Indian Benchmarks unable to gather stem; end on a flat note

Indian equity indices commenced the week on a sluggish note as the benchmarks showcased an unenthusiastic performance on Tuesday and settled on a flat note. Sentiments remained dismal as worries over global economic growth prospects prompted marketmen to take profits off the table ahead of the European Central Bank's policy review on Thursday and US Federal Reserve's policy meeting next week. On the domestic front, sentiments were undermined with the MNI Consumer Sentiment index falling to 108.9 in February from 109.8 in January, indicating sluggish sentiment among end consumer as they grapple with volatile markets and deteriorating personal finances. Besides, depreciation in Indian rupee too dampened sentiments. Breaking its sixth-day rising streak, Indian rupee weakened by 31 paise to quote at 67.39 against the dollar at the time of equity markets closing on fresh demand for the American currency from importers and banks. Sentiments remained subdued with assistant Secretary for Global Markets in the US Department of Commerce, Arun Kumar said that a BJP has not moved as fast as expected to implement long-awaited reforms like the GST, Bankruptcy Law and Land Acquisition Bill. He asked American businesses to be patient since reforms cannot be implemented overnight. However, investor Sentiment got some support with international rating agency Fitch maintaining India's growth forecast at 7.5 percent for the financial year 2015-16 and projecting the GDP growth of 7.7 per cent in the FY2017, which is 0.3 per cent lower than its December forecast of 8 per cent, but much in line with the government’s projection.

On the global front, Asian markets ended mostly in red as Chinese trade figures rekindled global growth worries and revised Q4 GDP data from Japan underscored the challenges facing Premier Shinzo Abe in restoring growth. Profit-takers made the most of the latest surge in prices that has come on the back of upbeat US data and hopes that China will take further steps to kickstart the world's number-two economy. Meanwhile, European counters also made awful start with all major counters declining around a percent as investors turned cautious ahead of the European Central Bank's policy review on Thursday and US Federal Reserve's policy meeting next week.

Earlier on Dalal Street, after making a flat but positive start, Indian benchmarks indices showed some strength in early trades, but the sentiments turned pessimistic in late morning trades as investors booked profits in financials after sharp gains in the previous week while technology shares weakened tracking losses in technology shares on the Nasdaq. However, gains in Oil & gas and Metal stocks have restrained the markets to extend losses. Oil shares firm up tracking a rally in global crude oil prices after Brent crude touched a three-month high to touch $39.50 per barrel, while metal stocks gained for the eight straight day tracking sharp rally in global commodity prices. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 672 crore on March 04, 2016. The frontline gauges managed to pare the losses and rise above the neutral line in the dying hours of trade and settled in close proximity with previous closing levels. Finally the NSE’s 50-share broadly followed index Nifty, settled on a flat note with negative bias below the crucial 7,500 support level while Bombay Stock Exchange’s Sensitive Index Sensex added merely twelve points and closed above the psychological 24,650 mark. Moreover, the broader markets showed some resilience and settled on a positive note, outperforming their larger peers by quite a margin.

On the BSE sectoral space, Metal counter remained the top gainer in the space with over one and half percent gains followed by the high beta- Oil & Gas up index which ended with similar gains. On the flipside, the Banking and IT sectors languished at the bottom of the table with losses of 1.29% and 0.49% respectively. While counters like Teck, Capital Goods and Power too suffered some pounding. The market breadth remained pessimistic as there were 1318 shares on the gaining side against 1329 shares on the losing side while 144 shares remained unchanged.

Finally, the BSE Sensex gained 12.75 points or 0.05% to 24659.23, while the CNX Nifty declined 0.05 points to 7,485.30.

The BSE Sensex touched a high and a low 24793.62 and 24509.21, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.25%, while Small cap index gained 0.24%

The top gaining sectoral indices on the BSE were Metal up by 1.70%, Oil & Gas up by 1.50%, Realty up by 0.90%, Consumer Durables up by 0.58% and FMCG up by 0.39%, while Bankex down by 1.29%, IT down by 0.49%, TECK down by 0.42%, Capital Goods down by 0.30% and Power down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.49%, Reliance Industries up by 2.05%, Lupin up by 2.05%, ITC up by 1.66% and HDFC up by 1.56%. On the flip side, Maruti Suzuki down by 2.90%, SBI down by 2.52%, Hindustan Unilever down by 2.48%, ICICI Bank down by 1.66% and Cipla down by 1.41% were the top losers.

Meanwhile, Foreign Investment Promotion Board (FIPB) in its 232nd meeting chaired by Economic Affairs Secretary Shaktikanta Das has given approval for 16 Foreign Direct Investment (FDI) proposals out of the 34 on agenda amounting Rs 14,000 crore. The proposals include that of Japan's Nippon which sought approval for hiking another 23 per cent stake in Reliance Life Insurance to 49 per cent.

Besides, other proposals approved were of Yes Bank to hike foreign investment limit to 74 per cent, from present 41 per cent, making it the first bank to get approval for hiking FDI limit after the new regulations were announced in November. In November 2015, the government had removed sub-limit restrictions for foreign investments in private sector banks within the overall sectoral limit of 74 per cent.

Furthermore, FIPB cleared Sun Life Financial Investments Inc's proposal to hike stake in Birla Sunlife Insurance Company to 49 per cent, Aviva Life Insurance and Raheja QBE General Insurance Company’s proposal to hike foreign investment limit in their respective companies to 49 percent. FIPB also cleared the proposal of Tata AIA Life Insurance Company, Tata Sikorsky Aerospace and International Asset Reconstruction Co.

In order to boost FDI in the country, the government has earlier relaxed FDI norms in as many as 15 sectors, including defence, single brand retail, construction development, civil aviation and LLPs. According to data of Department of Industrial Policy and Promotion (DIPP), India has received $29.44 billion foreign direct investment (FDI), surging by 40 percent during April-December in the current fiscal.

The CNX Nifty touched a high and low 7,527.15 and 7,442.15 respectively. 

The top gainers on Nifty were Cairn India up by 6.67%, Hindalco up by 4.41%, GAIL India up by 3.50%, Vedanta up by 2.38% and Lupin up by 2.67%. On the flip side, Bank of Baroda down by 4.47%, SBI down by 2.81%, Hindustan Unilever down by 2.79%, Maruti Suzuki down by 2.76% and HCL Tech down by 2.71% were the top losers.

European markets were trading in red; Germany’s DAX decreased 137.08 points or 1.4% to 9,641.85, France’s CAC dropped 64.31 points or 1.45% to 4,377.98 and UK’s FTSE 100 was down by 59.64 points or 0.96% to 6,122.76.

Asian markets ended mostly lower on Tuesday as Chinese trade figures rekindled global growth worries and revised Q4 GDP data from Japan underscored the challenges facing Premier Shinzo Abe in restoring growth. Reports showed China's trade performance deteriorated sharply in February, with both exports and imports declining far more than expected last month. Exports fell 25.4 percent from a year earlier in dollar terms and imports dropped 13.8 percent to extend declines for the 16th straight month, suggesting the world's second-largest economy continued to suffer from weak global demand and a slowdown at home. Chinese shares recovered from steep losses as speculation of buying by state-backed funds helped offset plunging exports. Japanese shares ended at its lowest in nearly one week, as a stronger yen kept investors on edge and hit the stocks of exporters.