Global worries once again pull markets lower; Sensex closes below 25600 level

The Indian markets were unable to make any recovery after plunging in previous session and witnessed a volatile day of trade, finally closing in red with marginal losses, extending the declining trend for yet another session as overall market sentiment remained cautious due to continued worries about China's markets. Sentiments remained down-beat with retail inflation for farm labourers and rural workers in November rising to 4.92 percent and 5.02 percent, respectively, due to increase in prices of food items. Furthermore, ending a 25-month expansion run, manufacturing activity in India fell into the contraction zone in December, indicating that a festival-related surge may not be sustainable. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) dipped to 49.1 in December from 50.3 in November.  Besides, caution continues to envelop the D-Street as investors eagerly await the upcoming macro-data on industrial output, retail inflation and the third-quarter earnings results which start from January 14, 2016. However, losses remained capped with the Finance Minister, Arun Jaitley’s statement that the public investments would continue to ‘remain stepped up’ in the Indian economy, which has emerged as a stable force in the midst of global slowdown. On the global front, China's shares took a wild ride Tuesday, darting between gains and losses before closing mixed, following a sharp selloff in the previous session, while other Asian markets like Nikkei and Hang Seng also finished lower between 0.4-0.6% each. European stock markets also saw an opening bounce completely wiped out, with France’s CAC 40 index and Germany’s Dax 30 index both down 0.6 per cent as eurozone inflation data disappointed.

Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the red terrain sooner than later, lacking any significant upside cues.  Thereafter, the key indices failed to show any kind of eagerness to regain those levels as they oscillated around the neutral line for most part of morning trades and drifted deeper into the red terrain in afternoon session. Finally some short covering in the dying hours of trade ensured that the bourses snap the session with moderate cuts.  Eventually the NSE’s 50-share broadly followed index Nifty, registered single digit losses to settle below the crucial 7,800 support level while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by less than forty points and closed below the psychological 25,600 mark. However, the broader markets showed some resilience and settled on a positive note, outperforming their larger peers by quite a margin. On the BSE sectoral space, the IT index remained the top laggard in the space and settled with about half percent cuts followed by the TECK pocket which too went home with similar losses. On the other hand, the Metal pocket remained the top gainer in the space following stability in China after its central bank infused capital into the financial system. Stocks related to power counter surged as the power ministry Piyush Goyal has said that fifteen states have joined the debt recast scheme for power distribution companies covering 90% of the losses accumulated with the utilities. Oil and gas stocks ended higher after the Prime Minister, Narendra Modi, emphasised the need for a fresh look at the oil and gas sector to bring in investments, technological upgradation and development of human resources.

The market breadth remained in favour of advance, as there were 2068 shares on the gaining side against 840 shares on the losing side, while 99 shares remained unchanged.

Finally, the BSE Sensex declined by 43.01 points or 0.17% to 25580.34, while the CNX Nifty lost 6.65 points or 0.09% to 7,784.65.

The BSE Sensex traded in a range of 25766.76 and 25513.75. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices made a positive closing; the BSE Mid cap index ended up by 0.56%, while Small cap index ended up by 0.79%.

The top gaining sectoral indices on the BSE were Metal up by 2.20%, Oil & Gas up by 1.93%, Realty up by 1.39%, Consumer Durables up by 0.60% and PSU up by 0.39%, while IT down by 0.42%, TECK down by 0.41%, Bankex down by 0.32%, Auto down by 0.31% and FMCG down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 6.65%, GAIL India up by 3.60%, Asian Paints up by 2.29%, ONGC up by 1.47% and Reliance Industries up by 0.97%. On the flip side, Coal India down by 1.35%, SBI down by 1.22%, Hero MotoCorp down by 1.11%, Hindustan Unilever down by 1.09% and TCS down by 1.06% were the top losers.

Meanwhile, Retail inflation for farm labourers and rural workers showed an uptick move in the month of November on the back of increase in prices of food items. The Point to point rate of inflation based on the Consumer Price Index (CPI) - Agricultural Labourers (AL) and CPI- Rural Labourers(RL) rose 4.92 per cent and 5.02 per cent, respectively in November, 2015. The corresponding figures were 4.43 per cent and 4.66 per cent in October. Food Inflation under CPI-AL and CPI-RL came in at 4.79% and 5.15% respectively during November, 2015.

According to the data release by the labour Ministry, the All-India Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for November, 2015 increased by  4 points each to stand at 853 points and 857 points respectively.

The rise/fall in index varied from State to State. In case of Agricultural Labourers, it recorded an increase between 1 to 18 points in 11 States and a decrease between 2 to 9 points in 8 States while it remained stationary in 1 State. Karnataka State with 950 points topped the index table whereas Himachal Pradesh with 704 points stood at the bottom.

In case of Rural Labourers, it recorded an increase between 1 to 17 points in 11 States and a decrease between 1 to 9 points in 8 States while it remained stationary in 1 State. Karnataka with 944 points topped the index table whereas Himachal Pradesh with 743 points stood at the bottom

The Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers of Tamilnadu State registered the maximum increase of 18 points and 17 points respectively mainly due to increase in the prices of bajra, pulses, meat goat, fish fresh/dry, milk, onion, chillies dry, vegetables & fruits, bidi and firewood. However, the Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers of Meghalaya State registered the maximum decrease of 9 points each due to decrease in the prices of beef, pork, poultry, onion, chillies green, ginger, vegetables & fruits, tobacco leaf and pan leaf.

The CNX Nifty traded in a range of 7,831.20 and 7,763.25. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 6.15%, Vedanta up by 3.65%, GAIL India up by 3.04%, Asian Paints up by 2.34% and Hindalco up by 2.29%. On the flip side, PNB down by 1.95%, Bank of Baroda down by 1.92%, Power Grid down by 1.56%, Coal India down by 1.54% and Hindustan Unilever down by 1.45% were the top losers.

European markets were trading mostly in red; Germany’s DAX decreased 38.06 points or 0.37% to 10,245.38 and France’s CAC was down by 13.37 points or 0.3% to 4,509.08, while UK’s FTSE 100 was up by 14.02 points or 0.23% to 6,107.45.

Asian equity markets ended mostly in red on Tuesday as shares in Shanghai extended Monday's plunge and a diplomatic row between Saudi Arabia and Iran deepened with a number of Saudi Arabia's allies curbing their diplomatic links with Iran in protest at the execution of Sheikh Nimr al-Nimr. However, the People's Bank of China (PBOC) injected 100 billion yuan ($15.3 billion) into domestic markets and the yuan firmed against the dollar on suspected intervention by the central bank, helping limit overall losses to some extent. China's Shanghai Composite index ended a rollercoaster session lower despite state-controlled funds stepping in to help prop up the market and the securities regulator signaling a ban on share sales will remain beyond this week's expiration date.