended the session with a cut of around a percentage point. The market breadth remained in favor of decliners, as there were 979 shares on the gaining side against 1822 shares on the losing side while 115 shares remain unchanged.

Finally, the BSE Sensex plunged by 654.25 points or 2.33% to 27457.58, while the CNX Nifty dropped by 188.65 points or 2.21% to 8,342.15.

The BSE Sensex touched a high and a low of 27997.14 and 27384.87, respectively. The BSE Mid cap index was down by 0.84%, while Small cap index was down by 1.00%.

The top gainers on the Sensex were Bharti Airtel up by 0.98%, GAIL India up by 0.45%, Larsen & Toubro up by 0.18% and Hero MotoCorp up by 0.17%. On the flip side, HDFC down by 5.32%, Wipro down by 4.01%, Sesa Sterlite down by 3.90%, Infosys down by 3.30% and SBI down by 3.18% were the top losers.

The gaining sectoral indices on the BSE were Capital Goods up by 0.08% while, IT down by 2.63%, Bankex down by 2.52%, Metal down by 2.24%, TECK down by 2.04% and Healthcare down by 1.90% were the losing indices on BSE.

Meanwhile after 19 days of fierce bidding, the government raked in a record bounty of nearly Rs 1.1 lakh crore in the country's biggest auction of telecom spectrum that ended on Wednesday, triggering fears of hike in call and data rate. This is highest ever in history of India. The spectrum auction conducted in 2010 brought about Rs 106,000 crore which included Rs 30,000 crore payments.

In a fiercely-contested spectrum sale, which lasted 115 rounds and was spread over 19 days as telecom heavyweights such as Bharti Airtel, Vodafone and Idea Cellular bid aggressively to protect their businesses as new players like Reliance Jio too participated in the auction.

Of the total 470.75 Mhz of spectrum put up for sale, about 11% remained unsold which also included 800 Mhz, 1800 Mhz and 2100 Mhz (3G) band. Maximum bids worth Rs 72,964.54 crore came in for spectrum in 900 Mhz band. At base price fixed by government the value of 900 Mhz frequency that attracted bids was about Rs 37,841 crore. The 800 Mhz spectrum worth Rs 9,710 crore at base price got sold at premium price of Rs 17,158.79 crore. The 3G spectrum and 1800 Mhz spectrum contributed Rs 10,115.41 crore and Rs 9,636.17 crore respectively against their value of Rs 9,620 crore and Rs 8,292.4 crore.

With the spectrum finally concluding, victorious bidders need to pay a quarter to a third of the winning price initially, and the rest by 2027. Spectrum revenue is key for the government to plug its fiscal deficit. However, the government's payday could be delayed as the final allocations to operators will take place after Thursday, when the Supreme Court issues its ruling on multiple cases questioning the auction guidelines and criteria.

The CNX Nifty touched a high and low of 8,499.45 and 8,325.35 respectively.

The top gainers on Nifty were UltraTech Cement up by 1.88%, Bharti Airtel up by 1.27%, Ambuja Cements up by 0.90%, BPCL up by 0.81% and Larsen & Toubro up by 0.63%. On the flip side, PNB down by 4.47%, HDFC down by 4.11%, Wipro down by 3.95%, SSLT down by 3.81% and DLF down by 3.06% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 1.56%, France's CAC was down by 1.37% and UK's FTSE 100 was down by 1.15%.

The Asian markets closed mostly in red on Thursday, following weak US economic data and a sharp sell-off in US shares. Investors have also taken cautious approach after Saudi Arabia launched air strikes in Yemen. Bank of Japan has reported that the country’s exports struggled for the past two years due to lower demand for capital goods, a shift in production overseas and a loss of competitiveness, but these structural problems are fading away. As these structural problems become less of a factor, exports are likely to expand and will get an added boost from the yen’s recent weakening. Strong exports are important because they keep factory workers employed, supporting consumer spending and the BOJ’s plan to achieve 2% inflation. Hong Kong Trade Balance rose to a seasonally adjusted -35.9B, from -37.0B in the preceding month. Singaporean Industrial Production fell to an annual rate of -3.6%, from 1.3% in the preceding month whose figure was revised up from 0.9%. South Korean Consumer Confidence fell to 101, from 103 in the preceding month.