Post Session: Quick Review

Indian markets went through sharp sell-off on Wednesday, just after a day of witnessing some relief. The bulls that came out of their hide out in last session were running for cover and bears took the full control of the markets from the beginning. The sell-off came after IMF painted a gloomy picture of the global economy and sharp slowdown in China. Though, IMF retained India's growth forecast at 7.5 per cent for 2016 and 2017 but lowered China's forecast to 6.3 per cent in 2016 and further down to 6 per cent in 2017 even as global growth projection was revised down by 0.2 percentage point to 3.4 per cent for 2016. Sustained capital outflows amid weak trend on Asian bourses on renewed worries over global slowing economic growth and falling oil prices kept weighing the sentiments through the day. The rupee weakness too contributed to the fall, rupee came very close to breach the 68 mark falling to an intraday-low of 67.95 compared to Tuesday’s close of 67.65. Sentiment remained weak as foreign investors continued to sell domestic equities.

On the global front, while the US markets consolidated and ended mixed, the Asian markets resumed the slump, initiating global sell-off once again after crude oil dipped below $28 a barrel and the International Monetary Fund reinvigorated concerns about global growth. While the mainland China remained more restrained, the Hong Kong markets suffered severe sell-off. Japanese share declining for the 11th time in 13 days, slipped to their lowest level since September. The European markets joining the sell-off too made a weak start, with major indices losing 2-3 percent in early deals.

Sensex that fell below 24,000-mark by noon after the feeble start of the European markets, made good recovery in final hours, recovering more than 200 points from its day’s low to protect the 24000 bastion. However, the sell-off was brutal and broad based, with across the sectors selling pressure and realty, metal energy and banks suffering severe beating. The early decline in the market was led by energy and oil & gas shares, with Reliance Industries falling by over 4 per cent, despite reporting a strong Q3 numbers. RIL reported a record profit of Rs 7,218 crore on the back of a seven-year high refining margins of $11.5 per barrel. While all the sectoral gauges on the BSE ended in red, aviation stocks mostly defied the market wide sell-off and curtailed most of their losses on report that domestic passenger traffic rose 20.34 per cent in December last year over the same period in 2014 on account of the on-going tourists season. The high passenger carriage by the domestic airlines was mainly due to the ongoing tourist season in December.

Finally, the BSE Sensex ended at 24084.26, down by 395.58 points or 1.62% after trading in a range of 23839.76 and 24325.77. There were just 4 stocks in green against 26 stocks in red on the index. (Provisional)

The broader indices too ended with deep cuts; the BSE Mid cap index lost 1.85%, while Small cap index was down by 1.89%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 3.32%, Metal down by 2.73%, PSU down by 2.50%, Power down by 2.40% and Bankex was down by 2.28%. (Provisional)

The gainers on the Sensex were Hero MotoCorp up by 0.61%, Bajaj Auto up by 0.52%, Wipro up by 0.15% and Sun Pharma Inds. up by 0.11%. On the flip side, Adani Ports & SEZ down by 5.64%, SBI down by 5.08%, Reliance Industries down by 3.80%, Tata Motors down by 3.52% and Coal India down by 3.29% were the top losers. (Provisional)

Meanwhile, with an aim to tighten the regulations for setting power rates and promoting clean energy, better regulation of discoms, and faster roll-out of investments, the government has approved new power tariff policy. The move which will support the Swachh Bharat programme, will reflect concern for the environment and encourage renewable energy. A major objective of the policy are promotion of renewable generation sources and aim to create more competition, efficiency in operations and improvement in quality of power supply.

The new tariff policy has more than 30 amendments in the existing tariff policy which was formed as a continuation of the National Electricity Policy 2005. Under the new tariff policy, the power plants will have to use processed municipal waste water available in their vicinity. The policy will look to strengthen the regulatory mechanism so that discoms become more efficient and conscious towards their duties to consumers. The proposed policy will bring in several unique aspects which have not been touched in the past. It will allow distribution companies to buy any amount of power produced from the waste.

Besides, the policy also underlines norms for ancillary services. The central commission has been given the right to introduce the norms and framework for ancillary service which is necessary to support the power system or grid operation for maintaining power quality, reliability and security of the grid, including the method of sharing the charges.

The CNX Nifty ended at 7317.00, down by 118.10 points or 1.59% after trading in a range of 7241.50 and 7470.90. There were just 6 stocks on gainers side against 43 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were Idea Cellular up by 0.47%, Bajaj Auto up by 0.39%, Bharti Airtel up by 0.35%, HCL Tech. up by 0.09% and Hero MotoCorp up by 0.06%. On the flip side, Vedanta down by 7.15%, Hindalco down by 5.85%, Adani Ports &Special down by 5.65%, PNB down by 5.62% and SBI down by 5.11% were the top losers. (Provisional)

European markets were trading sharply lower in early deals, Germany’s DAX declined by 285.56 points or 2.95% to 9,378.65, UK’s FTSE 100 lost 166.98 points or 2.84% to 5,709.82 and France’s CAC was down by 139.62 points or 3.27% to 4,132.64.

Asian equity markets ended in red on Wednesday, with Japan's Nikkei entering the bear market, as global sentiment remained low on concerns over economic growth, China, and oil wallowed at its lowest since 2003 after IEA's warning that oil supply glut may last through 2016. The International Monetary Fund has lowered its global growth projections for this year and the next, citing a sharp slowdown in China trade and weak commodity prices that are hammering emerging markets and developing economies. Chinese shares ended lower after the China Securities Regulatory Commission approved a new batch of initial public offerings under a new IPO registration system, despite the central bank's pledge to ease short-term liquidity.