Post Session: Quick Review

Local equity markets lost steam for the sixth session in seven on Thursday, dragged down by blue-chips as investors chose to pause despite clarifications from the Finance Ministry over the Government's taxation policies. Senior Finance Ministry officials in an effort to calm a tax row on Wednesday, promised foreign investors a favorable environment, but stopped short of scrapping unpopular plans to claim retrospective payments. By close of trade, both Sensex and Nifty losing over half a percent ended below psychologically crucial 27,750 and 8,400 levels respectively. However, the session was fruitful for broader indices, which went home with gains of around 0.15-0.65%.

Sentiment remained cautious as corporate earnings continued to miss estimates, while a forecast for poor rains ahead of the June-to-September monsoon season raised concerns of drought. Raising the spectre of a second successive year of deficient rains, the India Meteorological Department has predicted below normal rainfall for the upcoming monsoon season with a 33% probability of rains being less than 90%, commonly referred to as a drought. Additionally, negative global set-up also pressurized the sentiment.

On the global front, the major Asian markets rose on Thursday, with Chinese and Japanese shares hitting fresh multi-year highs, as investors shrugged off weak manufacturing data out of China amid bets policymakers will act to shore up growth in the world's second-largest economy. An initial gauge of China's factory activity fell to a 12-month low in April, HSBC Holdings Plc said, underscoring deepening weakness in the economy. The PMI fell to 49.2 in the flash reading, down from 49.6 in March.

Closer home, most of the sectoral indices on BSE concluded into negative territory, nevertheless worst performers were the stocks from Capital Goods, Healthcare and Realty counters. On the flip side, stocks from Metal, Consumer Durables and Fast Moving Consumer Goods counters were the prominent gainers of the session.

On the earnings front, HDFC Bank declined after reporting Q4 results. HDFC Bank’s net profit rose 20.6 percent to Rs 2807 crore in the quarter ended March 2015 as compared to Rs 2326. 52 crore on Year-On-Year (Y-o-Y) basis. During the quarter, its net interest income was up 21.4 percent at Rs 6013 crore versus Rs 4952 crore on a yearly basis. The overall market breadth on BSE was in the favour of decliners which thumped advances in the ratio of 1371:1440; while 96 shares remained unchanged.

The BSE Sensex concluded at 27735.02, down by 155.11 points or 0.56% after trading in a range of 27621.18 and 28087.78. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.58%, while Small cap index down by 0.16%. (Provisional)

The gaining sectoral indices on the BSE were Metal up by 1.56%, Consumer Durables up by 1.25% and FMCG up by 0.04% while, Capital Goods down by 0.89%, Healthcare down by 0.86%, Realty down by 0.85%, Auto down by 0.67% and Power down by 0.65% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.98%, BHEL up by 1.30%, Coal India up by 1.28%, Maruti Suzuki up by 1.07% and Cipla up by 0.33%. On the flip side, Sun Pharma down by 2.78%, SBI down by 2.50%, Tata Motors down by 2.35%, NTPC down by 2.33% and Wipro down by 1.85% were the top losers. (Provisional)

Meanwhile, Watering down the government's ambitious exports growth target, exporters' body Federation of Indian Export Organisations (FIEO) has said that India's exports in the current fiscal will fall further and are unlikely to touch even the $300-billion mark on account of decline in the container volumes at ports and poor order book position.

FIEO has said that what is worrying now is the volume which is going down. For a few ports the volumes are down by 26 percent, so overall a double digit decline is expected in volume. The decline in volume means value-wise export may suffer more decline. Adding further, FIEO said that in order to reverse the declining trend of India's exports, the government needs to step out to help exports community in terms of some direct tax benefits.

President of FIEO, S C Ralhan said that the Exporters should be incentivised through tax benefits to invest in manufacturing. Any investment in plant and machinery for expansion or modernization should be made eligible for tax deduction at 100 percent. Textile Upgradation Fund Scheme (TUFS) for textiles may be extended to engineering and other sectors of exports.

India has set a target of $340 billion for 2014-15, when country's exports in 2014-15 fiscal stood at $ 310.5 billion, down 1.2% from $314.4 billion the year before, mainly due to slowdown in global growth. In terms of the country's export destinations, the slowdown was more visible in Asian nations such as China (minus 19%) and Singapore (minus 20%), while exports to the US and the UAE were stronger. While value-wise exports have declined, volume-wise exports picked up in certain sectors. With the Indian rupee strengthening in real effective terms.

India VIX, a gauge for markets short term expectation of volatility surged 7.49% at 18.50 from its previous close of 17.21 on Wednesday. (Provisional)

The CNX Nifty settled at 8398.30, down by 31.40 points or 0.37% after trading in a range of 8361.85 and 8504.95. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 6.94%, Tata Steel up by 5.15%, HCL Tech. up by 2.02%, Zee Entertainment up by 1.87% and Indusind Bank up by 1.48%. On the flip side, Sun Pharma down by 2.67%, ACC down by 2.49%, Tech Mahindra down by 2.32%, Ultratech Cement down by 2.31% and Cairn India down by 2.29% were the top losers (Provisional)

Most of the European Markets were trading in the red; Germany's DAX lost 0.53% and France's CAC was down by 0.49% while, UK's FTSE 100 was up by 0.34%.

The Asian markets made mostly a positive close on Thursday with the Shanghai Composite Index closing at the highest level since 2008 after volatile trading, despite the preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics showing that Chinese manufacturing gauge fell to a 12-month low in April to 49.2. Investors shrugged off weak manufacturing data amid bets policymakers will act to shore up growth in the world's second-largest economy. Japanese shares too hit a fresh 15-year high in early trade before ending with modest gains on optimism over corporate earnings. However, the manufacturing sector in Japan swung to contraction in April as new orders continued to fall and manufacturing production fell for the first time since July 2014. In other markets in the region, while the Hang Seng and KLSE Composite ended in red, Taiwan and Seoul Composite posted gains of over a percent each.