Global tremors continue to assault local benchmarks

It turned out to be a lackadaisical performance from the benchmark indices on Thursday as they failed to snap the session in the green territory and settled below the neutral line. Sustained selling by funds amid a weak trend in global markets following overnight sell-off in US markets on renewed jitters about the world’s top economy and broader concerns about global growth dampened the domestic sentiment. Investors remained cautious with Paul Donovan, global economist, UBS Investment Bank stating that India's economic growth may come under pressure in the near term, as agricultural output is expected to remain low due to the impact of El Nino. Sentiments weakened further with a key macro-economic data showed acceleration in inflation trends. The rise in wholesale price index (WPI) diminished hopes of a rate cut by the country's apex bank and subdued investors' sentiments. Besides, the depreciating rupee, which again breached the crucial 67-mark by falling 26 paise to trade at a one-month low of 67.11 against the dollar, too weighed on the domestic sentiment. However, losses remained capped with the Finance Minister Arun Jaitley's statement that the economy is moving in the right direction and the pace of growth will gather momentum in the coming quarters on the back of on-going structural reforms. On the global front, Major Asian stock markets retraced some of their downward slide but closed mostly in negative territory. Shares were weighed by the commodities and machinery sectors. European shares too fell on Thursday following two sessions of gains, as continued weakness in oil prices depressed sentiments. The prices briefly dipped below the key level of $30 amid worries over the global economic growth.

Back home, the benchmarks got off to a sedate opening tracking the dismal leads prevailing in Asian markets following a massive sell-off on Wall Street overnight amid the relentless slide in oil prices and concerns over growth as the Federal Reserve's latest Beige Book survey of economic conditions pointed to more sluggish US economic growth. 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 mid noon trades but only for a brief period, on account of better-than-expected third quarter earnings from Infosys. But some final hour profit booking followed by mild short covering ensured that the key gauges to end the session on consolidated note. Eventually, the NSE’s 50-share broadly followed index - Nifty settled with trivial losses of twenty five points below the psychological 7,550 levels while Bombay Stock Exchange’s Sensitive Index - Sensex shed eighty one points and closed below the psychological 24,800 mark. Moreover, the broader markets too failed to show any kind of fervor and plunged by over a percent, underperforming their larger peers by quite a margin.

On the BSE sectoral space, the Capital Goods pocket finished at the top laggard in the space, registering large cut of over one and half a percent as heavyweights like BHEL and L&T plummeted by 2.81% and 1.98% respectively. Banking, Realty and Power counters too remained among prominent losers in the space with over a percent cuts. On the flipside, information technology pocket showed some resilience for the session and attracted buying interests since IT major Infosys not only beat street estimates but revised its revenue guidance upwards. The market breadth remained pessimistic as there were 1045 shares on the gaining side against 1759 shares on the losing side while 104 shares remained unchanged.

Finally, the BSE Sensex declined by 81.14 points or 0.33% to 24772.97, while the CNX Nifty lost 25.60 points or 0.34% to 7,536.80.

The BSE Sensex traded in a range of 25018.46 and 24473.22. 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 1%, while Small cap index ended down by 1.27%.

The top gaining sectoral indices on the BSE were IT up by 1.93%, TECK up by 1.54% and FMCG up by 0.16%, while Capital Goods down by 1.77%, Bankex down by 1.67%, Realty down by 1.46%, Power down by 1.32% and Auto down by 1.27% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 4.28%, Lupin up by 3.02%, Asian Paints up by 2.39%, Cipla up by 0.84% and Dr. Reddys Lab up by 0.84%. On the flip side, Axis Bank down by 3.90%, Tata Steel down by 3.36%, BHEL down by 2.81%, Tata Motors down by 2.63% and SBI down by 2.56% were the top losers.

Meanwhile, Wholesale Price Index (WPI) inflation extending its deflationary trend for fourteenth straight month, declined by -0.73 percent in the month of December as against - 1.99 per cent in last month, as food articles, mainly vegetables, turned costlier and by tumbling oil prices. Build up inflation rate in the financial year so far was 0.74% compared to a build up rate of -0.89% in the corresponding period of the previous year. Also, October WPI inflation has now been revised to (-) 3.7 per cent from (-) 3.81 per cent.

As per government data, the Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) for the month of December, 2015 declined by 0.1 percent to 177.4 (provisional) from 177.6 (provisional) for the previous month. The reading which has been in the negative zone since November last year was mainly on the back of higher prices of onions, vegetables and pulses.

