Post Session: Quick Review

Extending their southward journey for fourth straight session, Indian equity benchmarks witnessed carnage on Thursday with frontline gages tumbling by over two percentage points as China accelerated the depreciation of the yuan, sparking sharp falls in regional equity and currency markets. China also suspended its stock markets for the rest of the day less than half an hour after opening as a new circuit-breaking mechanism was tripped for the second time this week. After a gap-down start, the domestic bourses never looked in recovery mood and ended the trade at four month closing lows, breaching their crucial support levels of 24,900 (Sensex) and 7,600 (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 realty, auto and metal.

Sentiments also remained downbeat after the World Bank lowered its global economic growth forecast for 2016 to 2.9% against its June forecast of 3.3% growth because of sluggish performance from major emerging market economies. Meanwhile, crude oil prices resumed their decline on the back of supply glut and concerns of weakening demand from China. Brent crude fell to 11 year low as it closed below $35/barrel yesterday.

Selling got intensified after European counters have made a feeble start with CAC, DAX and FTSE were trading with a cut of around three percent in early deals. All the Asian equity indices witnessed massacre on Thursday after China’s central bank again surprised markets by setting onshore yuan’s value lower to the US dollar, sending the domestic stock markets tumbling.

Closer home, depreciation in Indian rupee too dampened the sentiments. The rupee was at 66.86 per dollar at the time of equity markets closing as compared to 66.82 per dollar level on Wednesday. Persistent foreign capital outflows also affected the market sentiment. Foreign investors sold shares worth Rs. 242.48 crore yesterday as per provisional data.

Metal and mining stocks edged lower amid concerns over China's economic growth. Shares of oil exploration and production (E&P) companies edged lower as global crude oil price fell sharply. Stocks related to Auto space remained buzzing, as the government ignoring protests from car makers -who will have to invest heavily and raise prices steeply, has decided to adopt Bharat Stage VI norms all over India by April 1, 2020.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and seventy points to end below the psychological 7,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around five hundred and fifty points to finish below its psychological 24,900 mark. Broader markets too witnessed selling pressure and ended the session with a cut of over two and a half percentage point.

The market breadth remained in favor of decliners, as there were 688 shares on the gaining side against 2,194 shares on the losing side while 97 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24851.83, down by 554.50 points or 2.18% after trading in a range of 24825.70 and 25230.35. There were 1 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.61%, while Small cap index down by 2.87%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 4.50%, Auto down by 3.72%, Metal down by 3.72%, Industrials down by 3.54% and Power down by 3.45%, while there were no losers on the index. (Provisional)

The lone gainer on the Sensex was Coal India up by 0.03%. On the flip side, BHEL down by 7.01%, Tata Steel down by 6.52%, Tata Motors down by 5.85%, Axis Bank down by 5.06% and ONGC down by 4.99% were the top losers. (Provisional)

Meanwhile, concerned over continued decline in exports, the Commerce and Industry Minister will hold a meeting with representatives of states and the industry on January 8, to discuss ways to promote India’s exports. In the meeting the Centre and state governments will deliberate on the relevant infrastructure to promote trade and identify impediments that are affecting exports.  The meeting is scheduled as part of the first meeting of the Council for Trade Development and Promotion, chaired by Commerce and Industry Minister Nirmala Sitharaman. The council was formed last year with an aim to involve states in boosting trade.

The council provides a platform to state governments and UTs for articulating their perspective on trade policy to help them develop and pursue export strategies in line with national foreign trade policy. The other members of the council include Chairman Railway Board, Niti Aayog Secretary and CEO, Director General of Foreign Trade, Director General of FIEO, representati ves of CII and FICCI and concerned Joint Secretary of Department of Commerce. Federation of India Export Organisation (FIEO) which will also participate the meeting has said that it will raise issues related to tax refund in states as large amount of refund is pending with states. Filing of tax is online but refund is not online which are impacting exports. Further, the other issues which will come up include demand for inclusion of certain taxes like entry tax and electricity tax in the GST.

Contracting for the twelve month in a row, India’s exports plunged 24 percent in November to $20 million. The significant fall in exports is attributed to weak global demand, amid a tepid global economic recovery. During April-November this fiscal, the exports contracted by 18.46 per cent year-on-year to $ 174.3 billion.

The CNX Nifty ended at 7568.30, down by 172.70 points or 2.23% after trading in a range of 7556.60 and 7674.95. There were 1 stocks advancing against 49 stocks declining on the index. (Provisional)

The lone gainer on Nifty was Bharti Airtel up by 0.05%. On the flip side, Vedanta down by 8.72%, Cairn India down by 8.29%, BHEL down by 7.18%, Tata Steel down by 7.01% and Bank of Baroda down by 6.19% were the top losers. (Provisional)

European markets were trading with deep cut; Germany’s DAX tumbled 355.69 points or 3.48% to 9,858.33, UK’s FTSE 100 declined 167.86 points or 2.76% to 5,905.52 and France’s CAC was down by 138.71 points or 3.1% to 4,341.76.

Asian equity markets ended in deep red on Thursday after China again guided the yuan sharply lower while Shanghai shares tanked more than 7 percent within the first 30 minutes of trading and triggered a stock market circuit breaker for the second time this week. Trading on mainland Chinese markets was suspended for the rest of the day. In light of the early shutdown, Chinese securities regulator issued new rules that restrict share sales by listed companies' major shareholders. Large shareholders who want to sell stakes of more than 1 percent in listed companies have to disclose their plans to the exchanges 15 trading sessions in advance. Adding to the woe was weak oil prices, which declined to 12-year lows in Asian trading hours. Japanese stocks tumbled for a fourth day as a faster-than-expected weakening of the yuan and heightened geopolitical tensions lifted the safe-haven yen to a level last seen in late August.