Post Session: Quick Review

Local equity markets concluded lower on the back of profit-booking on Tuesday after previous sessions’ sharp up-run and also as market-participants kept on the sidelines, closely watching out for smooth passage of GST bill, which was tabled in parliament for consideration.  The decline in domestic oriented stocks were partially also on worries that the remaining January-March quarterly earnings may not meet market expectations. Notably, January-March would mark the fourth straight quarter of disappointing results with low signs of on-the-ground revival in the economy since the election of Narendra Modi as Indian Prime Minister in May 2014.  In the choppy session of trade, benchmarks after trading in a tight range for first part of the session witnessed sharp selling pressure in the second half which dragged them to-day’s low point by close of trade. Both Sensex and Nifty taking a knock of over two tenth of a percent settled below crucial 27,500 and 8,350 levels respectively. However, the session turned out to be fruitful for broader indices, which went home with gains in the range of 0.10-0.60%.

On the global front,   Asian markets closed mostly in red on Tuesday amid reports that domestic stockbrokers are pulling back from lending clients’ money to buy shares, as regulators become increasingly concerned about the fierce nature of a recent stock-market rally. Meanwhile, European markets opened firmer on Tuesday after an extended weekend break, bucking fears of slowing demand from China and despite debt stand-off fears depressing Greek stocks.

Closer home, sectoral indices on BSE ended mixed, while stocks from Metal, Oil & Gas and Realty counters were the prominent gainers of the session, stocks from Power, Consumer Durables and Infrastructure counters were the notable losers of the session. Realty stocks too concluded higher after government decided to consult all parties on the real estate bill, and would consider a demand by some Rajya Sabha members to send it to a selct committee. On the flip side, prominent losers were the stocks from Power, Infrastructure and banking counters.  In stock-specific activity, shares of metal companies such as Hindustan Zinc, Sesa Sterlite, Tata Steel, JSW Steel, Hindalco, NMDC, SAIL and Jindal Steel surged after iron ore prices in international market jumped. Meanwhile, Railway stocks traded mostly positive after reports suggested that Railways have initiated the process for setting up a regulatory body on the lines of telecom and power sector. The overall market breadth on BSE was evenly divided in the ratio of 1377:1375; while 109 shares remained unchanged.

The BSE Sensex concluded at 27440.14, down by 50.45 points or 0.18% after trading in a range of 27338.23 and 27603.71. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.60%, while Small cap index up by 0.08%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.86%, Oil & Gas up by 0.95%, Realty up by 0.93%, Healthcare up by 0.53% and PSU up by 0.39% while, Power down by 0.84%, Consumer Durables down by 0.60%, INFRA down by 0.42%, TECK down by 0.25% and Bankex down by 0.17% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 6.64%, Tata Steel up by 4.95%, Hindalco up by 4.65%, ONGC up by 4.35% and Hindustan Unilever up by 2.19%. On the flip side, Mahindra & Mahindra down by 2.27%, HDFC down by 1.88%, SBI down by 1.86%, Coal India down by 1.77% and Cipla down by 1.71% were the top losers. (Provisional)

Meanwhile, in order to trade off the balance between private and public, Railways has initiated the process for setting up a regulatory body on the lines of telecom and power sector. Further, Railways Minister, Suresh Prabhu in this relation has requested the NITI Aayog Chairman to prepare the roadmap for the same. Once the model has been prepared, the same would be put on website for wider discussions.

The sector plans to establish a regulatory mechanism so that private participation does not compromise public interest and does not hamper public function. It is also to ensure security of investment from private players.

The minister unveiled that his ministry would be offering projects relating to capacity augmentation, betterment of passenger amenities and high speed service among others for private participation.

However, the minister notwithstanding the recommendation by government panels recently outrightly ruled out privatization of the public transporter and asserted that Railways would continue to be owned and managed by government of India.

Prabhu's remarks came in the backdrop of raging debate on the privatization of railways with the government-appointed committee headed by economist Bibek Debroy recommending corporatization of the loss-making public transporter and suggesting that the ministry of railways be only responsible for policymaking, with private players being permitted to run passengers and freight operations.

India VIX, a gauge for markets short term expectation of volatility rose 0.46% at 17.38 from its previous close of17.31 on Monday. (Provisional)

The CNX Nifty settled at 8320.70, down by 11.25 points or 0.14% after trading in a range of 8280.60 and 8355.65. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 6.40%, Vedanta up by 6.12%, NMDC up by 5.12%, Tata Steel up by 5.03% and Hindalco up by 4.51%. On the flip side, Cairn India down by 2.35%, Mahindra & Mahindra down by 2.15%, HDFC down by 1.96%, Cipla down by 1.72% and SBI down by 1.68% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX rose 0.58%, France's CAC surged 0.48%, while UK’s FTSE was up by 55%.

The Asian markets closed mostly in red on Tuesday, with Chinese exchange making the biggest drop since January 19, and the seventh biggest fall over five years, amid reports that domestic stockbrokers are pulling back from lending clients money to buy shares, as regulators become increasingly concerned about the fierce nature of a recent stock-market rally. Japanese stock exchange was closed today on account of ‘Greenery Day’ holiday while South Korea exchange was closed on account of ‘Children’s Day’ holiday. The fierce rally on the Shanghai Composite is worrying domestic regulators, in part, because many investors’ gains have been achieved with leverage. The China Securities Regulatory Commission has issued several warnings about stock market risks. There were additional fears that liquidity will be sucked from the market by a spate of IPOs and the weakness spilled over into Hong Kong. Hong Kong Retail Sales fell to a seasonally adjusted annual rate of -2.9%, from 14.9% in the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.2%, from -0.1% in the preceding quarter while Taiwanese CPI fell to a seasonally adjusted annual rate of -0.13%, from 0.55% in the preceding quarter.

Indonesia’s economy grew at the slowest pace in more than five years in the first quarter, feeling the effects from weak exports and lower crude oil prices. Gross domestic product rose 4.71% in the January-March period from the same quarter in 2014. Growth slowed from 5.01% in the fourth quarter of last year and was the weakest since the 4.12% pace in the third quarter of 2009. On a quarter-on-quarter basis GDP rose 0.18%. Finance Minister Bambang Brodjonegoro stated that the country is introducing a tax amnesty this month to boost revenues as slowing economic growth puts pressure on the government to increase spending. The amnesty will last until the end of the year and allows citizens to avoid penalties if they pay five years of unpaid taxes.