Post Session: Quick Review

Extending their previous session southward journey, Indian barometer gauges witnessed blood bath with both the major indices losing over a percent and ending below their crucial 7,050 (Nifty) and 23,100 (Sensex) levels. After a gap-down opening, markets traded in tight band for most part of the day’s trade on sustained capital outflows by foreign funds and selling by retail investors. Investors remained on sidelines ahead of the derivatives expiry and the Railway Budget tomorrow. Falling crude oil prices and weak global markets also dampened the domestic sentiment. Markets accelerated their downfall in last leg of trade to end near intraday lows.

Market participants remain concerned with Moody's Investors Service’s statement that India's fiscal metrics will remain weaker than its peers in the near term even if Finance Minister Arun Jaitley was to stick to fiscal consolidation roadmap. It said that the government's fiscal deficits have reduced over the last five years, and this has supported the stabilisation of government debt ratios. Without fiscal consolidation going forward, India's government finances will continue to compare poorly to peers. Meanwhile, the industry body Ficci has said that Indian economy is expected to grow at 7.4 percent in the current fiscal, slightly lower than 7.6 percent projected in advance estimates of Central Statistics Office.

Selling got intensified after European counters made awful start with all CAC, DAAX and FTSE were declining around two percent, as a brief recovery in oil prices lost momentum after comments from Saudi Arabia's oil minister. Asian markets ended lower as oil prices skidded after Saudi Arabia effectively ruled out production cuts by major producers anytime soon, sending investors into safe-havens such as the yen.

Back home, selling was both brutal and wide-based as none of sectoral indices, barring oil and gas, on BSE were spared. Counters, which featured in the list of worst performers, include metal, industrials and basic material. Sentiments also remained dampened with report that foreign portfolio investors (FPIs) sold shares worth net Rs 290 crore on January 23, 2016, as per provisional data released by the stock exchanges.

Banking shares continue to succumb under pressure for yet another day as there is no visibility with regards to asset quality and its impact on the fourth quarter results. Steel stocks too edged lower on report that the steel production has fallen by 1.5 percent to 7.4 million tonnes (MT) in January 2016 compared with the output in the same month last year. Energy counter too witnessed with ONGC and Cairn India losing over 2% each on further plunge in the crude oil prices after Iran said a proposal by Saudi Arabia and Russia for producers to freeze output was “ridiculous” as the Persian Gulf nation seeks to boost exports after years of sanctions. However, Shares of sugar companies rose today amid hopes of export boost.

The NSE’s 50-share broadly followed index Nifty tumbled by over ninety points to end below the psychological 7,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over three hundred and twenty points to finish below its psychological 23,100 mark. Broader markets too struggled to get any traction and ended the session with a cut of around a percent.

The market breadth remained in favor of decliners, as there were 831 shares on the gaining side against 1,1707 shares on the losing side while 169 shares remain unchanged. (Provisional)

The BSE Sensex ended at 23088.93, down by 321.25 points or 1.37% after trading in a range of 23057.45 and 23338.89. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.79%, while Small cap index down by 1.15%. (Provisional)

The lone gaining sectoral index on the BSE was Oil & Gas up by 0.21%, while Metal down by 2.62%, Industrials down by 1.85%, Basic Materials down by 1.80%, Healthcare down by 1.72% and Capital Goods down by 1.67% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 0.73%, Bharti Airtel up by 0.62%, Reliance Industries up by 0.51%, Hindustan Unilever up by 0.42% and Axis Bank up by 0.36%. On the flip side, BHEL down by 5.08%, NTPC down by 4.36%, Tata Motors down by 3.47%, HDFC down by 2.77% and ICICI Bank down by 2.65% were the top losers. (Provisional)

Meanwhile, concerned over the delay in the implementation of projects related to investments, industry body Assocham has said that this delay could adversely impact the Make in India programme launched by Prime Minister Narendra Modi. An Assocham study had observed that there are 1,160 manufacturing projects under implementation and of these 422 projects have reported either time over run or cost escalation or both that was worth Rs 8.76 lakh crore.

Assocham Secretary General D S Rawat has said that the investments have been facing long time delays mainly due to red tapism, which hurts the sentiment of investors. The delay in implementation bears a huge cost to the economy because every single investment has significant potential to contribute in economic growth and generate potential employment opportunities.

He suggested that the government needs to have a strong plan to prioritize for cleaning up of delayed projects in the form of effective implementation and it would be only possible when appropriate target-oriented roadmap has been created for authorities as well as investors. Therefore, government needs to limit the timeframe for each clearance authority, failing which it should be penalized. 

He further said that innovative financial models should be followed in the wake of low interest of developers and a difficult environment for raising and servicing the debts. For the industrial estates, he said to put a three-year moratorium on visits of inspectors and let self compliance be the norm.

The CNX Nifty ended at 7018.70, down by 90.85 points or 1.28% after trading in a range of 7009.75 and 7090.80. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 4.46%, Power Grid up by 1.90%, Mahindra & Mahindra up by 0.82%, Bharti Airtel up by 0.82% and Yes Bank up by 0.63%. On the flip side, BHEL down by 5.08%, NTPC down by 4.16%, Tata Motors down by 3.85%, Hindalco down by 3.07% and Vedanta down by 2.94% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX tumbled 182.22 points or 1.94% to 9,234.55, UK’s FTSE 100 decreased 84.72 points or 1.42% to 5,877.59 and France’s CAC was down by 66.49 points or 1.57% to 4,171.93.

Asian markets ended mostly lower on Wednesday as hopes for a coordinated production cut by OPEC faded and investors fretted over additional pressure on bank earnings in 2016. Trading sentiment remained sluggish after the major US averages fell over 1 percent overnight amid a spate of worries ranging from lower oil prices to bad loans in the energy sector. Japanese shares hit a one-week low, with sentiment dampened by a stronger yen, weaker U.S. and European data and the oil price decline after both Iran and Saudi Arabia ruled out a deal by major producers to cut oil output. Chinese shares ended higher on hopes that the upcoming meeting by China's legislature starting March 5 will result in more stimulus.