Post Session: Quick Review

Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday and markets ended the session slightly in red as sentiment remained weak in the absence of any positive trigger amid sustained capital outflows by foreign funds. After trading in tight band for most part of the day’s trade, domestic gauges witnessed huge volatility in final hour of trade as its being the expiry session. Sentiments also remained dampened on report that the Reserve Bank of India (RBI) is expected to leave its key interest rate steady at 6.75% next week and only make one cut this year as rising inflation ties its hands.

However, losses remained capped with the report that business sentiment among Indian companies rose for the first time in three months in January, largely supported by the first increase in new orders since last June. The  MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, rose from 60.7 in December to 61.8 in January -- the highest since October 2015 as domestic orders strengthened.

On the global front, the US Federal Reserve kept interest rates unchanged which was in line with expectations but said that it was ‘closely monitoring’ global economic and financial developments. European markets were trading mostly in green in early deals as crude oil prices moved higher. Asian markets ended mostly in green after China’s central bank People's Bank of China announced a large injection of cash into the financial system to pre-empt a holiday-induced funding squeeze and offset rapid capital outflows. But, Chinese stocks fell on continued concerns about China's slowing economy.

Closer home, foreign institutional investors were net sellers in equities to the tune of Rs 367 crore on Wednesday, as per provisional stock exchange data. Depreciation in Indian rupee too dampened sentiments. The rupee depreciated by five paise to trade at 68.10 per dollar at the time of equity markets closing as against its previous close of 68.05 per dollar.

Telecom stocks remained under pressure after the Telecom Regulatory Authority of India (Trai) has proposed auction of 700 MHz spectrum at a reserve price of Rs 11,485 crore per MHz. This is the highest reserve price fixed for a band ever since the process for spectrum auction started nearly five years ago. However, select infra stocks remained on buyers’ radar as the government has approved the hybrid annuity model for building national highways, paving the way for construction of 28 projects worth Rs 36,000 crore this fiscal year. Also, the names of first 20 cities to be developed as Smart Cities will be announced by the government today.

The NSE’s 50-share broadly followed index Nifty slipped by just over ten points but hold the psychological 7,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over twenty points to finish below its psychological 24,500 mark. Broader markets too witnessed choppy and ended the session with marginal losses.

The market breadth remained in favor of decliners, as there were 1,238 shares on the gaining side against 1,312 shares on the losing side while 184 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24469.57, down by 22.82 points or 0.09% after trading in a range of 24400.52 and 24587.20. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.36%, while Small cap index down by 0.04%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.50%, Energy up by 1.17%, Oil and gas up by 0.88%, Utilities up by 0.88% and Healthcare up by 0.65%, while Telecom down by 2.41%, Capital Goods down by 1.72%, Banking down by 0.91%, Finance down by 0.90% and Consumer Durables down by 0.82% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 3.28%, Mahindra & Mahindra up by 2.06%, ITC up by 1.95%, Reliance Industries up by 1.76% and Sun Pharma Inds. up by 1.62%. On the flip side, Larsen & Toubro down by 2.72%, Bharti Airtel down by 2.32%, BHEL down by 1.97%, Adani Ports &Special down by 1.86% and ICICI Bank down by 1.69% were the top losers. (Provisional)

Meanwhile, in order to process the recommendations of the 7th Central Pay Commission, the government has set up a 13-member Empowered Committee of Secretaries (CoS) headed by Cabinet Secretary. The committee has secretaries from ministries of Home Affairs and Defence, department of personnel and training, pension and PW, revenue, expenditure, posts, health, and science and technology. Chairman of Railway Board, Deputy CAG and Secretary (Security) in the Cabinet Secretariat are also on the panel.

The Empowered Committee will function as a Screening Committee to screen the recommendations of the Commission after taking into account the views of the concerned stakeholders, viz, the Ministries/Departments, Staff Associations and the JCM. The Implementation Cell created in the Department of Expenditure shall function as Secretariat for the Empowered Committee of Secretaries. The final recommendations of the Empowered Committee of Secretaries will be submitted for approval of the Cabinet.

The implementation of the new pay scales is estimated to put an additional burden of Rs 1.02 lakh crore on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016. Finance Minister Arun Jaitley had said that there is no worry about fiscal deficit and government would be able to meet its target despite additional outgo on account of higher pay.

The CNX Nifty ended at 7424.65, down by 13.10 points or 0.18% after trading in a range of 7409.60 and 7468.85. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 5.49%, Cairn India up by 4.30%, Power Grid up by 3.94%, Hindustan Unilever up by 3.11% and Mahindra & Mahindra up by 2.33%. On the flip side, Idea Cellular down by 4.47%, Larsen & Toubro down by 3.01%, PNB down by 2.51%, Axis Bank down by 2.35% and Grasim Industries down by 2.30% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 2.86 points or 0.05% to 5,993.23 and France’s CAC gained 7.66 points or 0.17% to 4,388.02, while Germany’s DAX was down by 33.43 points or 0.34% to 9,847.39.

Asian equity markets ended mostly higher on Thursday, despite a poor lead from Wall Street after the Federal Reserve warned of slowing growth. Hong Kong shares closed higher after the People's Bank of China pumped the largest amount of cash into the financial system in nearly three years in a bid to prevent a possible cash crunch ahead of the week-long Lunar New Year starting on February 8. However, China stocks slumped again to a fresh one-year low as panic selling resumed. Japanese stocks fell in choppy trade, with volatility in oil prices and fears of a global slowdown continuing to hurt sentiment, while cautious investors looked forward to the conclusion of the Bank of Japan's policy meeting on Friday.