Post Session: Quick Review

Tuesday turned out to be a daunting session for the Indian equity indices which got pounded by over one and a half percentage points, as investors opted to book profit after recent gains amid a lacklustre trade in Asia. After a cautious start, the domestic bourses never looked in recovery mood and ended the trade near intraday lows, breaching their crucial support levels of 23,500 (Sensex) and 7,150 (Nifty). Selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included banking, realty and energy.

Sentiments remained dampened since morning as investors remained jittery ahead of the government’s 2016/17 budget, which is due on February 29, amid hopes that policymakers will deliver a fiscally responsible budget that nonetheless steers spending to key areas such as infrastructure. Meanwhile, market participants are eyeing the developments regarding the crucial legislations like GST amendment bill in the ongoing budget session of Parliament. Sentiments also remained dampened on report that exports of over half of the sectors, out of the 30 closely monitored by the Commerce Ministry, were in the negative zone in January due to a fall in global prices and demand.

Selling got intensified after European counters have made a feeble start, with falling commodities prices and disappointing updates from Standard Chartered and BHP Billiton putting pressure on the market. Asian shares retreated from a seven-week high and ended mostly in red on Tuesday as the oil price rally that boosted global equity markets reversed, while the euro and sterling were hit by uncertainty over Britain's membership in the European Union.

Back home, traders also remained concerned on report that the government is likely to face a shortfall of Rs 40,000 crore in direct tax collection for the current fiscal. The total collection from the direct taxes which include personal income tax and corporate tax stood at Rs 5.47 lakh crore as on February 13 2016. This amount is 68.7 percent of the total budget target for the current fiscal year 2015-16.

Sentiments also weighed down on report that foreign institutional investors were net sellers to the tune of Rs 657 crore on Monday, as per provisional stock exchange data. Shares of three public sector oil marketing companies BPCL, HPCL and IOC edged lower amid concerns that government may impose customs duty on crude oil imports in the forthcoming Union Budget 2016-17. Shares of companies whose fortunes are linked to orders from Indian railways edged lower ahead of the Railway Budget for 2016-17.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and twenty points to end below the psychological 7,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around three hundred and eighty points to finish below its psychological 23,500 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around one and a half percentage points.

The market breadth remained in favor of decliners, as there were 717 shares on the gaining side against 1,890 shares on the losing side while 144 shares remain unchanged. (Provisional)

The BSE Sensex ended at 23410.18, down by 378.61 points or 1.59% after trading in a range of 23361.94 and 23851.51. There were 1 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.47%, while Small cap index down by 1.25%. (Provisional)

The losing sectoral indices on the BSE were Bankex down by 2.82%, Realty down by 2.49%, Energy down by 2.38%, PSU down by 2.32% and Finance down by 2.29%, while there were no gainers on the index.(Provisional)

The lone gainer on the Sensex was Asian Paints up by 0.87%. On the flip side, Coal India down by 4.00%, SBI down by 3.91%, Bajaj Auto down by 3.56%, ICICI Bank down by 3.33% and Axis Bank down by 3.12% were the top losers. (Provisional)

Meanwhile, amid fall in global prices and demand, exports of over half of the sectors out of the 30 closely monitored by the Commerce Ministry were in the negative zone in the month of January 2016. Outbound shipments of as many as 17 sectors, dipped last month. According to the data of the Commerce Ministry, top two sectors - engineering and petroleum products contracted 27.6 percent and 35.18 percent, respectively during the month.

Further, agri-products, which constitute over 10 percent of the country's total shipments, too recorded a negative growth during the month under review. Overall, eight out of 13 main agriculture products slipped into negative territory.  Exports of rice, cashew and oil meals fell 33.46 percent, 24.6 per cent and 77.5 percent, respectively.

On the other hand, exports of pharmaceuticals, plastic, carpet, tea and coffee have recorded positive growth in January 2016.  Exporters' body Federation of Indian Export Organisations (FIEO) has said that in order to boost the shipments, the government should announce incentives in the Budget. It said that the inverted duty structure in respect of various items may be given due consideration in the Budget as it not only effects exports but also the manufacturing sector.

India’s merchandise exports extending its decline for the fourteen months in row, plunged by 13.6 per cent in January 2016 at $21.07 billion as against $24.39 billion in January last year. Decline in these exports has been instrumental in dragging down India's overall merchandise exports. Due to continuous dip, the total merchandise shipments are expected to reach a figure of $270 billion in 2015-16.  India has aimed at taking exports of goods and services to $900 billion by 2020 and raising the country's share in world exports to 3.5 percent from 2 percent.

The CNX Nifty ended at 7109.55, down by 125.00 points or 1.73% after trading in a range of 7090.70 and 7241.70. There were 2 stocks advancing against 48 stocks declining on the index. (Provisional)

The only gainers on Nifty were Asian Paints up by 0.72% and ONGC up by 0.09%. On the flip side, Bank of Baroda down by 4.52%, Cairn India down by 4.25%, Coal India down by 4.08%, SBI down by 3.91% and PNB down by 3.77% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 56.06 points or 0.59% to 9,517.53, UK’s FTSE 100 shed 24.12 points or 0.4% to 6,013.61 and France’s CAC was down by 3.08 points or 0.07% to 4,295.62.

Asian markets ended mostly lower on Tuesday as the oil price rally that had boosted global equity markets reversed, while the euro and sterling were hit by uncertainty over Britain's membership of the European Union. Chinese stocks fell on profit taking after rallying more than 2 percent the previous day. Focus returned to the yuan after China's central bank weakened the currency by the largest margin in six weeks amid heightened ‘Brexit’ concerns. Japanese shares ended lower as the dollar gave up its earlier gains versus the yen. Hong Kong stocks tracked mainland China shares lower, with falls in property and utility sectors offsetting gains in energy and resources plays.