Post Session: Quick Review

Indian markets though extended their gains to start of holiday truncated crucial F&O expiry week on a positive note, but the trade took a choppy turn in second half and the benchmarks pared most of their early gains, as selling pressure emerged in some high beta heavyweight stocks. Earlier, the markets got a strong start tracking positive global cues, there was good buying interest in banking, metals and healthcare stocks in early deals that supported the benchmarks come very close to 24700 (Sensex) and 7500 (Nifty). However, the momentum started declining in very second hour of trade with benchmarks paring good amount of gains, though markets acquired a range but in the second half there was sudden selling pressure that took the markets almost in red. But covering-up of short positions in view of an approaching January series expiry in the derivatives segment on Thursday, supported the markets. There was some concern with a poll conducted by global ratings agency Moody's Investor Service showing that market concerns over India's economic exposure to external risks have risen over the past seven months. Also, there was a clear consensus on expectations of further weakness for public-sector banks, with 89% expecting single digit loan growth for these banks, due to capital constraints. However, consensus view on India's economic growth prospects appeared reasonably upbeat, as over three quarters of the market participants polled believe that headline GDP growth will remain in a range of 6.5-7.5 per cent over the next 12-18 months.

On the global front, the major Asian markets after a jubilant start pared some gains but still managed to end all in green terrain on bets central banks will come to the rescue of turbulent financial markets fueled a rebound in global stocks. Apart from ECB President’s hint of stimulus, speculation that China could ease policy to soothe investors fueled a surge across risk-asset classes in the global markets. The European markets too made a cautious but positive start, extending their last session's rally.

Back home, markets gave up most of their gains in the late hour of trade after Europe showed signs of dithering after the oil declined again in day’s trade. On the domestic front, there was concern with report that Exports of 15 of the sectors out of the 30 closely monitored by the Commerce Ministry were in the negative zone in the month of December 2015. According to the data of the Commerce Ministry, top two sectors - engineering and petroleum products contracted by 15.68 per cent and 47.69 per cent, respectively during the month. Besides, the exports of Gems and Jewellery too shrank by about 7.75 per cent to $2.46 billion in the same month. Also, there was weakness in rupee that too weighed on the sentiments, the rupee erasing its initial gains turned lower on mild dollar demand from importers.

There were lots of result announcements that kept markets buzzing through the day, HDFC Bank gained one percent as its third quarter earnings matched expectations and profit increased 20 percent year-on-year to Rs 3,357 crore during the quarter, supported by operating profit, net interest income and other income despite higher tax cost. Spice Jet surged over 11% after the company reported net profit for the fourth consecutive quarter during weekend. The company posted a net profit of Rs.238.39 crore in the December quarter, against a net loss of Rs.275.02 crore in the year-ago period. In a big surprise, Cairn India surged over 5 per cent even as the company posted a 99 per cent YoY drop in net profit to Rs 9 crore in the December quarter, as a host of brokerages retained their ratings on the stock.

The BSE Sensex ended at 24480.75, up by 45.09 points or 0.18% after trading in a range of 24433.67 and 24650.57. There were 15 stocks in green against 15 stocks in red on the index. (Provisional)

The broader indices despite losing some strength outperformed the benchmarks; the BSE Mid cap index was up by 0.24%, while Small cap index gained 0.96%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.62%, Metal up by 1.55%, Realty up by 0.64%, IT up by 0.36%, TECK up by 0.24%, while, Capital Goods down by 1.06%, Auto down by 0.75%, Power down by 0.48%, Oil & Gas down by 0.29% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 2.59%, Sun Pharma Inds. up by 2.08%, ONGC up by 1.64%, Coal India up by 1.55% and ICICI Bank up by 1.50%. On the flip side, GAIL India down by 2.94%, Larsen & Toubro down by 2.71%, Hero MotoCorp down by 2.67%, Adani Ports &Special down by 1.67% and Tata Motors down by 1.61% were the top losers. (Provisional)

Meanwhile, global rating agency Moody's has said that India's credit profile will be unaffected by a small slippage in fiscal deficit target as it expects the government to continue fiscal consolidation and target lower deficits every year despite headwinds from global slowdown.

The fiscal consolidation trend that has been underway for a few years now, Moody’s said “will continue despite headwinds from global growth”. Moody's Investors Service Associate MD (Sovereign Risk Group) Atsi Sheth further said that a rise in corporate profits and bounce back in government revenues hold key to India meeting 3.5 per cent fiscal deficit target in 2016-17.  He said that “We see fiscal consolidation as a process, not an event determined on the day of the budget announcement. While we are not focused on a shift in the fiscal deficit target by a few basis points, we do anticipate that the government will target lower fiscal deficits every year than in the previous year.”

As per the fiscal consolidation path laid out by the government, deficit which was 4 per cent last fiscal is to be brought down to 3.9 per cent of GDP in current fiscal and further to 3.5 per cent in 2016-17.

Moody's Investors Service has said that a poll that Moody’s and its Indian affiliate, ICRA Limited, conducted in Mumbai in mid-January 2016 shows that market concerns over India's (Baa3 positive) economic exposure to external risks have risen over the past seven months.

Last year Moody’s upgraded India’s outlook to ‘positive’ from ‘stable’, but retained the credit rating at ‘Baa3’, just a notch above the junk grade. Moody’s had said it would consider a rating upgrade after 12-18 months depending upon improvement in macroeconomic parameters.

The CNX Nifty ended at 7436.40, up by 13.95 points or 0.19% after trading in a range of 7421.20 and 7487.15. There were 22 stocks on gainers side against 28 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were Cairn India up by 5.14%, Tata Steel up by 2.93%, Sun Pharma Inds. up by 2.37%, ICICI Bank up by 1.87% and Ambuja Cement up by 1.81%. On the flip side, Larsen & Toubro down by 2.67%, GAIL India down by 2.52%, Hero MotoCorp down by 1.99%, Tata Motors down by 1.80% and Adani Ports &Special down by 1.67% were the top losers. (Provisional)

European markets were trading mixed, Germany’s DAX increased by 6.1 points or 0.06% to 9,770.98, while UK’s FTSE 100 declined by 9.43 points or 0.16% to 5,890.58 and France’s CAC lost 2.41 points or 0.06% to 4,334.28.

Asian equity markets ended in green on Monday, as oil prices rose above $32 a barrel after the onset of a massive snowstorm on the US East Coast and Chinese shares began the week on a firm note amid indications that the Chinese government will hold the yuan steady for long. Investors also took heart from a rally on Wall Street Friday that helped US stocks notch their first week of gains in a month. Japan shares ended higher after a sharp rebound in crude oil prices helped global market sentiment, despite a firmer yen and the latest trade figures showing exports falling for a third straight month. The country's exports fell by 8% in December from a year earlier, steeper than estimates for a 7% decline and the biggest drop since 2012. Imports lost 18%, compared with expectations for a 16.4% decline as energy imports fell on cheaper oil prices. The markets in Malaysia are closed today in observance of Thaipusam Day.