Post session - Quick review

Political jitters kept the Indian equity markets grounded on Tuesday as barometer gauges ended well below where they started from. In fact, frontline indices after toying around their neutral line dipped only further towards the fag end of the trade to validate the signs of the consolidation.

The volatile session of trade with large volume ended in absolute disgust as the frontline indices facing a blow from Congress defeat, concluded the session, with a nasty nick of over a percentage points. Results, which showed that the, Congress-led UPA, trailed fourth in the assembly elections of India's most populous state of Uttar Pradesh (UP) mainly led the investor’s to take a flight of safety from Dalal Street. However, besides being whitewashed in UP, Congress faced rout in Punjab and Uttarakhand too remained dicey. This nasty gust of trounce drag the 30 share index below the long prevailing 17200 level, while the 50 share index too concluded brutally, only to find support near the 5200 level.

Meanwhile, negative global setup in light of political uncertainties, also instilled profit booking across the space, which besides powering bears, led to another dismal show of Indian equity markets for second consecutive session.  Asian shares, registering the first two-day decline since January, concluded lower after data from the US and Europe signaled slowing economic growth. US factory orders decreased for the first time in three months and euro-area services output shrank more than forecast in February, economic reports showed yesterday.

However, even European stocks fell before a report that may confirm a contraction in the euro-area economy and as investors weighed Greece’s chances of avoiding default by getting private creditors to accept a debt swap. The US future indices too indicated a negative start of the Wall Street.

Back on the home turf, stocks belonging to the Metal, Power and Capital Goods space, faced the maximum brunt of profit booking; however, stocks from FMCG, CD and Information Technology counters were amongst the shining starts of the session. Benefited the most out of the political drama were sugar stocks, as UP is the biggest manufacturer of sugar cane in India, however, these too by the end of the trade succumbed to the selling pressure. Sugar stocks, like Bajaj Hindusthan , Dhampur Sugar and Oudh Sugar, gained traction in early trade as the Mayawati government in UP ahead of the polls, raised sugar prices to Rs 250 per quintal from Rs 210 per quintal despite a significantly high sugar cane production in 2011-12. The state-administered prices or SAP play a significant role as sugar producers are expected to pay that price to farmers to procure sugar.

The 30 share barometer index -Sensex- on BSE-declined over a hundred and fifty points to finish sub 17200 level. Similarly, 50 share widely followed index on National Stock Exchange (NSE)-Nifty-plummeting over a 50 points concluded near the psychological 5200 level. The broader indices too participated in the gut, as both midcap and smallcap index went home with loss of over a percent each. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1063:1748 while 121 scrips remained unchanged. (Provisional)

The BSE Sensex lost 230.20 points or 1.33% and settled at 17,132.67. The index touched a high and a low of 17,691.96 and 17,128.28 respectively. 9 stocks advanced against 20 declining ones while 1 stock remain unchanged on the index (Provisional)

The BSE Mid-cap index lost 1.24% while Small-cap index was down by 1.43%. (Provisional)

On the BSE Sectoral front, FMCG up 0.80%, Consumer Durables up 0.63% and IT up 0.12% were the only gainer while Metal down 4.25%, Power down 2.75%, Capital Goods down 2.34%, Oil & Gas down 1.75% and Bankex down 1.56% were the top losers.

The top gainers on the Sensex were DLF up 2.81%, ITC up 1.45%, Baja Auto up 1.13%, Maruti Suzuki up 1.10% and Infosys up 1.06%.

On the flip side, Hindalco Industries down 6.15%, Sterlite Industries down 5.73%, Tata Steel down 5.69%, Tata Power down 4.55% and Jindal Steel down 4.28% were the top losers in the index. (Provisional)

Meanwhile, with the view of easing and encouraging trade with Iran, the Indian government has decided to provide incentives for exports to Iran in rupee terms on par with those for export proceeds in freely convertible currency. As per a government notification, exports receipts realized from Iranian exports will be eligible to export benefits and incentives.

Iran is currently facing sanctions from the western countries for its ‘doubtful’ nuclear programme. India however has refused to comply completely with the sanctions stating that its developing economy needs Iranian oil. India has also decided to increase trade with Iran by tapping areas where lacunas have been created due to the sanctions.

In another development, Iran has also expressed its desire to export electricity directly to India. It has said that it is keen to help India with the country’s much needed energy requirements and transporting electricity would be much cheaper than transporting natural gas. These comments have come after the tri-nation gas pipeline between India, Pakistan and Iran fell into a limbo.

India, Iran and Pakistan had entered an agreement for a tri-nation gas pipeline project to transport natural gas which could then be converted into power. However the project took a back seat when USA offered India an alternative source of energy by access to civil nuclear technology in lieu of the pipeline.

Iran has also expressed its keenness to use India as a model for development of clean energies as latter is one of the frontrunners in the field of generating renewable energies.

India VIX, a gauge for market’s short term expectation of volatility lost 5.46% at 27.34 from its previous close of 28.92 on Monday. (Provisional)

The S&P CNX Nifty lost 71.60 points or 1.36% to settle at 5,208.75. The index touched high and low of 5,382.05 and 5,206.40 respectively. 12 stocks advanced against 38 declining ones on the index. (Provisional)

The top gainers on the Nifty were DLF up 2.84%, Siemens up 2.70%, ITC up 1.55%, M&M up 1.44% and Maruti Suzuki up 1.28%.On the other hand, Reliance Power down 7.50%, Hindalco Industries down 6.25%, Tata Steel down 6.08%, Reliance Infrastructure down 6.07% and Sterlite Industries down 5.89% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.44%, Germany's DAX down 1.34% and Britain’s FTSE 100 down 0.88%.