Barometer indices fail to maintain gain; end on a flat note

Indian stocks markets showed a volte-face on Thursday as what started on a promising note, ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory despite getting off to a gap-up opening. The sentiments were optimistic in early trade after the US Fed kept key rates unchanged and brought down the anticipated hikes in 2016 to two from its earlier December 2015 forecast of four. Emerging markets, including India, rejoiced as fears of massive exodus of foreign capital should abate with a more modest increase in the US rate trajectory expected over the medium-term. Gains were visible across Asian markets with the Shanghai Composite, Straits Times, Taiwan Weighted and the Hang Seng rallying between 0.5 percent - 1.5 percent. On the domestic front, sentiments also got some support from reports that foreign institutional investors (FIIs) pumped nearly $2 billion in Indian markets, as compared to a withdrawal of nearly $3 billion in the first two months of calendar year 2016. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee strengthened by 54 paise to 66.68 against the dollar at the time of equity markets closing on increased selling of the US currency by exporters & banks. However,  Investors squared off position in the dying hours of trade as sentiments turned pessimistic on concerns over Finance Minister Arun Jaitley's statement that it is ‘extremely difficult’ to achieve double-digit growth in the current global environment, though there is a scope for improvement from the current rate if reforms are carried on. Apart from this on the global front, sentiments also petered out after European counters made a weak start with all CAC, DAX and FTSE declining around half a percent in early deals. European stocks declined as a drop in airline Lufthansa and property group Immofinanz took the shine off an update from the U.S. Federal Reserve that boosted commodity share prices.

Earlier on Dalal Street, the benchmark got off to a rollicking opening as investors rejoiced after the US Federal Reserve kept key rates unchanged and brought down the anticipated hikes in 2016 to two from its earlier December 2015 forecast of four. The indices in no time climbed to intraday highs and traded around the psychological 24,900 (Sensex) and 7,550 (Nifty) levels through the morning trades. But the optimism started showing signs of easing in late hours of trade and profit booking in few sectors and sharp selling in pharma stocks weighed down the local bourses. Thereafter, the frontline indices kept losing momentum through the session and finally dipped into the negative terrain in the last leg of trade. Finally the NSE’s 50-share broadly followed index Nifty, added thirteen points gains to settle above the crucial 7,500 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by five points and closed below the psychological 24,700 mark.

On the BSE sectoral space, Oil & Gas counter remained the top gainer in the space with around two percent gains, followed by PSU and Capital Goods counters, which too gained good traction and went home with over a percent gain.  On the flipside, Realty counter languished at the bottom of the table with a cut of around a percent while the high beta sectors like Auto, Metal and Banks settled with moderate cuts. The market breadth remained pessimistic as there were 1303 shares on the gaining side against 1310 shares on the losing side, while 182 shares remained unchanged.

Finally, the BSE Sensex declined by 5.11 points or 0.02% to 24677.37, while the CNX Nifty rose 13.80 points or 0.18% to 7,512.55. 

The BSE Sensex touched a high and a low 24948.30 and 24576.52, respectively. The broader indices made a negative closing; the BSE Mid cap index ended up by 0.52%, while Small cap index gained 0.07%

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.26%, PSU up by 1.27%, Capital Goods up by 1.08%, TECK up by 0.88% and IT up by 0.88%, while Realty down by 0.94%, Auto down by 0.19%, Metal down by 0.10% and Bankex down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.23%, GAIL India up by 4.04%, Adani Ports &Special up by 3.09%, ONGC up by 2.95% and Larsen & Toubro up by 0.93%. On the flip side, Lupin down by 4.23%, Cipla down by 1.54%, HDFC down by 1.44%, HDFC Bank down by 1.25% and Mahindra & Mahindra down by 1.15% were the top losers.

Meanwhile, government in its effort to address difficulties faced by stakeholders and to improve the ease of doing business in the country, has introduced a bill in the Lok Sabha to further amend the Companies Act. Earlier, a government-appointed panel chaired by Corporate Affairs Secretary had suggested nearly 100 amendments to the new Companies Act to make it easier to do business in India. This is the second time that the current government would be amending the Companies Act, 2013 which was passed during the previous UPA regime.

The bill seeks to simplify private placement process, remove restrictions on layers of subsidiaries and investment companies, amend CSR provisions to bring greater clarity and exempt certain class of foreign entities from the compliance regime under the Act. The bill also proposes to allow unrestricted object clause in the Memorandum of Association dispensing with 'detailed listing of objects, self-declarations to replace affidavits from subscribers to memorandum and first directors' and is looking to omit provisions relating to forward dealing and insider trading from the Act.

Other recommendations proposed in the Bill include introduction of test of materiality for pecuniary interest for testing independence of independent directors, removal of requirement for annual ratification of appointment or continuance of auditor, align prescription for companies to have audit committee and nomination and remuneration committee with that of independent directors.

Presenting the Union Budget for 2016-17, Jaitley had said the proposed bill to amend the Companies Act 2013 will remove the difficulties and impediments to ease of doing business. He had added that the Bill would also improve the enabling environment for start-ups and the registration of companies will also be done in one day.

The CNX Nifty touched a high and low 7,585.30 and 7,479.40 respectively. 

The top gainers on Nifty were BPCL up by 5.69%, Ambuja Cement up by 5.58%, Tech Mahindra up by 4.41%, GAIL India up by 3.87% and ACC up by 3.31%. On the flip side, Lupin down by 4.64%, HDFC down by 1.68%, M&M down by 1.42%, Sun Pharma down by 1.39% and HDFC Bank down by 1.33% were the top losers.

European markets were trading in red; Germany’s DAX declined 132.04 points or 1.32% to 9,851.37, France’s CAC decreased 44.08 points or 0.99% to 4,418.92 and UK’s FTSE 100 was down by 6.14 points or 0.1% to 6,169.35.

Asian equity markets ended mostly in green on Thursday after the US central bank said it wouldn’t raise interest rates as quickly as expected. Investors seemed to find relief in the more dovish tone of the US Federal Reserve’s statement overnight. The Fed held its benchmark rate at between 0.25% and 0.50% - reflecting a more cautious view of US economy, weaker global growth and financial market volatility - and said it expects just two rate increases this year, down from the four it originally forecast. China stocks rose more than 1 percent as bargain hunting in technology stocks offset weakness in financial shares. Meanwhile, Japanese shares bucked the regional uptrend to end slightly lower as the dollar briefly hit a three-week low against the yen.