Post Session: Quick Review

Indian equity benchmarks ended the choppy day of trade on quite note as investors opted to remain on sidelines ahead of January F&O expiry session. Markets traded near neutral line in early deals as traders remained concerned with the SBI Composite Index falling below the 50 mark to 47.3 in January. Manufacturing activity in the country dipped to a one-year low, suggesting moderation in growth. Also, the World Bank has warned that slowing emerging-market economies were hampering an oil recovery, and prices could sink further in a blow to a “fragile” global economy. .

However, markets gathered steam to recapture their crucial 24,600 (Sensex) and 7,450 (Nifty) levels in noon deals as some support came with Standard & Poor’s Rating Services stating that Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. But the rally proved short lived as market participants opted to book profit at higher levels. Risk appetite for equities was also subdued as crude oil prices resumed their slide towards $30 a barrel amid data showing profits earned by Chinese industrial firms in December fell for a seventh straight month.

Weak opening in European counter too dampened sentiments with CAC, DAX and FTSE all were trading in red in early deals, hit by a drop in Swiss drugmaker Novartis and German chemicals company BASF after their weak earnings updates. Royal Bank of Scotland also dropped after the bank warned its profits would be hit by a pension charge and US litigation provisions. Asian markets ended mostly in green led by upbeat earnings results and a bounce in crude oil, though Chinese markets ended in red.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 91.15 crore on January 25, 2016, as per provisional data released by the stock exchanges that kept pressurizing the sentiment. Depreciation in Indian rupee too dampened sentiments. The rupee was trading lower by 14 paise at 67.97 against the US currency at the time of equity markets closing at the Interbank Foreign Exchange market as the dollar firmed up overseas.

Steel stocks remained in lime light on report that bucking the global trend of a consistent decline in steel production, India is the only country among major steel producing countries such as China, Japan, South Korea and the US which recorded a positive trend in steel production and consumption in 2015. The World Steel Association (WSA) report notified that India world’s third largest steel producer rose 2.6% in 2015 to 89.6 million tonne (MT), against 87.3 mt in 2014. Buying in power stocks too edged higher after Coal India’s supply to the power sector increased by 6.8 percent to 299.10 million tonnes in the first 9 months of the current fiscal.

The NSE’s 50-share broadly followed index Nifty gained marginally to hold the psychological 7,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by five points to finish near its psychological 24,500 mark. Broader markets, however, traded with traction and ended the session with a gain of around half a percent.

The market breadth remained in the favour off decliners, as there were 1,354 shares on the gaining side against 1,201 shares on the losing side while 191 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24,492.39, up by 6.44 points or 0.03% after trading in a range of 24460.92 and 24645.70. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.49%, while Small cap index up by 0.59%. (Provisional)

The gaining sectoral indices on the BSE were Utilities up by 2.15%, Power up by 1.61%, Telecom up by 1.12%, Realty up by 1.08% and Healthcare up by 0.69%, while Capital Goods down by 0.69%, Energy down by 0.37%, Consumer Discretionary Goods & Services down by 0.21%, Bankex down by 0.19% and Oil and Gas down by 0.19% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.88%, Dr. Reddys Lab up by 2.11%, Tata Steel up by 1.81%, Tata Motors up by 1.23% and ITC up by 1.16%. On the flip side, BHEL down by 3.50%, Asian Paints down by 2.16%, Axis Bank down by 1.50%, Hero MotoCorp down by 1.38% and Hindustan Unilever down by 1.38% were the top losers. (Provisional)

Meanwhile, with an aim to boost manufacturing further, the government is planning to create coastal economic zones along the country's 7,500-km long coastline covering many states, ports and special economic zones having uniform policy. The idea is, however, at the conceptual stage. After firming up the proposal, the ambitious plan could be announced by the Prime Minister himself like in the case of 'Make in India'. In the present scenario, these coastal economic zones could come up in Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh.

Though, there are special economic zones where investors can set up their manufacturing base and get incentives like tax exemption, speedy regulatory clearance, round the clock power and security. The government wants to create coastal economic zones where investor will be provided host of incentives and facilities uniformly across many town, cities, ports and states.

These coastal economic zones would attract investment as well as workforce in order to create facilities to manufacture not only for domestic production but for exports in large quantities. The government thinks that there should be a port-led development as was done in China where cities were granted special status of open coastal cities which enjoyed special policies of the government. Though India has many ports, there is no cluster or a section of coastline that enjoys special status and incentives.

The CNX Nifty ended at 7437.75, up by 1.60 points or 0.02% after trading in a range of 7419.70 and 7477.90. There were 26 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 3.95%, Power Grid up by 2.93%, Idea Cellular up by 2.62%, Dr. Reddys Lab up by 2.17% and Tata Steel up by 1.86%. On the flip side, BHEL down by 3.51%, Ambuja Cement down by 2.41%, Asian Paints down by 2.25%, Tech Mahindra down by 2.07% and Axis Bank down by 1.68% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 34.8 points or 0.35% to 9,787.95, UK’s FTSE 100 declined 21.38 points or 0.36% to 5,890.08 and France’s CAC was down by 17.2 points or 0.39% to 4,339.61.

Asian equity markets ended mostly higher on Wednesday, with Japanese shares climbing to a near two-week high in the run-up to a BOJ meeting, after Wall Street stocks rose sharply overnight amid a rebound in oil prices, upbeat consumer confidence and home price data as well as better-than-forecast earnings from companies such as Procter & Gamble, Johnson & Johnson, 3M Co. and Coach Inc. Hong Kong shares rebounded, probably helped by modest improvement in other regional markets though investors remained nervous as oil pulled back again and as they waited on a policy decision from the Federal Reserve later in the day. Chinese shares trimmed early losses to end slightly lower, adding to the previous session's steep losses. Worries about economic growth resurfaced after official data showed profits earned by Chinese industrial enterprises declined at a faster pace in December, weighed down by sluggish domestic demand and severe overcapacity across many manufacturing industries. Industrial profits fell an annual 4.7 percent, marking the seventh straight month of declines.