Benchmarks end lower on penultimate day of F&O expiry

Resuming their southward journey, Indian equity benchmarks ended the Wednesday’s trade with a cut of over half a percent as investors opted to remain on sidelines on penultimate day of F&O expiry. Key gauges traded in red terrain for most part of the day’s trade, though attempted recovery in afternoon deals but the recovery proved short-lived and markets ended the session below their crucial 27,250 (Sensex) and 8,250 (Nifty) levels.

Continued selling by foreign portfolio investors amid fresh worries on retrospective taxes, and a delay in earnings recovery mainly dragged the markets lower. Sentiments also took a hit after Prime Minister Narendra Modi had to delay a bill that would make farm land acquisition easier, following anger over rising rural distress and the suicide of a farmer in India’s capital Meanwhile, Chief Economic Adviser Arvind Subramanian has said that India is ‘a very frustratingly robust democracy’ where unleashing “big bang” reforms is not easy given the multiple centers of veto power

On the global front, European counters have made a cautious start as investors remained concern on the back of mixed corporate results from bank BBVA and UK retailer Next among others. Asian markets ended mostly in the red ahead of US growth data and the outcome of the Federal Reserve meeting. The US central bank will wrap up its two-day policy meeting later in the day and is expected to indicate whether it is on track to raise interest rates.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 63.34 per dollar at the time of equity markets closing compared with its previous close of 63.16. Selling in FMCG stocks too weighed down sentiments as weak monsoon forecast is likely to hit rural volumes. On the flip side, stocks related to realty space remained on buyers’ radar after the Cabinet extended time by two years for completion of projects sanctioned till March 2012, under BSUP & IHSDP components of the JNNURM.

Meanwhile, banking shares ended higher after private sector lender Axis Bank reported an 18% growth in its net profit for the quarter ended March 31, 2015, led by strong growth in its interest income. The bank reported a net profit of Rs 2,181 crore for the January-March quarter against Rs 1,842 crore in the same quarter of the previous fiscal. Additionally, sugar stocks edged higher after the Union Cabinet gave its approval to increase import duty on sugar from 25% to 40%.

The NSE’s 50-share broadly followed index Nifty declined by over forty points to end below the psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and seventy points to end below its crucial 27,250 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,524 shares on the gaining side against 1,182 shares on the losing side while 105 shares remain unchanged.

Finally, the BSE Sensex dropped by 170.45 points or 0.62% to 27225.93, while the CNX Nifty plunged by 45.85 points or 0.55% to 8,239.75.

The BSE Sensex touched a high and a low of 27438.96 and 27176.54, respectively. The BSE Mid cap index was up by 0.39%, while Small cap index up by 1.10%.

The top gainers on the Sensex were Axis Bank up by 3.30%, GAIL India up by 2.01%, Wipro up by 1.87%, Sun Pharma up by 1.61% and ICICI Bank up by 1.07%. On the flip side, Bharti Airtel down by 3.32%, ITC down by 2.76%, Sesa Sterlite down by 2.15%, HDFC down by 2.11% and Tata Motors down by 1.87% were the top losers.

The gaining sectoral indices on the BSE were Realty up by 0.92%, Consumer Durables up by 0.82%, Healthcare up by 0.57%, Bankex up by 0.45% and IT up by 0.43% while, FMCG down by 1.63%, Infrastructure down by 0.83%, Auto down by 0.57%, Oil & Gas down by 0.51% and Metal down by 0.40% were the losing indices on BSE.

Meanwhile, India has once again missed the power generation capacity addition target in last fiscal, making it the second straight year when the targets were not achieved. The Standing Committee on Energy in its report stated that the electricity generation stood at 15,935 MW (till February 2015), against the target of 17,830 MW in the fiscal 2014-15, similarly, during the 2013-14, 17,825 MW of power was produced against a target of 18,432 MW production. However, the country surpassed the capacity addition target in 2012-13. The target was 17,956.3 MW against which 20,622.8 MW was generated. A lion’s share of 20,121.8 MW was contributed by thermal power plants.

Ministry of Power pointing to the reasons of under achievement the target said the major difficulties faced in the capacity addition programme were delays in land acquisition, poor performance by civil contractors, delays in supplies by BHEL and contractual disputes, while the hydro power projects were delayed due to law and order problems, poor geology, flash floods and difficult terrain, delay in forest clearances, among others.

The Power Ministry has however said that as part of remedial measures, the Central Electricity Authority (CEA) is monitoring power projects through frequent site visits and critical study of monthly progress reports and the Ministry is also conducting periodic review of the issues related to supply of power equipment from BHEL.

The central government is also coordinating with the state governments on the progress of projects in their respective states. The capacity addition target for the 12th plan period (2012-17) is estimated at 88,537 MW comprising 26,182 MW in the central sector, 15,530 MW in the state sector and 46,825 MW in the private sector respectively.

The CNX Nifty touched a high and low of 8,308.20 and 8,219.20 respectively.

The top gainers on Nifty were Axis Bank up by 4.40%, Ambuja Cements up by 3.64%, HCL Technologies up by 1.90%, Wipro up by 1.78% and Sun Pharmaceuticals Industries up by 1.62%. On the flip side, Idea Cellular down by 6.39%, Bharti Airtel down by 3.86%, ITC down by 3.01%, HDFC down by 2.49% and ACC down by 2.27% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 0.16%, France's CAC down by 0.27% and UK's FTSE 100 was down by 0.11%.

The Asian markets closed mostly in red on Wednesday, while Shanghai Composite closed marginally in green. Japanese stock exchange is closed today on account of ‘Showa Day’ holiday. China will reduce import tariffs on some consumer goods by the end of June to help boost domestic spending and support the economy. The State Council, China’s Cabinet, stated that the decision was made in order to satisfy rising consumer demand but did not specify which consumer goods would benefit from reduced tariffs. The move comes as annual economic growth in the world's second biggest economy slowed to a six-year low of 7 percent in the first quarter, hurt by a housing slump and a downturn in investment and manufacturing. The outstanding amount of China’s dollar-denominated Qualified Foreign Institutional Investor (QFII) programme rose to $73.6 billion as of April 28, slightly higher than $72.1 billion in March. The QFII scheme was created years ago by China to allow foreigners to invest in Chinese capital markets. Hong Kong Trade Balance fell to a seasonally adjusted -46.2B, from -35.9B in the preceding month.