Benchmarks resume southward journey after a day of halt

Resuming their southward journey, Indian equity benchmarks ended the Thursday’s trade with a cut of over half a percent. After a positive start, markets entered into red terrain and traded choppy throughout the session as sentiment remained cautious. Corporate earnings continued to miss estimates, while a forecast for poor rains ahead of the June-to-September monsoon season raised concerns of drought. Though, key gauges attempted recovery in late trade but it proved short-lived and markets ended the session below their crucial 27,750 (Sensex) and 8,400 (Nifty) levels. Sentiments remained dampened on report that foreign institutional investors sold Indian shares worth Rs 910 crore ($144.08 million) on Wednesday, provisional exchange data showed.

Investors failed to draw any sense of relief with Finance Minister Arun Jaitley’s statement that the government will move the GST Constitution Amendment Bill in Parliament within a couple of days. Traders also shrugged off the industry body CII’s statement that the Land Bill introduced in Parliament will create millions of jobs, meet the aspirations of farmers, and help spur growth in the economy. Meanwhile, rating agency Moody’s said emerging economies in the Asia-Pacific region, including India, have a high degree of immunity to external shocks, but will face challenges when the US Federal Reserve begins raising interest rates.

Weak opening in European markets too dampened the sentiments. Germany's DAX and France's CAC traded with a cut of around half a percent after sluggish euro zone and German purchasing manager data followed another dire set of numbers from France. However, Asian markets ended mostly in the green despite the preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics showed that Chinese manufacturing gauge fell to a 12-month low in April to 49.2.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 63.24 per dollar at the time of equity markets closing compared with its previous close of 62.82. Select IT shares remained under pressure for the seventh straight session over concerns about quarterly earnings. On the flip side, metal stocks remained on buyers’ radar amid bets that Chinese policymakers will act to shore up growth in the world’s second-largest economy.  Moreover, one of the brokerage firms has said the Metal sector’s return on equity will double by FY17 end. 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.

The NSE’s 50-share broadly followed index Nifty declined by over thirty points to end below the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and fifty points to end below its crucial 27,750 mark. Broader markets struggled to any traction and ended the session mixed. The market breadth remained in favor of decliners, as there were 1,377 shares on the gaining side against 1,434 shares on the losing side while 96 shares remain unchanged.

Finally, the BSE Sensex declined by 155.11 points or 0.56% to 27,735.02, while the CNX Nifty lost 31.40 points or 0.37% to 8398.30.

The BSE Sensex touched a high and a low of 28087.78 and 27621.18, respectively. The BSE Mid cap index was up by 0.58%, while Small cap index down by 0.16%.

The top gainers on the Sensex were Tata Steel up by 5.00%, Coal India up by 1.45%, Maruti Suzuki up by 0.92%, BHEL up by 0.91% and Cipla up by 0.87%. On the flip side, Sun Pharma down by 2.55%, SBI down by 2.41%, Tata Motors down by 2.24%, NTPC down by 2.10% and Wipro down by 1.76% were the top losers.

The few 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.

Meanwhile, with an aim of introducing the nationwide goods and services tax (GST) by April 2016, the government will move the Constitution Amendment Bill in Parliament in the current session of Parliament even as the issue of compensation and revenue loss to manufacturing states, lacked consensus.

However, Finance Minister Arun Jaitley after a meeting with ministers of 18 states, underscored that the government will send a notice to Lok Sabha to soon take the bill for consideration even as Tamil Nadu struck a discordant note.  Further, Jaitley also expressed optimism in April 1, 2016 target and underscored that a constitutional amendment was required to facilitate GST as states currently do not have powers to tax services, while the Centre cannot levy sales tax.

The crucial GST, which is expected to add 1-2% to the GDP by creating a national market for goods and removing distortions caused by multiple indirect taxes levied by the Centre, states and local bodies, was earlier supposed to be rolled out from April 1, 2010 but has been delayed due to resistance on the part of many states that feared a loss of revenue.

The CNX Nifty touched a high and low of 8504.95 and 8361.85 respectively.

The top gainers on Nifty were Yes Bank up by 6.98%, Tata Steel up by 5.25%, Zee Entertainment up by 1.73%, HCL Tech up by 1.68% and BHEL up by 1.56%. On the flip side, Tech Mahindra down by 2.82%, Sun Pharma down by 2.76%, ACC down by 2.59%, Cairn India down by 2.56% and Ambuja Cement down by 2.46% were the top losers.

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.