Post Session: Quick Review

Extending their previous session southward journey, Indian barometer gauges witnessed blood bath with both the major indices losing a percentage point and ending below their crucial 7,450 (Nifty) and 24,500 (Sensex) levels. After trading listless near their neutral lines for most part of the day’s trade, domestic gauges crashed like house of card in the last leg of trade, weighed down by falls in Asian markets and expectations of weak domestic corporate earnings. Sentiments remained down beat on report that United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 percent from 8.2 percent estimated earlier, largely due to slow progress in implementing reform policies.

Market participants failed to get any sense of relief with Finance Minister Arun Jaitley’s statement that India has emerged among the few large economies in the world with a promising economic outlook. He also added that Economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root.

Selling got accelerated after European counters making a weak start with all CAC, DAAX and FTSE were declining around a percent as they tracked their Asian counterparts and declining oil prices continued to dampen market sentiment. Asian markets ended mostly in red worries about slowing growth in the world’s second-largest economy kept a lid on gains in Asia.

Back home, selling was both brutal and wide-based as none of sectoral indices, barring energy and software, on BSE were spared. Counters, which featured in the list of worst performers, include realty, power, Industrials and Materials. Sentiments remained dampened with report that foreign portfolio investors (FPIs) sold shares worth net Rs 1,222 crore on January 14, 2016, as per provisional data released by the stock exchanges that kept pressurizing the markets. Depreciation in Indian rupee too weighed down sentiments. The rupee surrendered its initial gains and was trading down by 37 paise to 67.66 against the US dollar at the time of equity markets closing on bouts of dollar demand from importers.

Banking shares remained under selling pressure on hopes that October-December (Q3FY16) should mark as one of the toughest quarters particularly for PSU banks in the light of continued surmounting asset quality pressures. Consumer durables and auto counters continued to end lower for second straight session despite the government decided to set up a high-powered panel headed by Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission.

The NSE’s 50-share broadly followed index Nifty tumbled by around hundred points to end below the psychological 7,450 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around three hundred and twenty points to finish below its psychological 24,500 mark. Broader markets too struggled to get any traction and ended the session with a cut of around three percent.

The market breadth remained in favor of decliners, as there were 415 shares on the gaining side against 2,270 shares on the losing side while 146 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24455.04, down by 317.93 points or 1.28% after trading in a range of 24421.53 and 24912.64. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.68%, while Small cap index down by 3.13%. (Provisional)

The only gaining sectoral indices on the BSE were Energy up by 0.11% and IT up by 0.07% while, Realty down by 4.20%, Power down by 3.88%, Industrials down by 3.03%, Materials by 2.90% and Capital Goods down by 2.82% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 1.13%, Reliance Industries up by 0.86%, Dr. Reddys Lab up by 0.85%, Maruti Suzuki up by 0.60% and Hero MotoCorp up by 0.28%. On the flip side, SBI down by 6.03%, GAIL India down by 5.84%, BHEL down by 5.70%, NTPC down by 4.82% and Axis Bank down by 4.30% were the top losers. (Provisional)

Meanwhile, in order to address concerns over the entry of sub standard items and to simplify the process by setting shelf-life norms and relaxing the labeling guidelines, India’s food regulator Food Safety and Standards Authority of India (FSSAI) has issued new rules for importing products. These regulations may be called as Food Safety and Standards (Import) Regulations, 2016.

The regulator addressed two key issues raised by the food industry by easing labelling requirements and introducing a redressal procedure. According to the authority, the new regulations - except the packaging and labelling requirements and will also apply to export consignments from India that are rejected by foreign countries and returned.

As per the new norms, the companies must register with the Directorate General of Foreign Trade and possess a valid import-export code, apart from an FBO licence to import food. Besides, it has allowed the importers to affix a single, non-detachable sticker to rectify labelling errors related to the name and address of the importer, the FSSAI logo and licence number and the symbols for nonvegetarian and vegetarian food items. The earlier rules didn't allow such errors to be corrected. 

Further, no person shall import any food without an import license from the Central Licensing Authority in accordance with the procedure laid down in the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011. No food article will be allowed unless it has 60% of its shelf life remaining when it is cleared from customs, according to the new rules.

The CNX Nifty ended at 7437.80, down by 99.00 points or 1.31% after trading in a range of 7427.30 and 7566.50. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.55%, Tech Mahindra up by 1.27%, HCL Tech up by 1.11%, Reliance Industries up by 1.10% and Dr. Reddys Lab up by 0.72%. On the flip side, Vedanta down by 8.19%, GAIL India down by 6.07%, SBI down by 5.99%, PNB down by 5.73% and Cairn India down by 5.60% were the top losers. (Provisional)

European markets were trading lower; Germany’s DAX decreased 75.63 points or 0.77% to 9,718.57, UK’s FTSE 100 declined 52.16 points or 0.88% to 5,866.07 and France’s CAC was down by 45.61 points or 1.06% to 4,267.28.

Asian equity markets ended mostly in red on Friday after continued falls in the price of oil and poor Chinese bank lending figures undermined confidence. Chinese shares ended deep in the red after another late afternoon sell-off. While foreign direct investment into China accelerated in 2015, driven by strong expansion in investment into the service sector, new yuan loans extended by Chinese banks fell to 597.8 billion yuan ($90.76 billion) in December from 708.9 billion in November, adding to the gloom surrounding the world's second-largest economy. But, offering some stability to the Chinese market, the People's Bank of China (PBOC) set the yuan mid-point fix at 6.5637, comparatively flat in relation to Thursday's fix of 6.5616. Japanese stocks ended down in choppy trade, giving up early gains as oil prices turned lower in Asian deals and Bank of Japan Governor Haruhiko Kuroda said he isn't considering additional easing at the moment, blaming tumbling global oil prices for the sluggish price trend. Hong Kong shares closed at its lowest level in nearly 3-1/2 years, pounded by tumbling mainland stocks and a drop of the Hong Kong dollar against the US dollar.