Component wise, inflation in primary articles, having weight of 20.12%, rose by 0.5 percent to 257.8 (provisional) from 256.5 (provisional) for the previous month. In the primary article index, the index for 'Food Articles' group rose by 0.6 percent to 272.7 (provisional) from 271.0 (provisional) for the previous month. The index for ‘Non-Food Articles’ group rose by 1.0 percent to 223.9 (provisional) from 221.7 (provisional) for the previous month. However, the index for ‘Minerals’ group declined by 2.4 percent to  212.3 (provisional) from 217.6  (provisional) for the previous month. Fuel & Power index having weight of 14.91%, declined by 0.6 percent to 176.8 (provisional) from 177.9 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weightage of 64.97%, declined by 0.3 percent to 152.6 (provisional) from 153.0 (provisional) for the previous month. Among the manufactured products, the index for 'Food Products' group  rose by 0.3 percent to 175.4 (provisional) from 174.9 (provisional) for the previous month. The index for ‘Paper & Paper Products’ group rose by 0.2 percent to 154.9 (provisional) from 154.6 (provisional) for the previous month. The index for ‘Non-Metallic Mineral Products’ group rose by 0.3 percent to 177.5 (provisional) from 176.9 (provisional) for the previous month. The index for ‘Transport, Equipment & Parts’ group rose by 0.1 percent to 138.0 (provisional) from 137.9 (provisional) for the previous month. The index for ‘Leather & Leather Products’ group rose by 0.4 percent to 144.4 (provisional) from 143.8 (provisional) for the previous month.

On the other side, the index for ‘Beverages, Tobacco & Tobacco Products’ group declined by 0.4 percent to 205.2 (provisional) from 206.0 (provisional) for the previous month. The index for ‘Textiles’ group declined by 0.1 percent to 139.7 (provisional) from 139.8 (provisional) for the previous month. The index for ‘Wood & Wood Products’ group declined by 0.7 percent to 196.4 (provisional) from 197.7 (provisional) for the previous month. The index for ‘Rubber & Plastic Products’ group declined by 0.3 percent to 145.8 (provisional) from 146.3 (provisional) for the previous month. The index for ‘Chemicals & Chemical Products’ group declined by 0.5 percent to 149.9 (provisional) from 150.6 (provisional) for the previous month. The index for ‘Basic Metals, Alloys & Metal Products’ group declined by 1.2 percent to 150.3 (provisional) from 152.2 (provisional) for the previous month.

The final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 176.9 as compared to 176.7 (provisional) and annual rate of inflation based on final index stood at -3.70 percent as compared to -3.81 percent (provisional) respectively

The trends represent softening of international prices. However, part of this might be due to slow demand in domestic markets, which might come in the way of revival of economic growth.

The CNX Nifty traded in a range of 7,604.80 and 7,443.80. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Infosys up by 4.99%, Lupin up by 3.35%, Asian Paints up by 2.43%, Tech Mahindra up by 2.09% and BPCL up by 1.57%. On the flip side, Axis Bank down by 4.16%, BHEL down by 3.17%, Tata Motors down by 2.96%, Tata Steel down by 2.90% and SBI down by 2.51% were the top losers.

European markets were trading in red; Germany’s DAX tumbled 231.78 points or 2.33% to 9,729.18, UK’s FTSE 100 decreased 105.31 points or 1.77% to 5,855.66 and France’s CAC was down by 103.67 points or 2.36% to 4,288.27.

Asian equity markets ended mostly in red on Thursday, following a massive sell-off on Wall Street overnight amid the relentless slide in oil prices and concerns over growth as the Federal Reserve's latest Beige Book survey of economic conditions pointed to more sluggish US economic growth. Japanese shares tumbled to hit a 3-1/2 month low as weak oil prices and global growth worries spurred demand for the yen. Downbeat machinery orders data also sapped investors' appetite for risk. Cabinet Office data showed that core machinery orders fell 14.4% in November from the previous month, falling for the first time in three months and underscoring businesses' reluctance to ramp up spending. Indonesia shares ended lower after a series of bomb blasts rocked the capital city. However, Chinese shares reversed early losses to end sharply higher. As part of efforts to prop up prices, the Shanghai and Shenzhen stock exchanges said they would closely monitor the selling activities by major shareholders and take action where appropriate.