Global tremors continue to assault local benchmarks; Sensex ends below 24000 mark

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. Markets closed at their lowest level in 20 months due to risk aversion as crude oil resumed its slide and put pressure on Asian markets. Sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1325 crore on January 20, 2016. Furthermore, weakness in rupee, too was weighing down the sentiments, which after a good start has breached the 68 per dollar mark. However, losses remained capped 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. Moreover, with global headwinds hitting emerging markets as well, Finance Minister said volatility has become a global norm, but India can certainly grow at 8-9 per cent in a friendlier global climate. Some support also came with report that India is likely to remain an attractive destination for investors given its relative macro outperformance and the country is likely to clock a GDP growth rate of 7.5 per cent this fiscal.

On the global front, after getting a respite in the morning trades, Asian markets erased all of their gains to end lower on Thursday as crude oil prices resumed the downfall. Investors remained caution over the upcoming US macro-data points of jobless claims and crude oil inventory figures. Furthermore, European markets were oscillating between negative and positive zone as all eyes would be on the European Central Bank, which will meet for the policy meeting over interest rates later in the session.

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 indices dropped into the negative terrain sooner than later, lacking any significant upside cues. The indices moved only sideways thereafter but touched intraday lows in noon session, tracking weakness in rupee. In late afternoon session, the indices tried hard to move back into the positive territory and even got there but only for a brief period as investors took the opportunity to cash in on the bounce back. The bourses finally extended the declining run for the second session but finished way above the session’s lows. Eventually the NSE’s 50-share broadly followed index Nifty, suffered about half a percent cut to settle below the crucial 7,300 support level while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by about a hundred points and closed below the psychological 24,000 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with cuts of over quarter percent. On the BSE sectoral space, the Auto pocket was the top laggard in the space, languishing at the bottom of the table with 1.86% losses. Also the Oil & Gas counter bore the brunt of hefty selling pressure and plunged by over a percent. On the flipside, buying was evident in the rate sensitive Banking and IT counters which climbed by 1.35% and 0.72% respectively, while the Realty index too went home with around half a percent gains.  Meanwhile, Oil exploration majors like Reliance Industries and ONGC lost around 2 percent as the crude oil prices again tumbled after a short respite, while weakness in the Indian rupee has helped the export oriented IT stocks like Infosys and Wipro to gained about two percent.

The market breadth remained optimistic as there were 1328 shares on the gaining side against 1261 shares on the losing side while 182 shares remained unchanged.

Finally, the BSE Sensex declined by 99.83 points or 0.41% to 23962.21, while the CNX Nifty ended down by 32.50 points or 0.44% to 7,276.80.

The BSE Sensex traded in a range of 24351.83 and 23862.00. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices made a negative closing; the BSE Mid cap index ended down by 0.30%, while Small cap index ended down by 0.53%.

The top gaining sectoral indices on the BSE were Bankex up by 1.34%, IT up by 0.72%, TECK up by 0.51%, Realty up by 0.50% and Consumer Durables up by 0.40%, while Auto down by 1.86%, Oil & Gas down by 1.54%, FMCG down by 1.41%, Metal down by 1.24% and PSU down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 5.21%, Wipro up by 1.72%, Infosys up by 1.32%, SBI up by 1.24% and Tata Steel up by 1.23%. On the flip side, Maruti Suzuki down by 4.11%, Dr. Reddys Lab down by 3.86%, Tata Motors down by 3.70%, Coal India down by 3.24% and Sun Pharma down by 2.59% were the top losers.

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 traded in a range of 7,398.70 and 7,250.00. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 5.52%, Ultratech Cement up by 2.99%, Ambuja Cement up by 2.94%, Bank of Baroda up by 2.39% and Tata Steel up by 1.77%. On the flip side, Tata Motors down by 4.28%, Maruti Suzuki down by 3.89%, Dr. Reddys Lab down by 3.87%, ONGC down by 3.33% and Coal India down by 3.20% were the top losers.

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.