Post Session: Quick Review

Monday turned out to be a daunting session for the Indian equity indices which got pounded by over two percentage points, amid concerns over slowdown in China and escalating tension in West Asia. After a negative opening, the domestic bourses never looked in recovery mood and ended the trade at intraday lows, breaching their crucial support levels of 25,700 (Sensex) and 7,800 (Nifty). Selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included telecom, banking and industrials.

Sentiments remained dampened since morning with report that foreign funds stayed away from Indian equities in 2015 and invested just Rs 17,806 crore ($3.2 billion) in stock markets last year as compared to Rs 1 lakh crore invested each into equities in the preceding three years. Sentiments also turned down-beat after The Nikkei India Manufacturing PMI, a composite monthly indicator of manufacturing performance, dipped from 50.3 in November to 49.1 in December. The PMI has slipped below the crucial level of 50.0 for the first time since October 2013. Oil prices jumped as Saudi Arabia's execution of a prominent Shiite Muslim cleric at the weekend spurred regional anger and geopolitical tensions in the Middle East. Riyadh cut ties with Iran after protesters stormed the Saudi embassy in Tehran.

Selling got intensified after European counters have made a feeble start on Monday, the first day of trading for 2016, as weak Chinese economic data weighed on world stock markets. All the Asian equity indices witnessed massacre and ended the session with a cut of 1-6%. Chinese benchmark tumbled around seven percent after China’s factory activity contracted for the 10th straight month in December and at a sharper pace than in November, dampening hopes that the world's second-largest economy will enter 2016 on a more stable footing.

Back home, depreciation in Indian rupee too dampened the sentiments. The rupee was at 61.52 per dollar at the time of equity markets closing as compared to 61.15 per dollar level on Friday. Traders also remained concerned with Former finance minister P Chidambaram stating the government has not been able to fulfill its promises. He also argued that since the GDP growth for 2015-16 is not likely to be higher than 7% to 7.3%, the economy is stuck in a groove.

Stocks related to banking counter played spoil sport for the markets amid weak December manufacturing PMI. Metal stocks reeled under pressure following by a weak PMI data in China. Meanwhile, telecom stocks got hit post the order from the Telecom Regulatory Authority of India (Trai) that has written to operators to ensure compliance with call drop regulations, effective January 1. However, service providers remain defiant and say compensation to subscribers will be paid only after court orders them to do so.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and seventy points to end below the psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around five hundred and forty points to finish below its psychological 25,700 mark. Broader markets too witnessed selling pressure and ended the session with a cut of over a percentage point.

The market breadth remained in favor of decliners, as there were 1,285 shares on the gaining side against 1,599 shares on the losing side while 104 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25623.35, down by 537.55 points or 2.05% after trading in a range of 25596.57 and 26116.52. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index was down by 1.20%, while Small cap index down by 1.11%.

The losing sectoral indices on the BSE were Telecom down by 3.20%, Bankex down by 2.59%, Finance down by 2.50%, Industrials down by 2.42%, Auto down by 2.12%, while there were no gainers on the index.

The few gainers on the Sensex were Wipro up by 0.41%, Hindustan Unilever up by 0.07% and Asian Paints up by 0.06%. On the flip side, Tata Motors down by 6.10%, Bharti Airtel down by 4.10%, Adani Ports &Special down by 3.66%, BHEL down by 3.45% and HDFC down by 3.26% were the top losers.

Meanwhile, the government has raised excise duty on petrol and diesel, the second increase in duties in just over two weeks, to mop up a little less than Rs 4,400 crore. The duty on petrol has been raised by 37 paise per litre, while that on diesel is up a steeper Rs 2 per litre. The increase in excise duty will fetch the government over Rs 4,300 crore on diesel and about Rs 80 crore on petrol. Hike in excise duty on petrol and diesel, three times in quick succession, will help the government garner an additional Rs 10,000 crore in the fiscal and partly make up for the shortfall in disinvestment receipts and direct tax collections.

As per the notification of the Central Board of Excise and Customs (CBEC), the total levy on unbranded petrol will be Rs 19.73 per litre as against Rs 19.36 currently, after including additional and special excise duty. On unbranded or normal diesel, total excise duty after including special excise duty will be Rs 13.83 per litre as compared to Rs 11.83 currently. Basic excise duty on unbranded or normal petrol has been increased from Rs 7.36 per litre to Rs 7.73 and the same on unbranded diesel from Rs 5.83 to Rs 7.83 per litre.

The three excise duty hikes this fiscal, totalling Rs 2.27 per litre on petrol and Rs 3.47 a litre on diesel, will yield the government Rs 10,000 crore in additional revenue during the remainder of current fiscal. Earlier, in December, government had raised excise duty on petrol by 30 paise litre and on diesel by Rs 1.17 a litre.

The CNX Nifty ended at 7791.30, down by 171.90 points or 2.16% after trading in a range of 7781.10 and 7937.55. There were 4 stocks advancing against 46 stocks declining on the index.

The few gainers on Nifty were Hindustan Unilever up by 0.29%, Asian Paints up by 0.23%, Wipro up by 0.22% and HCL Tech up by 0.01%. On the flip side, Tata Motors down by 6.18%, Idea Cellular down by 5.31%, Bank of Baroda down by 4.94%, Hindalco down by 4.89% and PNB down by 4.08% were the top losers.

European markets were trading in red; Germany’s DAX tumbled 371.98 points or 3.46% to 10,371.03, UK’s FTSE 100 declined 127.93 points or 2.05% to 6,114.39 and France’s CAC was down by 112.37 points or 2.42% to 4,524.69.

Asian equity markets ended in red on Monday after Chinese factory data disappointed investors and China's central bank set the reference rate for Yuan at a more than 4-1/2-year low. Reports showed that the Caixin/Markit purchasing managers' index (PMI) slipped to 48.2 in December from 48.6 the previous month, marking the 10th consecutive month of shrinking factory activity in the sector, fueling fresh concerns over the health of the world's second-largest economy. The geopolitical situation in the Middle East is also a point of concern for market watchers. Japanese shares tumbled to a 2-1/2 month low after weak China factory activity surveys and year-end losses on Wall Street discouraged investors on the first trading day of 2016.