Weak global cues rattle markets again; Sensex ends below 24850 level

It turned out to be a lackadaisical performance from the benchmark indices on Monday as they failed to snap the session in the green territory and settled below the neutral line as investors at large remained reluctant to build on long positions ahead of official start of the third quarter earnings season with TCS’ result and also monthly industrial production data. Sentiments remained subdued with a private report stating that consumer sentiments in India fell for the fourth consecutive month in December to the lowest on record, as consumers reported a further deterioration in their personal finances amid rising inflation. Trading sentiments were weakened further with Commerce and Industry Minister Nirmala Sitharaman’s statement that the devaluation of the Chinese currency is a 'worrying' development which will make Indian exports expensive and widen the trade deficit with the neighbouring nation. Besides, depreciation in Indian rupee against the dollar also negatively impacted the sentiment. However, investors got some strength with World Bank report stating that India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8 percent in fiscal 2016-17, more than a percentage point higher than China’s. On the global front, Asian markets ended in red on Monday as concern about China's growth outlook continued to fan a global sell-off. Sentiments got undermined after Wall Street suffered its worst starting week in history and doubts over Beijing's economic competence sent investors into the arms of the safe-haven yen and sovereign bonds.  On the other hand, European stocks markets rebounded and ignored another selloff in China on Monday, with German shares leading the charge higher on the back of a weaker euro.

Back home, the benchmarks got off to a weak start as the indices breached the psychological 7,550 and 24,700 levels in the early moments of trade since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. After the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. The frontline indices even managed to break into the positive terrain in afternoon trades but only for a brief period, tracking the leads from European counterparts. But some final hour profit booking followed by mild short covering ensured that the bourses snap the session with moderate cuts. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of about half a percent to settle above the crucial 7,550 support level while Bombay Stock Exchange’s Sensitive Index Sensex slipped by over hundred points and closed below the psychological 24,900 mark. Moreover, the broader markets too succumbed to the selling pressure and closed with losses of about a percent. On the BSE sectoral space, the high beta - IT and TECK pockets remained among top laggards in the space as they got lacerated by over a percent, while sectors like PSU and Banking too got pounded heavily in the session. On the flipside, Realty pocket managed to go home with gains of around quarter percent. The market breadth remained pessimistic as there were 1228 shares on the gaining side against 1571 shares on the losing side while 131 shares remained unchanged.

Finally, the BSE Sensex declined by 109.29 points or 0.44% to 24825.04, while the CNX Nifty ended down by 37.50 points or 0.49% to 7,563.85.

The BSE Sensex traded in a range of 24961.88 and 24598.90. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices made a positive closing; the BSE Mid cap index ended down by 0.95%, while Small cap index ended down by 0.47%.

The top gaining sectoral indices on the BSE were Realty up by 0.25% and Auto up by 0.10%, while IT down by 1.10%, TECK down by 1.06%, PSU down by 0.98%, Bankex down by 0.79% and Capital Goods down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.69%, Tata Motors up by 2.04%, Maruti Suzuki up by 1.81%, NTPC up by 1.47% and ITC up by 0.85%. On the flip side, Mahindra & Mahindra down by 3.40%, Wipro down by 3.27%, Adani Ports &Special down by 3.13%, BHEL down by 2.57% and Dr. Reddys Lab down by 2.56% were the top losers.

Meanwhile, in order to review the on-ground implementation of some of the recent initiatives announced by the government for a taxpayer-friendly regime and to widen the base of taxpaying people, the Central Board of Direct Taxes (CBDT) will hold a high-level meeting with top income-tax department officials on January 13. The meeting will be chaired by the Chairman AK Jain of CBDT and will be attended by other members of the board who will interact with all the regional IT department heads via video conferencing. The inputs received by the CBDT after the meeting, will be used in preparation of the Union Budget.

According to the agenda proposed for the meeting, the top policy-making body of the Income Tax department will review the current status of revenue collection under the direct taxes category, prompt issuance of refunds up to Rs. 50,000 in non-scrutiny cases and progress on the new project of holding scrutiny of cases through email and internet-based communication. Besides, the meeting will assess the progress made by IT department in adding new assesses under the initiative to add one crore new taxpayers this fiscal.

Furthermore, the other subjects for review include the monitoring of pending legal cases and their effective disposal, implementation of recent orders for hike in monetary limits for appeal in the Income Tax Appellate Tribunal (ITAT) and High Courts, quick disposal of taxpayer grievances and status of scrutiny cases being worked out in the department.

The CNX Nifty traded in a range of 7,605.10 and 7,494.35. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 4.87%, Reliance Industries up by 2.56%, Tata Motors up by 1.94%, Grasim Industries up by 1.74% and Maruti Suzuki up by 1.68%. On the flip side, Wipro down by 3.47%, Mahindra & Mahindra down by 3.36%, Adani Ports &Special down by 3.33%, Tech Mahindra down by 2.90% and Dr. Reddy's Laboratories down by 2.71% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 10.88 points or 0.18% to 5,923.32, France’s CAC rose 28.23 points or 0.65% to 4,361.99 and Germany’s DAX was up by 78.47 points or 0.8% to 9,927.81.

Asian equity markets ended in deep red on Monday after more weak data reignited concerns about China's economy following a global stocks rout at the start of the year. Chinese shares ended down at their lowest since September, following data released over the weekend showed producer prices fell for a record 46th month and inflation remained muted at about half the government's target for 2015 in December, stirring concerns over a slowing economy. China guided its yuan currency stronger for a second straight session, adding to market confusion over what the central bank is trying to achieve. Seoul shares fell sharply on foreign fund selling after oil prices came under fresh selling pressure and Samsung Electronics indicated it may be due for another profit drop in 2016. The Japanese market was closed in observance of Coming of Age Day.