Post Session: Quick Review

Indian markets following the global trend slumped on Tuesday, the major bourses extending their weakness for the fifth straight session breached their important psychological levels during the day. Sentiment took a hit in the final hours on sustained foreign fund outflows and confusion around the passage of the GST bill after prospects of a compromise between the government and the Opposition were cast in doubt, when a court ruled that Sonia Gandhi and Rahul Gandhi must appear in court in the National Herald case. Leaders of Congress party disrupted the parliament’s functions accusing the government of vendetta politics. Earlier the markets made a soft start following a weak trend in other Asian markets, tracking overnight losses in the US after oil sank to a seven-year low, as OPEC decided not to slash output and on possibility of a Fed rate hike in the US next week. Though, there was some support  too with ratings agency Fitch, while maintaining a stable outlook for India, stating that the country’s economy will grow by 7.5 percent in the current fiscal that will stand out globally. The agency said a 'BBB-' rating, the lowest in the investment grade, along with a stable outlook and a strong medium-term growth prospect and favourable external finances, will balance out with high government debt, weak structurals and a difficult, but improving, business environment.

The Asian markets remained under pressure throughout the session led by the Chinese markets after the nation's exports fell for a fifth month. Slowing trade and a larger-than-expected decline in foreign-exchange reserves intensified concern at the scope of the slowdown in the world’s second-largest economy. Japanese market too ended lower by over a percent, despite report that Japan’s gross domestic product expanded in the third quarter rather than contracting as previously thought, meaning the economy didn’t enter a recession earlier this year. Annualized GDP rose 1 percent in the three months ended Sept. 30 from the previous quarter, preliminary figure had indicated GDP dropped 0.8 percent. The European markets too made a soft start, as oil held near the lowest since 2009 and weighed on whole commodities pack.

Back home, markets which after the initial selling had acquired a tight range and were sailing steady despite in red, suffered severe carnage in the final hours which dragged the bourses below their crucial levels and over ten weeks low. It was mainly the selling by foreign investors and weak sentiments among the participants that led to a selloff in domestic equities. Though, it was complete washout on the Dalal Street but the Metal stocks were worst hit on weak trade report from China. The world's second largest economy saw its trade numbers weaken in November, with exports falling for the fifth straight month and imports dropping for the 13th consecutive month, leading to a trade surplus of $54.10 billion for the month. Vedanta, Hindalco, Hindustan Zinc, SAIL and Tata Steel were among the top losers. The banking gauge too suffered sharp plunge and contributed majorly in dragging the markets lower. However, from the non sectoral gauges Tea stocks surged anywhere between 3-9 per cent after it was reported that tea prices are likely to rise by Rs 15-20/kg from March 2016. Harrison Malayalam was up by over 9%, Assam Company gained over 8%, Jayshree Tea was up by over 6% and Warren Tea gained around 3%.

The BSE Sensex ended at 25272.37, down by 257.74 points or 1.01% after trading in a range of 25256.79 and 25542.47. There were just 4 stocks in green against 26 stocks in red on the index. (Provisional)

The broader indices too suffered sharp cuts; the BSE Mid cap index was down by 1.22%, while Small cap index lost 1.42%. (Provisional)

While none of the sectoral indices on the BSE could make a positive close, the top losing sectoral indices on the BSE were Realty down by 4.10%, Metal down by 3.28%, Oil & Gas down by 2.40%, PSU down by 2.27%, Power down by 1.85%. (Provisional)

The gainers on the Sensex were ITC up by 0.35%, Tata Motors up by 0.34%, Bajaj Auto up by 0.24% and TCS up by 0.08%. On the flip side, GAIL India down by 5.33%, Vedanta down by 4.82%, Hindalco down by 4.16%, ONGC down by 4.06% and Dr. Reddys Lab down by 3.99% were the top losers. (Provisional)

Meanwhile, Petroleum Minister Dharmendra Pradhan has said that the petroleum products should come under the ambit of the proposed Goods and Services Tax (GST) but said that the final decision would be taken only after reaching consensus with the state governments.

Clarifying the statement, Petroleum Minister said that altogether 52 per cent tax is levied on petroleum products by both central and state governments and such revenues are used for various welfare and infrastructure projects. Out of 52 percent around 32 per cent tax is imposed by the Central government on petroleum products while around 20 per cent is levied by state governments.

State governments earn a major chunk of their revenue from taxes on petroleum products such as petrol and diesel which are also easy to collect as public sector oil companies pass on these levies direct to the states. States are, therefore, staunchly opposed to letting go of these goods.

Pradhan further added that the state governments are free to fix the amount of tax they want to levy on petroleum products as every state has its own aspirations and development projects which they carry out through the revenue generated from the sale of petroleum products. Besides, he said that ever since NDA government came into power in May 2014, prices of petrol and diesel were reduced 19 times and enhanced seven times.

Meanwhile, the chief economic adviser (CEA) panel for GST headed by Arvind Subramanian also recommended alcohol and petroleum products within the GST.

The CNX Nifty ended at 7686.40, down by 79.00 points or 1.02% after trading in a range of 7685.95 and 7771.25. There were just 6 stocks on gainers side against 44 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were HCL Tech. up by 1.19%, Kotak Mahindra Bank up by 0.44%, Bajaj Auto up by 0.40%, Tata Motors up by 0.33% and TCS up by 0.23%. On the flip side, Cairn India down by 6.51%, GAIL India down by 5.45%, Vedanta down by 4.77%, Hindalco down by 4.29% and Dr. Reddys Lab down by 4.02% were the top losers. (Provisional)

European markets were trading lower, Germany’s DAX was down by 81.03 points or 0.74% to 10,805.06, UK’s FTSE 100 was lower by 38.62 points or 0.62% to 6,184.90 and France’s CAC decreased by 35.8 points or 0.75% to 4,720.61.

Asian equity markets ended in red on Tuesday after oil prices fell more than 5 percent overnight. Oil prices suffered a sharp decline as a result of a global supply glut. The Organization of the Petroleum Exporting Countries' (OPEC) failed to reach an agreement to reduce production levels when it met on Friday. Chinese stocks posted their biggest loss in 10 days, as disappointing China trade data and slumping oil prices unnerved investors already cautious ahead of an anticipated US rate hike that could trigger more capital outflows. China's exports fell by a more-than-expected 6.8 percent in November from a year earlier, a fifth straight month of decline. Imports, meanwhile, were down 8.7 percent on-year. There was a trade surplus of $54.10 billion. Japan’s stocks fell as a rout in oil and commodity prices dragged energy and material shares lower, outweighing a report showing the nation’s economy avoided a recession in the third quarter. Reports showed the revised Q3 GDP grew 1 percent on-quarter, on an annualized basis. The number beat previous estimation of a 0.8 percent contraction during the same period. Hong Kong stocks closed at a two-month low, tracking sluggish global markets, as slumping oil prices dented already fragile investor confidence ahead of a likely US rate hike.