Post Session: Quick Review

Indian markets suffered sharp sell-off on Wednesday and there was sea of red on the Dalal Street, with the ripple effects of Chinese rout spreading across global markets, even as Greece uncertainty continues to keep investors on tenter-hooks. The local markets remained under the weather from the very beginning and after losing ground in the very first hour the markets hardly got any chance to recover, though some support came in the late hours of trade after the Greek Prime Minister Alexis Tsipras pleaded in the European Parliament for a fair deal to keep his country in the euro zone. Some respite was also seen with Federal Reserve minutes meeting due later today, investors are betting that the twin crisis of Greece saga and Chinese equity markets rout could force the Federal Reserve to push back its proposed rate hike move. However, the domestic traders remained concerned about the corporate profit growth, with the first quarter earnings kick starting tomorrow with TCS numbers. The rating agency Crisil expects India Inc results for the quarter ended June 2015, to disappoint as soft commodity prices, weak growth in investment-linked sectors and subdued rural demand restrict earnings.

On the global front, though the US markets recovered overnight the Asian markets were butchered, led by Chinese Shanghai Composite Index which plunged by around 6 percent, as another round of government support measures failed to allay concern that a record unwinding of margin trades has further to go. European stocks were little changed near correction levels as the region’s leaders set a Sunday deadline for Greece to accept a rescue package. Meanwhile, reports emerged that Europe’s leaders are finally ready to show Alexis Tsipras the exit.

Back home, the triple digit rout dragged the markets below their crucial psychological levels of 28000 (Sensex) and 8400 (Nifty), it was after a long time that there was complete wash-out, with all the stocks on both the major benchmarks ending in red. Traders worried of further sell-off resorted to profit taking and were unable to get any support with report of Department of Industrial Policy & Promotion seeking help from the World Bank for its ambitious task of climbing into the top 30 of the World Bank's ease of doing business rankings in three years. Not only the blue-chips but the broader markets too were butchered and the midcap and small cap indices on the BSE ended lower by about one and half a percent. All the sectoral indices too ended in red, posting considerable losses, led by metal, auto, realty and banks. The sector which got hammered most was metals after commodities in global markets suffered their worst rout in seven months, as a steep selloff in China’s stock reflected broader economic weakness, even after the Chinese government announced new measures including allowing insurance companies to invest more assets in stocks and a scheme to buy the shares of smaller companies. Investors rushed out of commodity markets in response, cutting back holdings of energy, metals and grains. Domestic traders even ignored global rating agency Moody's report that Indian base metals industry is expected to grow by 8-10 percent annually over the next three years on the back of increased demand from power, construction and automotive sectors.

Among the biggest sufferer in metal space, Vedanta tumbled around 8 percent, Hindalco Industries was down by over 5 percent, Tata Steel by around 5 percent and Hindustan Zinc was down by around 2 percent.

The BSE Sensex ended at 27664.03, down by 507.66 points or 1.80% after trading in a range of 27635.72 and 28031.45. All the 30 stocks ended in red on the index.(Provisional)

The broader indices despite ending in red were in better position than the benchmarks; the BSE Mid cap index lost 1.39%, while Small cap index lost 1.38%..(Provisional)

The top losing sectoral indices on the BSE were Metal down by 3.92%, Auto down by 2.29%, Realty down by 1.88%, Bankex down by 1.80%, INFRA down by 1.76%..(Provisional)

The top losers on the Sensex were Vedanta down by 8.61%, Tata Motors down by 6.37%, Hindalco down by 5.22%, Tata Steel down by 5.03% and HDFC down by 3.75%..(Provisional)

Meanwhile, the Department of Industrial Policy & Promotion (DIPP) has sought help from the World Bank to achieve its ambitious task of climbing into the top 30 of the World Bank's ease of doing business rankings in three years.

An eight-member World Bank team met with central and state government officials to identify what India needs to do more and with timelines after interaction with the stakeholders and took stock of progress on reforms related to construction permits in Mumbai and New Delhi, getting an electricity connection and doing business. The government looked at global best practices in key areas that could be adopted in India, signaling that enforcing contracts is a key area of concern for India.

India was ranked 142nd out of 189 countries - below Sri Lanka and Pakistan- in the World Bank's ease of doing business rankings benchmarked to June 2014. The list is based on 10 parameters such as starting a business, dealing with construction permits, getting electricity, paying taxes, enforcing contracts and resolving insolvency. With the exception of two parameters (getting credit and protecting minority investors), India does not feature in the top 100 in the remaining parameters.

The Commerce and Industry Ministry had earlier initiated an extensive survey on 'ease of doing business' in states with an objective to improving the business climate of the country, with the DIPP circulating a set of 285 questions to all the states in this regard. The DIPP had also circulated a document with recommendations for states on aspects critical to enabling ease of doing business.

The CNX Nifty ended at 8352.65, down by 158.15 points or 1.86% after trading in a range of 8341.40 and 8457.50. All the 50 stocks ended in red on the index..(Provisional)

The top losers on Nifty were Vedanta down by 8.77%, Yes Bank down by 7.77%, Cairn India down by 6.57%, Tata Motors down by 6.31% and Tata Steel down by 5.43%.(Provisional)

European Markets were trading modestly in green, Germany’s DAX increased 22.45 points or 0.21% to 10,699.23, France’s CAC was higher by 25.38 points or 0.55% to 4,630.02 and UK’s FTSE 100 increased by 38.67 points or 0.6% to 6,470.88.

Asian markets closed in red on Wednesday led by a massive sell-off in Chinese and Hong Kong markets, despite further efforts from Beijing to stave off the relentless fall in Chinese share prices. Authorities in China unveiled a raft of new measures to try and contain the losses on the markets, including allowing increased exposure to equities among insurance companies and extending government buying of stocks beyond blue-chip companies and into smaller and medium-size companies. Hong Kong’s home prices hit a record high in May, supported by strong demand and ample liquidity in one of the world’s most expensive property markets, despite a series of tightening measures. An official index of overall private home prices for May edged up 1.1 percentage points year-on-year to 298.4 points. That’s 20 per cent higher than the year before and a second straight monthly gain.

Bank of Japan's Takahide Kiuchi stated that a slowdown in China’s economic growth may hurt Japan’s economy for the time being. Kiuchi added that policymakers must be more mindful of the demerits of a weak yen, such as rising prices of daily necessities that may hurt private consumption. Kiuchi has been a lone dissenter to maintaining the BOJ’s massive stimulus that was expanded in October last year, arguing that the costs were beginning to exceed the merits. Japan’s Economy Watchers Current Index fell to a seasonally adjusted 51.0, from 53.3 in the preceding month while Japan’s Current Account rose to a seasonally adjusted 1.64T, from 1.27T in the preceding month. Taiwanese CPI rose to a seasonally adjusted annual rate of -0.56%, from -0.73% in the preceding quarter.