Benchmarks end an extremely volatile day with over half a percent cut

It turned out to be a roller-coaster ride for the frontline indices, which declined over two percent in today’s session but finished the day with moderate losses of just over half a percent. After getting a cautious start, Indian benchmark traded below neutral line for most part of morning tread, but sharp selling was witnessed in mid afternoon session as investors took to across the board, spooked by Finance Minister Arun Jaitley’s proposals to reintroduce General anti-avoidance rule (GAAR) from April 2017, allocating Rs 25,000 crore for recapitalization of PSU banks that is much below Street’s estimates and proposal to levy 10% dividend distribution tax in the hands of investors. However, sharp recovery in late afternoon trade managed to take the indices into the positive territory but only for a brief period as fresh bouts of profit booking again brought the indices to lower levels by the end of trade. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of over half a percent to settle below the crucial 7,000 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over a hundred and fifty points and closed above the psychological 23,000 mark.

Moreover, the broader markets managed to escape heavy losses and settled on a flat note, yet outperformed their larger peers. On the BSE sectoral space, the high beta sectors like – IT and Teck pockets remained among top laggards in the space as they got lacerated by 2.11% and 2% respectively. While sectors like Capital Goods, Consumer Durables and Oil & Gas too got pounded heavily in the session. On the flipside, Banking, Realty and Metal pockets managed to go home with moderate gains.

On the global front, Asian market ended mostly in red on Monday after a weekend meeting of the Group of 20 economic policymakers ended with no new coordinated action to spur global growth and as solid US data revived expectations of a US rate hike before year-end.  The investors in the region lost confidence as concerns revived on China’s economic fundamentals, weighing on the regional stock markets. Furthermore, European stocks slipped in early trading, with Germany's DAX falling 1.5 percent, UK’s FTSE 100 dipping 0.91% and France's CAC 40 sliding 1.1 percent. Back home, the market breadth remained pessimistic as there were 1085 shares on the gaining side against 1398 shares on the losing side while 156 shares remained unchanged.

Finally, the BSE Sensex plunged by 152.30 points or 0.66% to 23002, while the CNX Nifty dropped 42.70 points or 0.61% to 6,987.05. 

The BSE Sensex touched a high and a low 23343.22 and 22494.61, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.03%, while Small cap index lost 0.07%.

The top gaining sectoral indices on the BSE were Bankex up by 1.07%, Realty up by 0.27%, Metal up by 0.15% and FMCG up by 0.10%, while IT down by 2.11%, TECK down by 2.00%, Capital Goods down by 1.99%, Consumer Durables down by 1.75% and Oil & Gas down by 1.50% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.79%, Reliance Industries up by 1.69%, ITC up by 1.65%, Lupin up by 1.42% and SBI up by 1.38%. On the flip side, ONGC down by 9.72%, Maruti Suzuki down by 4.88%, BHEL down by 4.21%, Infosys down by 3.33% and Larsen & Toubro down by 2.83% were the top losers.

Meanwhile, India’s exports which are in the negative zone since December 2014 will continue its slowdown for a while and are likely to start picking up from the fiscal year 2016-17, according to the Economic Survey tabled in Parliament on February 26. The survey said that the continuance of low commodity prices globally promises well for sustaining low trade and current account deficit. It further said that the trade policy has focused on promoting exports and thereby moderate the levels of trade deficit. The moderation in the levels of trade deficit had a useful effect on sustaining the moderation in the overall balance-of-payments outcome in the current fiscal.

The survey said that since the latter half of 2014, there has been a southward movement in the growth of exports from India and major countries of the world, as export growth of different countries moves in tandem with the world economic situation. India’s merchandise exports dipped for the 14th month in a row, down 13.6 percent in January to $21 billion due to fall in shipments of petroleum and engineering goods, although trade deficit showed improvement.

The survey further highlighted that the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turmoil and heightened risk aversion. However, India's external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices. Terming the current account deficit, the survey said that it is likely to be in the low range of 1-1.5 percent.

The CNX Nifty touched a high and low 7,094.60 and 6,825.80 respectively. 

The top gainers on Nifty were ICICI Bank up by 3.73%, Kotak Mahindra Bank up by 2.66%, Indusind Bank up by 2.42%, SBI up by 2.28% and ITC up by 1.63%. On the flip side, ONGC down by 10.76%, Cairn India down by 5.53%, BHEL down by 4.89%, Maruti Suzuki down by 4.29% and L&T down by 3.23% were the top losers.

European markets were trading in red; Germany’s DAX declined 154.49 points or 1.62% to 9,358.81, UK’s FTSE 100 decreased 55.7 points or 0.91% to 6,040.31 and France’s CAC was down by 48.87 points or 1.13% to 4,265.70.

Asian markets ended mostly lower on Monday, after a weekend meeting of G20 policymakers ended with no new coordinated action to spur global growth and as solid US data revived expectation of the Federal Reserve further raising rates before year-end. Chinese shares closed at one-month lows as some investors were disappointed by a lack of specific measures to boost growth during the Group of 20 meetings in Shanghai. Concerns over capital flows as China's central bank guided the yuan to its weakest level in three weeks, too weighed on Chinese shares. Japanese shares ended sharply lower as the dollar took a breather against the yen following Friday's steep climb on the back of upbeat US data. Economic reports painted a mixed picture, with Japan's industrial output rising for the first time in three months in January and housing starts figures coming in above forecasts, while retail sales fell slightly more than expected last month.