Dalal Street ends disappointing session with cut of over half a percent

Indian benchmark indices continued their struggle for the third consecutive session of trade as they went home with over half a percent of loss. Sentiments got undermined after North Korea said it has successfully conducted a test of a miniaturised hydrogen nuclear device on Wednesday morning, marking a significant advance in the isolated state's strike capabilities and raising alarm bells in Japan and South Korea. Risk sentiment was also dampened with the report that corporate earnings growth is expected to fall around 2% for the December quarter owing to a plunge in commodity prices coupled with weaker investment demand. The much-anticipated turnaround in earnings of India Inc is unlikely to take place in the December quarter season. Furthermore, Industry body CII's President Sumit Mazumder said that the economy is not doing as good as it was expected and the pace of reforms have slowed down. Investors failed to draw any solace from report that India's services sector rebounded from flat activity in November and showed an encouraging growth in December, with the Nikkei Services Purchasing Managers' Index (PMI) climbing to a ten-month high of 53.6, compared with 50.1 last month.

On the global front, Asian equity markets ended mostly in red on Wednesday as China allowed the yuan to weaken further, stoking fears about its slowing economy, while a North Korean nuclear test heightened geopolitical tensions. Japanese shares fell for a third day after oil resumed declines and the yen vaulted to a near three-month high against the dollar in the wake of weak economic data from China and rising tensions in the Middle East. Further, European markets started the day on weak note with all CAC, DAX and FTSE were declining around a percent weighed down by commodity stocks.

Back home, the benchmark got off to a sedate opening tracking the dismal leads prevailing in Asian markets. Thereafter, the indices traded on a lackluster note for most part of the morning deals. The key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Though the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of over half a percent to settle below the crucial 7,750 support level while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over one hundred and fifty points and closed above the psychological 25,400 mark. Moreover, the broader markets succumbed to the selling pressure despite showing positive moves early on and settled with cuts of over quarter a percent.  On the BSE sectoral space, the high beta - FMCG and Metal pockets remained among top laggards in the space as they got lacerated by around one and half percent, while sectors like Capital Goods and Auto too got pounded heavily in the session. Telecom stocks also remained under pressure, as the Delhi High Court is likely to pronounce its order on compensation for call drops later today. On the flipside, Oil & Gas pocket managed to go home with gains of over half a percent. The market breadth remained pessimistic as there were 1404 shares on the gaining side against 1516 shares on the losing side while 111 shares remained unchanged.

Finally, the BSE Sensex declined by 174.01 points or 0.68% to 25406.33, while the CNX Nifty lost 43.65 points or 0.56% to 7,741.00.

The BSE Sensex traded in a range of 25766.76 and 25513.75. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices made a negative closing; the BSE Mid cap index ended down by 0.29%, while Small cap index ended down by 0.42%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.76%, IT up by 0.01% while, FMCG down by 1.57%, Metal down by 1.48%, Capital Goods down by 1.32%, Auto down by 1.24%, Realty down by 0.85% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.67%, Cipla up by 1.75%, TCS up by 1.31%, Coal India up by 0.44% and HDFC Bank up by 0.33%. On the flip side, ITC down by 2.96%, ICICI Bank down by 2.59%, Tata Motors down by 2.39%, Tata Steel down by 2.04% and Mahindra & Mahindra down by 1.95% 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 Reliance Industries up by 2.38%, Cipla up by 1.51%, TCS up by 1.41%, BPCL up by 0.95% and Indusind Bank up by 0.80%. On the flip side, Vedanta down by 3.95%, ITC down by 3.03%, Hindalco down by 2.60%, ICICI Bank down by 2.53% and Tata Motors down by 2.52% were the top losers.

European markets were trading in red; Germany’s DAX decreased 88.32 points or 0.86% to 10,221.78, UK’s FTSE 100 declined 52.97 points or 0.86% to 6,084.27 and France’s CAC was down by 32.56 points or 0.72% to 4,505.07.

Asian equity markets ended mostly in red on Wednesday as a nuclear test by North Korea heightened concerns for investors already fretting over the slowdown in China. North Korea confirmed today that it carried out a nuclear test, claiming it was a hydrogen bomb detonation. The announcement followed a 5.1-magnitude earthquake that was detected at North Korea's nuclear test site. Japanese shares fell for a third day after oil resumed declines and the yen vaulted to a near three-month high against the dollar in the wake of weak economic data from China and rising tensions in the Middle East. However, China stocks ended higher, led by a surge in resources shares, on hopes that regulators will extend a ban on share sales by major stakeholders as Beijing scrambled to avert a potential repeat of last summer's market crash.