Benchmarks extend southward journey for second straight session

Extending their losing streak to second straight session, Indian equity benchmarks ended the Thursday’s trade with a cut of around half a percent. Investors remained on sidelines ahead of some big earnings announcement which would guide the movement in the market. IT bellwether Tata Consultancy Services (TCS) is expected to report a muted fourth quarter earnings today, putting the whole sectoral gauge in the somber mood. However, losses remained capped up to certain extent as some comfort came in with Prime Minister Narendra Modi in the last leg of 3-nation tour in Canada saying that there is an atmosphere of trust in India and there is one solution to all the problems and that is development.

Earlier, markets made a cautious start and extended their southward journey as investors continued to book profit in technology stocks like TCS and Infosys on worries that strength in the rupee after inflation data may persist and hurt revenues. Domestic indices even went on to test important psychological 28,500 (Sensex) and 8,650 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed their losses from thereon as investors continued hunt for fundamentally strong stocks. Some support also came on report that foreign institutional investors were net buyers in equities to the tune of Rs 108 crore on Wednesday, as per provisional stock exchange data.

On the global front, European markets made a sluggish start with CAC, DAX and FTSE were trading lower in early deals after credit rating agency Standard & Poor’s downgraded Greece and there appeared to be no thaw in the icy rift between Athens and its creditors that would unlock bailout funds and bring the country back from the brink of default. However, Asian equity indices ended mostly in the green, led by Chinese market, which surged over two and half a percent to hit fresh seven-year highs, after a report that foreign direct investment (FDI) in China rose 2.2 percent on the year in March.

Back home, selling was both brutal and wide-based as none of sectoral indices, barring oil and gas, on BSE were spared. Counters, which featured in the list of worst performers, include realty, capital goods and healthcare. Additionally, stocks of public sector oil marketing companies i.e BPCL, HPCL and IOC edged lower as crude oil prices firm up. On the flip side, sugars stock surged on reports that the government plans to substantially hike the import duty on sugar.

The NSE’s 50-share broadly followed index Nifty declined by over forty points to end below the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and thirty points to finish below its psychological 28,700 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 1,097 shares on the gaining side against 1,707 shares on the losing side while 112 shares remain unchanged.

Finally, the BSE Sensex declined by 133.65 points or 0.46% to 28666.04, while the CNX Nifty dropped by 43.50 points or 0.50% to 8,706.70.

The BSE Sensex touched a high and a low of 28876.23 and 28497.70, respectively. The BSE Mid cap index was down by 0.67%, while Small cap index was down by 0.61%.

The top gainers on the Sensex were ONGC up by 3.25%, Mahindra & Mahindra up by 1.31%, Hindalco up by 1.25%, HDFC up by 0.97% and NTPC up by 0.94%. On the flip side, Hero MotoCorp down by 3.76%, Sun Pharma down by 2.60%, Cipla down by 2.14%, Larsen & Toubro down by 2.00% and Dr. Reddys Lab down by 1.92% were the top losers.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.93% and PSU up by 0.09% while, Realty down by 2.30%, Capital Goods down by 1.56%, Healthcare down by 1.49% Consumer Durables down by 0.92% and IT down by 0.91% were the losing indices on BSE.

Meanwhile, with an intention to help distressed cane farmers and mills that are reeling under the effect of low domestic and international prices, Union Food Minister Ram Vilas Paswan plans to seek an increase in import duty on sugar to 40% from 25% earlier. A hike in the import duty will make imports uneconomical for sugar refiners despite a plunge in global prices.

According to the Food and Agriculture Organization (FAO) of the United Nations (UN), global sugar price index averaged 187.9 points in March, a sharp decline of 9.2% from February and the lowest since February 2009.

In August last year, import duty on both raw and refined sugar was raised to 25 per cent from 15 per cent to bail out the cash-starved sugar industry. However, without the increase there has been negligible import of sugar.

The Union Food Minister also underscored that his ministry was looking into various measures to lift the beleaguered industry from the doldrums, which could help farmers' and millers' issues. However, the industry also feels that the government should create a strategic stockpile of sugar immediately. The industry body, Indian Sugar Mills Association (ISMA) wants the government to create a buffer stock of sugar of 2.5 million tonne, just like China has done, which will ensure that farmers get prices and it gives the industry the liquidity to pay farmers.

The CNX Nifty touched a high and low of 8,760.00 and 8,645.65 respectively.

The top gainers on Nifty were Cairn India up by 4.06%, ONGC up by 3.37%, Idea Cellular up by 2.39%, Mahindra & Mahindra up by 1.33% and Hindalco Industries up by 1.22%. On the flip side, Hero MotoCorp down by 3.75%, ACC down by 3.69%, UltraTech Cement down by 3.40%, Ambuja Cements down by 3.08% and Punjab National Bank down by 2.94% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 1.36%, France's CAC was down by 0.55% and UK's FTSE 100 was down by 0.42%.

The Asian markets made mostly a positive close on Thursday following global upmove in equities. A surge in crude oil supported commodity stocks leading to rally in the equity markets. Traders also took comfort with Australia reporting that 37,700 jobs were added month-on-month in March, more than double the 15,000 expected. Chinese market surged over two and half a percent to hit fresh seven-year highs, after a report that foreign direct investment (FDI) in China rose 2.2 percent on the year in March, while outbound flows posted a milder rise, as foreign corporate investors remain undeterred by weakening domestic economic performance. Foreign direct investment into China rose 11.3 percent year-on-year to $34.88 billion in the first quarter. Outbound investment for the first three months of the year combined rose 29.6 percent from the same period in 2014 to $25.79. While, Chinese and Hong Kong shares continued their upward momentum, Japanese shares ended on a flat note with a positive bias.