Post Session: Quick Review

Local equity markets snapping two consecutive sessions’ gaining streak concluded lower with losses of over one tenth of a percent that dragged both Sensex and Nifty below crucial 27,700 and 8,400 levels respectively, on last hour profit-booking activities by market-participants. In the volatile session of trade, benchmarks after breaking out into positive territory in the afternoon deals again succumbed to selling pressure to end the otherwise upbeat session of trade on a negative note. Forecast of timely monsoon coupled with the government containing the fiscal deficit at 4.00% of the GDP for 2014-15 boosted the market sentiment. Further, rate cut hopes by RBI at its upcoming monetary policy review on June 2, aided the sentiment in early deals. However, profit-booking at higher levels dragged the local equity markets. However, positive global set-up to some extent limited further losses at local equity markets. Meanwhile, broader indices ended mixed, while Midcap index ended lower with losses in line with larger counterparts, Smallcap index went home with gains of around three tenth of a percent.

On the global front, Asian shares concluded mostly higher after Wall Street hit a new high as investors looked ahead to US inflation data and also after Greek’s finance minister said on Monday that it was close to a deal with its lenders that would help it meet debt repayments next month. US data due out Friday are expected to show prices contracted by 0.2%, adding to last month's 0.1 percent fall. Meanwhile, European shares rose back to near multi-year high on Tuesday after European Central Bank (ECB) policymakers said that the ECB would front-load on asset purchase scheme aimed at boosting growth in the region.

Closer home, most of the sectoral indices on BSE concluded into positive territory, stocks from Information Technology, Consumer Durables and Realty counters were the prominent gainers of the session. On the flip side, much of the drubbing was witnessed by stocks from Auto, Oil & Gas and Public Sector Undertaking counters. Meanwhile, power generation and distribution companies, which were up after India Meteorological Department and POSOCO signed MoU to increase the efficiency of power sector  to make them weather proof, too edged lower by close of trade. Banking shares also took a hit for the worst after Indian rating warned that bad loans of Indian banks were seen rising to their highest levels in nearly 14 years. The ratings agency further said that it estimates total impaired loans at 13% (of overall loan book) for FY16. 4.9% of this would be gross non-performing loans and the rest would be restructured loans, etc. The overall market breadth on BSE was in the favour of advances which thumped decliners in the ratio of 1664:1055; while 125 shares remained unchanged.

The BSE Sensex concluded at 27645.53, down by 41.77 points or 0.15% after trading in a range of 27574.07 and 27872.23. 12 stocks advanced against 18 declining ones on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.15%, while Small cap index up by 0.36%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 0.73%, TECK up by 0.73%, Consumer Durables up by 0.54%, Realty up by 0.47% and Metal up by 0.43% while, Auto down by 0.77%, Oil & Gas down by 0.45%, PSU down by 0.40%, FMCG down by 0.22% and Bankex down by 0.17% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 2.27%, Wipro up by 1.65%, Vedanta up by 1.44%, Infosys up by 1.22% and Tata Power up by 1.20%. On the flip side, Tata Motors down by 2.10%, HDFC down by 2.04%, ONGC down by 1.77%, Bajaj Auto down by 1.26% and Axis Bank down by 1.06% were the top losers. (Provisional)

Meanwhile, the Commerce Ministry will take up 22 proposals of special economic zone (SEZ) developers that have approached it to surrender their tax free zones. Of 22 SEZs, 19 are from IT/ITeS sector, while other sectors include multi-product, engineering, hardware and software. Besides, the board would also take decision on the applications of 27 special economic zone developers that have sought more time to execute their projects. The  board of Approval (BoA) would also consider the proposal of Infosys Ltd to set up a new IT/ITeS zone in Karnataka.

The decisions on surrender and time extension will be taken by the BoA chaired by Commerce Secretary Rajeev Kher. About the developers wanting to surrender their projects, the BoA has stated that a formal approval has been granted by the DoC (Department of Commerce). However, since there is no significant progress made by the Developer/co-developer, the concerned DC (development commissioner) has proposed for cancellation of formal approval granted to the developer. SEZs started losing sheen after the imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT). Industry has sought a reduction or removal of these taxes to boost investments.

The 22 developers who have approached to surrender their SEZ include Tamilnadu Industrial Development Corporation and Sunwise Properties, Raaga Mayuri Builders, Township Developers India, Progressive Buildestate, GHI Finlease and Investment, Mikado Realtors, Uppal Housing, Sarv-Mangal Real Tech and Mohan Investment and Properties. While those who had asked for more time include Gulf Oil Corporation, Vedanta Aluminium, Kandla Port Trust and Indiabulls Industrial Infrastructure.

India VIX, a gauge for markets short term expectation of volatility rose 1.85% at 18.23 from its previous close of 17.90 on Monday. (Provisional)

The CNX Nifty settled at 8365.65, down by 8.00 points or 0.10% after trading in a range of 8335.00 and 8427.80. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 2.46%, Hero MotoCorp up by 2.39%, Vedanta up by 1.85%, Wipro up by 1.53% and Infosys up by 1.47%. On the flip side, Tata Motors down by 2.09%, HDFC down by 1.88%, ONGC down by 1.29%, Cairn India down by 1.20% and BPCL down by 1.07% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX gained 1.68%, France's CAC rose 1.72% and UK's FTSE was up by 0.31%.

The Asian markets closed mostly in green on Tuesday, following another record close in US markets. Chinese policymakers announced guidelines for reform priorities in 2015, ranging from streamlining administrative procedures to boosting the yuan’s global role, as Beijing steps up efforts to open up the country's capital markets. The Bank of Japan is expected to expand its already-massive stimulus programme in October, even though Governor Haruhiko Kuroda has repeatedly stated that there is no need to do so. In April 2013 the BOJ pledged to achieve 2 percent inflation in about two years, after decades of deflation or very small price rises, unleashing a multi-trillion yen asset purchase programme. The central bank revised its goal last month and now expects inflation to reach 2 percent by April-September 2016. Japan’s Core Machinery Orders rose to 2.9%, from -0.4% in the preceding month. Hong Kong unemployment rate was 3.2% for the three months ended April 2015, down from 3.3% recorded between January and March. The underemployment rate also dropped to 1.3% in February-April from 1.4% in January-March. Total employment fell 8,800 to 3.792 million in the period. The labor force also shrank from 3.928 million to 3.919 million.