Post Session: Quick Review

Indian markets depicted a very choppy trade on Thursday, going in and out of the red terrain throughout the session, a day after a global rout left Indian markets badly bruised as oil, stocks and currencies plummeted across the world, with the Sensex and Nifty testing official bear market territory after stocks dropped more than 20% from their March 2015 highs. Markets after a robust start, started trimming their early gains with traders booking profit at the high levels, dragging the markets back in red in the very first hour of trade. Traders remained concerned about the global growth prospect and overlooked Reserve Bank of India Governor Raghuram Rajan’s statement that India is affected by the “same kind of jitters” impacting other world markets, but things will stabilize and people will look at stable emerging markets, including India. Markets that showed some signs of recovery in latter part of trade, succumbed to profit taking finally and ended with cut of about half a percent and Sensex and Nifty lost their crucial psychological levels of 24000 and 7300 respectively.  

Global cues mainly halted the initial rally of the domestic markets, though the US markets ended lower, being the party to the global sell-off, the Asian markets had made a good start on speculation the selloff that took global equities to the brink of a bear market may have gone too far. However, as the trade progressed all the regional markets pared gains and dipped into red, pushing back the gauges to the brink of a bear market after oil resumed its fall and the yen strengthened. The European markets after a cautious start were trading modestly in green, ahead of the European Central Bank meets, the first major monetary authority to review interest rates and policy since turmoil gripped markets at the start of the year.

Back home, benchmark indices turned choppy in the very early trade, mirroring concerns in the Asian equities with Shanghai cracking 3% after crude oil reversed its gains and slipped further. Though, in second half markets attempted a valiant recovery with Finance Minister Arun Jaitley’s statement that India is gradually transforming most of its taxation laws for a greater degree of stability and predictability. He also stressed that the proposed Goods and Services Tax (GST) is a major step in this direction.  Although, the overall sentiment remained weak as oil prices resumed their fall, some sectors such as banks and IT recovered from recent losses, while Auto and energy stocks were the biggest drag with market heavyweight Reliance Industries falling for another day despite good Q3 numbers. Amid a dismal trading session, Axis Bank surged by over 5 percent after the bank reported a 15% year-on-year (yoy) jump in net profit at Rs 2,175 crore in the October-December quarter (Q3FY16) on the back of higher net interest income and other income. There were some other good numbers too, mortgage lender Dewan Housing Finance reported a 16.4 percent rise in net profit at Rs185.90 crore for the third quarter ended December, 2015, on higher loan disbursements. Indiabulls Housing Finance registered 28.53% rise in its net profit at Rs 608.35 crore. However, there were some disappointments too that restricted any gains to the market; logistics major Gati reported 93.98% fall in its net profit at Rs 82 lakh for the quarter under review as compared to Rs 13.61 crore for the same quarter in the previous year. Hindustan Zinc reported 23.87% fall in its net profit at Rs 1811.39 crore. Broader markets though showed a mixed trend, with small cap stocks witnessing some buying interest.

The BSE Sensex ended at 23974.15, down by 87.89 points or 0.37% after trading in a range of 23862.00 and 24351.83. There were 13 stocks in green against 17 stocks in red on the index. (Provisional)

The broader indices made a mixed closing; the BSE Mid cap index was down by 0.27%, while Small cap index gained by 0.51%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.32%, IT up by 0.71%, Realty up by 0.60%, TECK up by 0.51%, Consumer Durables up by 0.48%, while Auto down by 1.78%, Oil & Gas down by 1.65%, FMCG down by 1.37%, Metal down by 1.00%, PSU down by 1.00% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 5.20%, Tata Steel up by 1.64%, Wipro up by 1.63%, Adani Ports & SEZ up by 1.46% and Infosys up by 1.39%. On the flip side, Maruti Suzuki down by 3.89%, Tata Motors down by 3.82%, Dr. Reddys Lab down by 3.71%, Coal India down by 3.04% and ONGC down by 2.86% were the top losers. (Provisional)

Meanwhile, Finance Minister Arun Jaitley has said that India is gradually transforming most of its taxation laws for a greater degree of stability and predictability and that the proposed Goods and Services Tax (GST) is a major step in this direction. In several areas,  Indian government has put out a model law encouraging their adoption by the states.

Jaitley further said that “It has been our effort in India to gradually transform and change most of our taxation laws, put to rest various disputes and issues which have been pending and make sure that the scope of discretions is eliminated.”

Jaitley said that the net impact of the GST, once it is put into force, is that there will be a seamless transfer of goods and services across the country and added that there will be uniformity in taxation rates. Besides, there will be much greater compliance and certainty and it's going to help India's GDP.

Since the past three sessions, the GST Bill has been pending in the Rajya Sabha. The opposition Congress wants no additional cess and a constitutional cap of 18 per cent on the tax. Although the Central government has agreed to the first condition and has even agreed to limit the GST, it refuses to put down the cap in the Constitution. The Centre, which had initially set a deadline for rolling out the tax as April 1, has been attempting to broker peace and get the Bill passed in the Budget Session.

The CNX Nifty ended at 7276.25, down by 33.05 points or 0.45% after trading in a range of 7250.00 and 7398.70. There were 22 stocks on gainers side against 28 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 5.66%, Ultratech Cement up by 3.03%, Ambuja Cement up by 2.73%, Bank Of Baroda up by 2.72% and Tata Steel up by 1.72%. On the flip side, Tata Motors down by 4.25%, Maruti Suzuki down by 4.00%, Dr. Reddys Lab down by 3.91%, Idea Cellular down by 3.66% and Coal India down by 3.30% were the top losers. (Provisional)

European markets were trading modestly in green, UK’s FTSE 100 was up by 9.1 points or 0.16% to 5,682.68, France’s CAC gained 11.7 points or 0.28% to 4,136.65 and Germany’s DAX increased by 15.26 points or 0.16% to 9,406.90.

Asian equity markets ended in red on Thursday, a day after global turmoil saw billions of dollars wiped off the value of shares. China's fragile stock markets ended sharply lower on Thursday as oil prices gave up the day's rally from 13-year lows. China's central bank has decided to inject over 600 billion yuan ($91.19 billion) into the financial system ahead of the Lunar New Year holidays, dashing hopes of a cut in the reserve requirement ratio for banks. Japanese stocks plunged deeper into a bear market, wiping out gains from early in the day as global equities rout resumed.