Indian equities declines for second straight session; Nifty ends below 7550 level

The carnage in Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another over half percent on Tuesday. Worries about the Beijing's ability to manage financial markets coupled with deepening fears about a protracted slowdown in the world's No. 2 economy continue to keep investors on edge after sharp losses over the past week. On the domestic front, sentiments got undermined on report that foreign investors sold shares worth Rs. 1,319.24 crore on January 11, 2016. Market participants also remained cautious ahead of Index of Industrial Production (IIP) for November and CPI Inflation data to be released later in the day. Besides, depreciation in Indian rupee too weighed down sentiments. The rupee surrendered its initial gains and was trading lower by 12 paise at 66.93 per dollar on fresh bouts of demand for the American currency from importers and banks amid volatile domestic equities. However, losses remained capped with finance minister Arun Jaitley’s statement that India can move to a high-growth trajectory of 10 per cent over the next two years with higher spending on infrastructure and by creating and strengthening banks.

On the global front, Asian stocks held near four-year lows and crude oil prices approached a 20 per cent drop in less than two weeks, as investors remained wary of China's volatile financial markets. On the other hand, European markets traded with smart gains bucking the selling pressure seen in some of the Asian markets. The German DAX rose 1.45 percent while the French CAC40 was up by a percent.

Back home, the benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the bourses failed to capitalize on the early momentum and slipped to lower levels in late morning session on expectation that consumer inflation probably edged up for the fifth straight month in December, driven by higher food prices, complicating the central bank’s task of steering monetary policy at a time of international deflation. The selling pressure accentuated in the mid afternoon trades as investors took to across the board risk aversion. 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, plunged by over half a percent to settle above the crucial 7,500 support level while, Bombay Stock Exchange’s Sensitive Index Sense deposed over hundred points and closed below the psychological 24,700 mark. Moreover, the broader markets too succumbed to the selling pressure evident in their larger peers and plunged by around a percent.

On the BSE sectoral space, the Bankex index remained the top laggard in the space and settled with over one and half percent cut followed by the Realty pocket which too went home with similar losses. While sectors like Teck and Oil & Gas too got pounded heavily in the session. On the flipside, Capital goods pocket managed to go home with moderate gains of around half a percent. Among other shares, aviation stocks witnessed buying interest as lower crude oil prices would boost earnings with aviation fuel comprising nearly 40 percent of the operating costs for the airlines, while energy stocks witnessed selling pressure after crude oil prices hit near 12 years low on oversupply glut. The market breadth was awfully pessimistic as there were 889 shares on the gaining side against 1822 shares on the losing side while 173 shares remained unchanged.

Finally, the BSE Sensex declined by 143.01 points or 0.58% to 24682.03, while the CNX Nifty ended down by 53.55 points or 0.71% to 7,510.30.

The BSE Sensex traded in a range of 24882.30 and 24597.11. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices made a negative closing; the BSE Mid cap index ended down by 0.94%, while Small cap index ended down by 1.03%.

The only gaining sectoral index on the BSE were Consumer Durables up by 0.14%, while Bankex down by 1.76%, Realty down by 1.51%, Metal down by 0.92%, Oil & Gas down by 0.85% and TECK down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.47%, Wipro up by 2.08%, Mahindra & Mahindra up by 1.59%, Adani Ports &Special up by 0.94% and Hindustan Unilever up by 0.87%. On the flip side, Axis Bank down by 2.67%, Tata Steel down by 2.24%, SBI down by 2.18%, ONGC down by 2.14% and Bharti Airtel down by 1.91% were the top losers.

Meanwhile, India Inc has raised over $3.16 billion from overseas markets in November 2015 down 9.5 per cent from a year ago, according to RBI data. Of the total borrowings, by way of external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs), $2.11 billion was raised through the approval process while $1.05 billion came through the automatic route.

Out of the total 57 borrowers, four raised the money through approval route, while the rest by way of automatic route. Through approval route, ONGC Videsh raised $1.78 billion for refinancing of an earlier ECB, Rural Electrification Corporation raised $300 million for on lending, Perkins India Private mobilized $34 million for working capital.

Among major borrowers in the automatic route, Railway Finance Corporation raised $400 million for refinancing of an earlier ECB, Power Finance Corporation raised $360 million for on-lending. Adani Hazira Port mopped up $80 million for port-related activity and Inbisco India $18.8 million for refinancing ECB and Vacmet India raised $16.36 million for import of capital goods.

The CNX Nifty traded in a range of 7,588.30 and 7,487.80. There were 14 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.90%, Wipro up by 1.86%, Mahindra & Mahindra up by 1.71%, Adani Ports &Special up by 1.37% and Hindustan Unilever up by 0.77%. On the flip side, IDEA down by 4.12%, PNB down by 3.30%, Bank of Baroda down by 3.16%, IndusInd Bank down by 3.07% and Hindalco Industries down by 3.02% were the top losersEuropean markets were trading in green; UK’s FTSE 100 increased 43.69 points or 0.74% to 5,915.52, France’s CAC surged 59.01 points or 1.37% to 4,371.75 and Germany’s DAX was up by 178.45 points or 1.82% to 10,003.52.

Asian equity markets ended mostly in red on Tuesday in cautious trading, as oil took another tumble and Chinese stocks seesawed before the release of trade data on Wednesday, which is expected to show further declines in both exports and imports. Worries about the Beijing's ability to manage financial markets coupled with deepening fears about a protracted slowdown in the world's second largest economy, fueling volatility in Asian markets. After oscillating between gains and losses, Chinese shares closed higher as the central bank stepped up efforts to stabilize yuan and China's State Council reportedly established a new working group to coordinate between financial and economic regulators. Japanese shares fell sharply to wipe out all of their 2015 gains on speculation the government may raise sales tax next year unless a serious situation prevails. A fresh rout in oil prices and China-related worries also sapped investors' appetite for risk as trading resumed following Monday's public holiday. Hong Kong shares finished down as technology and financial shares weighed, and following a sharp rise in Hong Kong short-term borrowing costs over the last two days.