Post Session: Quick Review

Tuesday turned out to be a disappointing session for the Indian equity indices which got pounded by over half a percentage point as investors sold stocks across sectors. Traders remained on sidelines in a holiday-shortened week and ahead of the expiry of derivatives contracts next Thursday. The barometer gauges traded near their neutral lines in first half and showed some momentum in late afternoon trade but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 7,800 (Nifty) and 25,600 (Sensex) levels. Traders remained concerned over the passage of the goods and services tax (GST) bill in parliament. The sentiments also weighed down with report that the Finance Ministry has cut its ambitious disinvestment revenue target by 57% to Rs 30,000 crore for the current fiscal year.

Traders failed to draw any sense of relief with Moody’s Investors Service’s report that Reserve Bank of India’s (RBI) new uniform methodology for calculating base rate on marginal cost of funds is ‘credit positive' for Indian banks as it would ease pressure on their balance sheet. Meanwhile, the government introduced the 'Insolvency and Bankruptcy Code 2015', or the bankruptcy Bill, in the Lok Sabha on Monday. The Bill is one of the steps that Finance Minister Arun Jaitley has identified as crucial for India to improve ease of doing business.

Selling got intensified as European markets made a weak opening. All the major European indices remained under pressure on account of political uncertainty in Spain and weaker oil prices. However, Asian equities closed mostly in green mirroring a trend in the US markets with Japan’s Nikkei bucking the trend. Caution prevailed among the Asian peers on low share trade volume and declining crude oil prices ahead of this week's holidays.

Back Home, selling in software space too dampened sentiments on account of sharp hike in visa fees. On the flip side, telecom stocks remained on buyers’ radar with the Telecom Regulatory Authority of India (TRAI) saying that it will come up with its recommendations on spectrum pricing for the next round of auction by mid-January. TRAI has floated a consultation paper on reference made by the government to suggest the base or floor price for all available airwaves for mobile services. Aviation stocks continued to fly higher for second day in a row on the report that domestic air traffic grew by nearly 25 per cent in November to 7.32 million passengers as compared to 5.82 million passengers in the same period last year.

The NSE’s 50-share broadly followed index Nifty tumbled by around fifty points to end below the psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around one hundred and fifty points to finish below its psychological 25,600 mark. Broader markets too struggled to get any traction and ended the session slightly in red. The market breadth remained in favor of decliners, as there were 1,305 shares on the gaining side against 1,369shares on the losing side while 237 shares remain unchanged.

The BSE Sensex ended at 25590.65, down by 145.25 points or 0.56% after trading in a range of 25485.17 and 25787.21. There were 10 stocks advancing against 20 stocks declining on the index.(Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.31%, while Small cap index down by 0.02%.(Provisional)

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.82%, Telecom up by 0.73%, Healthcare up by 0.31% and Utilities up by 0.03%, while IT down by 1.15%, Metal down by 1.00%, TECK down by 0.86%, FMCG down by 0.81% and Auto down by 0.66% were the top losing indices on BSE.(Provisional)

The top gainers on the Sensex were Sun Pharma up by 1.28%, Axis Bank up by 1.04%, Asian Paints up by 0.97%, GAIL India up by 0.59% and Bharti Airtel up by 0.53%. On the flip side, Infosys down by 1.91%, ITC down by 1.77%, Adani Ports &Special down by 1.44%, Mahindra & Mahindra down by 1.36% and TCS down by 1.27% were the top losers.(Provisional)

Meanwhile, in order to deal with the challenges related to the draw off of black money, Central Board of Direct Taxation (CBDT) has said that India is close to signing collaborative jurisdictional agreements with three countries - Singapore, the United Arab Emirates and Hong Kong. It is in the process and will come up with a revised note before December 31, 2015 which will provide guidance to financial institutions, regulators and tax department officers for ensuring compliance of norms.

CBDT said that though they have yet to sign the Multilateral Competent Authority Agreement (MCAA) for the AEOI, Dubai, Hong Kong and Singapore will fall under jurisdictions which have committed for AEOI from 2018.  Once Singapore and the UAE sign the MCAA, India would be able to exchange information automatically with these countries from 2018 onwards, where as the treaty negotiation with Hong Kong is underway.

It further highlighted that once the AEOI will be implemented, it would enable India to receive information from every country in the world, including offshore financial centres and tax havens, and would be the key to prevent international tax evasion and avoidance, and would be instrumental in getting information about money stashed. AEOI will help create an environment of transparency between 75 countries that have signed the MCAA, including nations like Switzerland and the British Version Ireland (BVI) etc.

Further, in order to ensure confidentiality of data received from foreign countries that will ensure a transparent environment to deal with the problem and challenges of black money, CBDT has constituted an 'Information Security Committee'. This will relate to processes such as ratification and information security policies and procedures (ISPP) to ensure implementation and management review. It will also focus on maintaining continuing suitability, adequacy and effectiveness of ISPP.

The CNX Nifty ended at 7786.10, down by 48.35 points or 0.62% after trading in a range of 7776.85 and 7846.30. There were 13 stocks advancing against 37 stocks declining on the index.(Provisional)

The top gainers on Nifty were Sun Pharma up by 1.26%, Axis Bank up by 0.98%, Asian Paints up by 0.85%, Idea Cellular up by 0.83% and Bharti Airtel up by 0.72%. On the flip side, Hindalco down by 2.09%, ITC down by 1.93%, Infosys down by 1.79%, Mahindra & Mahindra down by 1.74% and TCS down by 1.69% were the top losers.(Provisional)

European markets were trading in red; Germany’s DAX declined 95.65 points or 0.91% to 10,402.12, France’s CAC decreased 32.05 points or 0.7% to 4,533.12 and UK’s FTSE 100 was down by 1.06 points or 0.02% to 6,033.78.

Asian equity markets ended mostly in green on Tuesday, with positive cues from Wall Street and the prospects of more stimulus in China underpinning investor sentiment. China’s government said that monetary policy must be more ‘flexible’ and fiscal spending more ‘forceful’ to combat slowing growth in the world’s second-largest economy. Hong Kong stocks closed tad higher as trading activities started to wind down for the Christmas holiday break. However, Japanese stocks ended lower after directionless moves amid a dearth of fresh incentives, with many investors sitting on the fence prior to holidays in Japan and abroad.