Post Session: Quick Review

The gloom of the Indian markets extended to the new week with bulls still looking for cover amid sluggish global cues, markets after a modestly positive start slipped in red and kept grinding lower, although the fall was not sharp but the benchmarks kept losing ground gradually, not only the bluechips but the broader markets too lost considerably for the day. There was some sign of recovery in the final hours but profit booking emerged at high points and dragged the markets lower for yet another day. By the end both the major indices lost around a percent, with Nifty cracking below the 8040 level, its lowest closing levels of 2015. Traders were a bit concerned with Assocham’s  latest assessment that in the face of slow global demand for merchandise, India’s exports in the current financial year are likely to stay flat or may even move backward of $ 310 billion, the figure achieved in 2014-15.

The global cues remained sluggish and that too impacted the movement of the domestic market. Most of the Asian markets ended in red, moving towards their longest slump since 1990. Though, the Chinese market ended at its multi-year high on stimulus hopes after nation’s exports fell 2.8 percent from a year earlier in yuan value. On the same time the European markets too made a soft start with German stocks coming into a correction mood amid an increased focus over Greece.

Back home, the markets could not get any respite even with the start of the new week and the somberness continued lacking any supportive cues. Traders looked cautious ahead of some of the key macro data scheduled to be announced later in the week, while the Reserve Bank of India (RBI) is scheduled to announce current account deficit (CAD) data for the fourth quarter of 2014-15 after the market hours. Traders even overlooked the government’s latest initiative to further ease doing business in the country by relaxing norms pertaining to related party transactions, accepting deposits and appointing auditors in private companies. The corporate affairs ministry has issued four separate notifications relaxing the norms for the four categories of companies under the Companies Act, 2013. The notifications have introduced as many as 16 changes or clarifications related to private companies and around 30 for government companies. Back on street, none of the sectoral indices found any favour and ended in red, led by consumer durables, metals, FMCG and oil & gas. There were lots of scrip specific movements that kept the markets buzzing, Sun TV crashed nearly 28% per cent to a 52-week low on reports that home ministry declined to give the company a security clearance, raised concerns that Sun TV may have to take its 33 channels off air, as broadcasters need security clearance every 10 years in order to continue their operations. On the other hand, shares of beleaguered aviation company SpiceJet rose over 8 per cent on reports that its chairman and main promoter Ajay Singh will invest more money in the airline for fleet expansion.

The BSE Sensex ended at 26479.32, down by 289.17 points or 1.08% after trading in a range of 26479.30 and 26827.06. There were just 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices were trading in red; the BSE Mid cap index was down by 1.64%, while Small cap index slumped by 1.48%. (Provisional)

There were no gainers on the sectoral front while the top losing sectoral indices on the BSE were Consumer Durables down by 2.12%, Metal down by 1.84%, FMCG down by 1.81%, Oil & Gas down by 1.68%, PSU down by 1.22%.(Provisional)

The top gainers on the Sensex were Tata Power up by 1.06%, Bajaj Auto up by 0.80%, Axis Bank up by 0.51%, Mahindra & Mahindra up by 0.08% and TCS up by 0.06%. On the flip side, Vedanta down by 3.17%, Tata Steel down by 2.86%, Sun Pharma Inds. down by 2.66%, Hindustan Unilever down by 2.44% and Reliance Industries down by 2.40% were the top losers. (Provisional)

Meanwhile, government moving a step further in its strategy to make it easier to do business in the country, has relaxed norms pertaining to related party transactions, accepting deposits and appointing auditors in private companies. The corporate affairs ministry has issued four separate notifications relaxing the norms for the four categories of companies under the Companies Act, 2013. The notifications have introduced as many as 16 changes or clarifications related to private companies and around 30 for government companies.

The ministry has said that Section 188 of the Act, which requires a company to get consent from its Board of directors before entering into a related-party transaction even for activities such as sale, purchase or supply of any goods or materials and leasing of property and which deals with related party transactions, would not be applicable to private companies.

The corporate affairs ministry, regarding to rules for accepting deposits, has said that it would not be applicable on a private entity which accepts from its members’ monies not exceeding 100 per cent of aggregate of the paid-up share capital and free reserves. While, with respect to government companies, the ministry has made close to 30 changes related to various requirements. These pertain to Board evaluation, appointment of directors and conduct of annual general meetings (AGMs).

The government has also eased various norms for government-owned companies, nidhi and not-for-profit companies covered under Section 8 of the Companies Act which have been set up with the aim of cultivating thrift and savings habit amongst its members.

The CNX Nifty ended at 8037.15, down by 77.55 points or 0.96% after trading in a range of 8030.55 and 8131.00. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Power up by 1.42%, NMDC up by 1.21%, Bajaj Auto up by 1.07%, Ultratech Cement up by 0.85% and Axis Bank up by 0.79%. On the flip side, PNB down by 3.79%, Cairn India down by 3.66%, Bank Of Baroda down by 3.59%, Bosch down by 3.54% and Tata Steel down by 3.02% were the top losers. (Provisional)

European Markets were showing a mixed trend, UK’s FTSE 100 increased by 2.26 points or 0.03% to 6,806.86, while the Germany’s DAX lost 51.93 points or 0.46% to 11,145.22 and France’s CAC was lower by 24.02 points or 0.49% to 4,896.72.

Asian markets closed mostly in red on Monday, while Shanghai Composite clinched fresh seven-year peaks after more weak Chinese trade figures fuelled expectations of fresh stimulus measures. China’s exports in May fell less than expected but a double-digit drop in imports will likely keep the pressure on Beijing for more stimulus to avert a sharper economic slowdown. China’s exporters have been struggling to cope with weak overseas demand, rising labor and currency costs, exacerbating downward pressure on the world’s second-largest economy. Exports in May fell 2.5% from a year earlier and imports slid 17.6%. That, left the country with a near record trade surplus of $59.49 billion for the month. Japan’s economy expanded at an annualized pace of 3.9% in the first three months of this year, revised up from an initial estimate of 2.4% growth. On a quarter-on-quarter basis, gross domestic product rose a revised 1% in January-March, compared with a preliminary reading of a 0.6% increase. Japan’s Bank Lending remained unchanged at a seasonally adjusted annual rate of 2.6%, compared to the preceding quarter. Japan’s Economy Watchers Current Index fell to a seasonally adjusted 53.3, from 53.6 in the preceding month. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 5.42B, from 4.76B in the preceding month.