Benchmarks snap eight days winning streak

Wednesday turned out to be disappointing session for the Indian equity indices which got pounded by one third of a percent. Final hour of trade proved to be the curse for the markets and bourses settled below their crucial 27,800 (Sensex) and 8,400 (Nifty) bastions. Markets though traded with traction for most part of the trade, as investors indulged in enlarging positions driven by positive domestic as well as global cues. Sentiments also remained up-beat on the back of above-normal monsoon which has reignited rate cut hopes. However, market turned lower in last leg of trade on reports that the new proposal presented by Greece to avoid debt default was not acceptable to the creditors. Further, investors turned cautious ahead of the June derivative contracts set to expire tomorrow.

However, losses remained capped as some support came in with Finance Minister Arun Jaitley’s statement that progress of monsoon in India has improved compared to the predictions, bettering prospects for agriculture and putting the economy on a stronger footing. Meanwhile, Securities and Exchange Board of India (SEBI) on Tuesday halved the time required between listing and closing of an initial public offering (IPO) to six days. The stock market regulator also eased the framework for start-ups to raise capital from the stock market.

On the global front, European markets after positive opening turned cautious and were trading mostly in red as investors focused on the unfolding negotiations surrounding Greece's debt problems. However, Asian Markets rallied on Wednesday led by Chinese markets which gained around two and a half percent after the country’s factory activity showed signs of stabilisation in June.

Back home, the weakness in Indian rupee too weighed on the sentiments, rupee was trading lower at 63.65 per dollar at the time of equity markets closing as compared to the previous close of 63.63 per dollar. Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 374.97 crore on yesterday, as per provisional data by the stock exchanges. Selling in metal counter too dampened the sentiments as traders booked profit after previous session’s gains. Stocks related to power space too ended lower despite Union Minister of State for Power and Coal (independent charge), Piyush Goyal saying that all the coal blocks in the country will become operational in the next couple of months. On the flip side, fast moving consumer durables space witnessed some buying on reports of above-normal monsoon. The non sectoral gauge of aviation was on high spirit on reports that the ministry of civil aviation is looking for possible ways to reduce the tax burden on the aviation industry.

NSE’s 50-share broadly followed index, Nifty declined by over twenty points to end below the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex shed over seventy points to end below its psychological 27,800 mark. Broader markets too struggled to get any traction and ended the session with a cut of around half a percent. The market breadth remained in favour of decliners, as there were 1,222 shares on the gaining side against 1,496 shares on the losing side while 134 shares remain unchanged.

Finally, the BSE Sensex declined by 74.70 points or 0.27% to 27729.67, while the CNX Nifty lost 20.70 points or 0.25% to 8360.85.

The BSE Sensex touched a high and a low 27948.24 and 27647.29, respectively. The BSE Mid cap index was down by 0.32%, while Small cap index lost 0.55%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.71% and FMCG up by 0.35%, while Metal down by 1.57%, Infrastructure down by 1.29%, Realty down by 0.93%, Oil & Gas down by 0.90% and PSU down by 0.90% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.06%, Hindustan Unilever up by 2.40%, Lupin up by 1.83%, Sun Pharma up by 1.54% and Wipro up by 1.34%. On the flip side, Hindalco down by 3.70%, Tata Steel down by 2.98%, Mahindra & Mahindra down by 2.27%, SBI down by 1.92% and NTPC down by 1.65% were the top losers.

Meanwhile, the finance Ministry has amended the Section 28 of the Customs Act, 1962, reducing the penalty in cases of customs duty fraud by 10 percent. Now the amount of penalty payable in cases involving fraud, collusion, willful mis-statement or suppression of facts with the intent to evade payment of duty, shall be fifteen percent instead of 25 percent.

Sections 112 and 114 of the Customs Act which, respectively provide for penalty for improper import and export of goods, too have been amended by insertion of new clauses to provide for a penalty of up to 10 percent of the duty sought to be evaded or Rs 5,000, whichever is higher. Now there will be a penalty not exceeding ten percent of the duty sought to be evaded or Rs 5,000, whichever is higher, for improper export and import of goods.

The Ministry has also rationalised imposition of penalty on central excise duty and service tax evasions by fraud and other means. In case of any willful evasion of central excise duty, a penalty equal to the duty evasion will be payable. Similarly, the penalty will be hundred percent of Service Tax amount involved in such cases. A reduced penalty equal to 15 percent of the Service Tax amount is to be paid if Service Tax, interest and reduced penalty is paid within 30 days of service of notice in this regard, the Act said.

The CNX Nifty touched a high and low 8,421.35 and 8,338.90 respectively.

The top gainers on Nifty were BHEL up by 3.77%, Zee Entertainment up by 3.31%, Lupin up by 1.94%, Hindustan Unilever up by 1.75% and Sun Pharma up by 1.55%. On the flip side, Hindalco down by 3.82%,   PNB down by 3.77%, Bank of Baroda down by 3.36%, Tata Steel down by 3.08% and Mahindra & Mahindra down by 3.00% were the top losers.

European Markets were trading mostly in the red; Germany’s DAX was down by 0.80% and France's CAC was down by 0.48%. However, UK's FTSE was up by 0.29%.

Asian markets closed in green on Wednesday, as investors waited for some positive resolution on Greece’s debt crisis. The bailout deal is however in doubt as Greece Prime Minister Tsipras informed that measures were not accepted by creditors. Indonesia’s central bank, hoping to spur economic growth reduced the minimum down-payments consumers have to pay for cars and motorcycles while increasing the percentage of a home price that a buyer can borrow. A new regulation loosening rules for automotive and mortgage lending took effect on June 18. The benefits of the Bank of Japan’s aggressive easing are being outweighed by side effects, one board member stated in the minutes of the May meeting released. Board member Takahide Kiuchi in particular has dissented at recent board meetings and called for a cut in outright annual government bond purchases to 45 trillion yen from 80 trillion yen now. At the May meeting, the board decided by an 8 to 1 vote to leave the bank’s policy target unchanged while revising up its economic assessment slightly and warning about the downside risk from Europe’s low growth and inflation. In the minutes, there was also concern raised about a slowdown in China and whether inflation expectations overall would rise. At the same time Japan released May service producer prices, which rose 0.6% year-on-year, down slightly from 0.7% gain in April. Japan’s corporate services price index fell to a seasonally adjusted annual rate of 0.6%, from 0.7% in the preceding month. Taiwanese Industrial Production fell to a seasonally adjusted annual rate of -3.18%, from 1.06% in the preceding month.