Post Session: Quick Review

Extending their previous session southward journey, Indian barometer gauges witnessed blood bath with both the key indices losing over a percent and ending below their crucial 7,300 (Nifty) and 24,100 (Sensex) levels, as fears of a global slowdown led investors to dump risky assets. After a gap-down opening markets traded in tight band for most part of the day’s trade as sentiment remained weak in the absence of any positive trigger amid sustained capital outflows by foreign funds. Markets managed to pare some of their initial losses in last leg of trade but it was not enough to take markets into green.

Traders remained concerned with India's economy growing by 7.3 percent in the third quarter ended December 2015, compared to 7.7 percent growth in the second quarter. Moreover, investors ignored Central Statistics Office (CSO) statement that Indian economy will grow at a 5-year high of 7.6 percent in the fiscal ending March, compared with 7.2 percent a year earlier, overtaking a slowing China, on the back of improvement in manufacturing and farm sectors. Market participants also failed to draw any sense of relief with a private report stating that consumer sentiments in India rose for the first time in the last four months by 1.2 percent to 109.8 in January as households have been relatively upbeat about the purchasing environment.

On the global front, European markets were trading mostly in red in early deals after Japanese stocks plunged and yields on the country’s benchmark bonds turned negative as the global “risk-off” rout hit Asia. Asian markets ended lower, following overnight losses in the US following as oil prices tanked again on fears of a deepening economic slowdown.

Back home, selling was both brutal and wide-based as none of sectoral indices, barring utilities and oil and gas, on BSE were spared. Counters, which featured in the list of worst performers, include software, technology and metal. Sentiments also remained dampened with report that foreign portfolio investors (FPIs) sold shares worth a net Rs 84.56 crore on February 8, 2016, as per provisional data released by the stock exchanges. Depreciation in Indian rupee too weighed down sentiments. The rupee once again broke below the 68-mark by depreciating 15 paise to 68.09 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange due to increased demand for the American unit from importers and banks.

Software counter played spoil sport for the domestic benchmarks, down by around three and a half percent after Cognizant Technology Solutions said at the time of announcement of its Q4 December 2015 results that the company expects revenue to remain flat on sequential basis in Q1 March 2016. Banking counter too edged lower after Punjab National Bank (PNB) reported disappointing Q3 numbers. The company reported a net profit of Rs 51.01 crore for Q3FY16 as compared to a net profit of Rs 774 crore in the corresponding quarter previous year.

The NSE’s 50-share broadly followed index Nifty tumbled by around Ninety points to end below the psychological 7,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over two hundred and sixty points to finish below its psychological 24,100 mark. Broader markets too struggled to get any traction and ended the session with a cut of around one and a half percent.

The market breadth remained in favor of decliners, as there were 848 shares on the gaining side against 1,749 shares on the losing side while 121 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24020.98, down by 266.44 points or 1.10% after trading in a range of 23919.47 and 24111.19. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.91%, while Small cap index down by 1.34%. (Provisional)

The only gaining sectoral indices on the BSE were Oil & Gas up by 0.20% and Utilities up by 0.15%, while IT down by 3.40%, TECK down by 2.98%, Metal down by 2.47%, Auto down by 1.78%, Realty down by 1.50% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 4.05%, Sun Pharma up by 2.30%, NTPC up by 1.87%, Bajaj Auto up by 1.29% and ONGC up by 1.21%. On the flip side, Coal India down by 4.59%, Tata Motors down by 4.07%, Dr. Reddys Lab down by 3.93%, TCS down by 3.61% and Infosys down by 3.23% were the top losers. (Provisional)

Meanwhile, with an aim to meet the targets in 2016-17, the government is revamping the disinvestment process, when a tighter budget is expected to leave little room for missing revenues as the Centre has done in the current fiscal. In order to broaden the decision-making process and quickly identify companies for sale, the disinvestment department has roped in the Department of Economic Affairs from the finance ministry and the Department of Public Enterprises who is the nodal agency for all central public sector enterprises. The new disinvestment policy will not be in isolation and only from the view of selling small stake in already listed firms. The government is looking to bring more firms so that they have a ready pipeline.

Besides, the government plans to push profitable subsidiaries of central public sector enterprises to list on the bourses. The government is already pushing firms such as Nalco and Coal India to go for buybacks. The other companies that the government may seek to persuade in this manner include Bharat Heavy Electricals and mining firm NMDC. In this fiscal, the government had kick-started the disinvestment process early with a 5% stake sale in Rural Electrification Corporation in April, followed possible to meet fiscal targets while meeting Seventh Pay Commission obligations

Earlier, Finance Minister Arun Jaitley has said that during the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of Seventh Pay Commission recommendations and One Rank One Pension Scheme. The government is committed to keep the fiscal deficit at 3.5% of the gross domestic production in 2016-17.

Since the beginning of the current fiscal, the government has raised about Rs 13,300 crore from divestment against the target of Rs 69,500 crore, of which Rs 28,500 crore was to come through strategic sale.

The CNX Nifty ended at 7298.20, down by 89.05 points or 1.21% after trading in a range of 7275.15 and 7323.45. There were 16 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 4.65%, Sun Pharma up by 2.20%, NTPC up by 2.11%, ONGC up by 1.92% and GAIL India up by 1.47%. On the flip side, PNB down by 6.95%, Bank of Baroda down by 4.86%, Tech Mahindra down by 4.76%, HCL Tech down by 4.62% and Coal India down by 4.36% were the top losers. (Provisional)

European markets were trading mostly in red; Germany’s DAX decreased 39.95 points or 0.44% to 8,939.41 and France’s CAC was down by 22.08 points or 0.54% to 4,044.23, while UK’s FTSE 100 was up by 24.42 points or 0.43% to 5,713.78.

Asian markets ended in red on Tuesday after US and European markets fell sharply overnight on concerns over slowing global growth and speculation over the Federal Reserve raising rates further in March. Japanese shares fell after a sell-off in the European banking sector triggered safe-haven bids for the yen, sending dollar crashing through the 115-yen level to its lowest since November 2014. Many of the regional markets, including China, Hong Kong, South Korea, Malaysia, Singapore and Taiwan were closed for the Lunar New Year holiday.

Nikkei 225 declined 918.86 points or 5.4% to 16,085.44 and Jakarta Composite was down by 30.32 points or 0.63% to 4,768.63.