Post Session: Quick Review

Monday turned out to be a daunting session for the Indian equity indices which got pounded by around one and a half percentage points, as traders remained cautious ahead of derivatives expiry on Thursday. Also, traders were patiently waiting for the Reserve Bank of India (RBI) monetary policy review due on April 5 amid hopes of a 25 basis points cut in interest rates. After getting a cautious start, the domestic bourses never looked in recovery mood and ended the trade at intraday lows, breaching their crucial support levels of 25,000 (Sensex) and 7,650 (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 realty, metal and consumer durables.

Market participants remained cautious with private report indicating Indian economy is expected to grow at 7.2 per cent in 2016-17, a tad lower than Central Statistics Office’s advance estimates of 7.6 per cent in the current fiscal due to weak investments and external headwinds. According to the report, Indian economy continues to face multiple challenges, and this is being reflected in high frequency data such as industrial production and trade. Some of the political concern too weighed on the trading sentiments, with the Centre imposing President’s rule in Congress-ruled Uttarakhand, which could impact the functioning of the second half of the budget session and hinder passage of any crucial Bill.

Global cues too remained sluggish with Asian counters ending mostly in red on Monday as investors turned cautious awaiting U.S. economic data and speeches by Federal Reserve officials this week that could signal more interest rate increases than expected. Easter Monday holiday in Europe keeps participation to a minimum.

Back home, depreciation in Indian rupee dampened sentiments. The rupee weakened by 8 paise to quote at 66.72 against the dollar in noon deals at the Interbank Foreign Exchange market on month-end demand for the American currency from importers and banks. Selling in metal counter too dampened sentiments on profit booking. Pharma stocks remained under pressure amid observations from the US FDA and the recent ban on over 300 combination drugs by the government.

Stocks related to software pack too edged lower despite global IT major, Accenture reporting strong Q2 results and raised revenue guidance for the financial year ending August 2016 (FY 2016). Gold and jewellary stocks remained in limelight, as Finance Minister Arun Jaitley has offered to walk the extra mile to ensure that small traders were not harassed but made it plain that luxury items cannot go untaxed. He has said that gold and other jewellery will be part of the Goods and Services Tax (GST) regime which will subsume the 1 percent proposed excise levy, as there cannot be a situation where essential items are taxed and luxury items like gold are left out.

The NSE’s 50-share broadly followed index Nifty tumbled by over hundred points to end below the psychological 7,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over three hundred and seventy points to finish below its psychological 25,000 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around one and half percentage point. The market breadth remained in favor of decliners, as there were 762 shares on the gaining side against 1,924 shares on the losing side while 166 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24966.40, down by 371.16 points or 1.46% after trading in a range of 24895.49 and 25432.94. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.36%, while Small cap index down by 1.65%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 4.35%, Metal down by 3.92%, Consumer Durables down by 3.48%, Basic Materials down by 2.24% and Capital Goods down by 2.08%, while there were no losers on the BSE sectoral indices. (Provisional)

The top gainers on the Sensex were NTPC up by 1.06%, Bajaj Auto up by 0.66%, HDFC Bank up by 0.16%, Wipro up by 0.14% and Infosys up by 0.10%. On the flip side, Tata Steel down by 4.90%, SBI down by 4.22%, Sun Pharma down by 4.14%, Tata Motors down by 3.57% and ICICI Bank down by 3.12% were the top losers. (Provisional)

Meanwhile, Department of Telecom (DoT) is looking to commence the auction for spectrum, including in 700 Mhz band, around mid-July, which may fetch the government a whopping Rs 5.36 lakh crore. DoT is expecting Cabinet approval on spectrum price by mid-May and issue notice for auction in June. It will be the biggest-ever auction in terms of value and is more than double the gross revenue of telecom services industry.

The Telecom Regulatory Authority of India (Trai) has suggested a plan for spectrum sale. Trai recommended a record high base price of Rs 11,485 crore per Mhz for the 700 Mhz band. According to the Trai paper, the cost of delivering mobile services in 700 Mhz band is approximately 70 per cent lower than 2100 Mhz frequency, which is widely used for 3G services.

Telecom Commission is meeting on March 28. Apart from spectrum auction the Telecom Commission in its meeting will deliberate upon half a dozen transformative norms for the industry including virtual network operators.

Spectrum is priced on the basis of its efficiency to carry mobile signals and ecosystem of device and equipment available for its usage. In 2016-17, the government expects revenue of Rs 98,995 crore from communication services, which includes proceeds from spectrum auction and other fees levied by the DoT.  Telecom service providers had gross revenue of Rs 2.54 lakh crore in 2014-15.

The CNX Nifty ended at 7615.10, down by 101.40 points or 1.31% after trading in a range of 7587.70 and 7749.40. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 1.46%, NTPC up by 1.41%, Power Grid up by 1.20%, Bosch up by 1.14% and Ambuja Cement up by 0.64%. On the flip side, Vedanta down by 9.19%, Hindalco down by 8.82%, Tata Steel down by 5.69%, Sun Pharma down by 4.37% and SBI down by 4.22% were the top losers. (Provisional)

Asian equity markets ended mostly lower on Monday as heightened expectations of another US rate hike in April tempered the initial optimism over higher oil prices and better-than-expected US GDP data for the October-December period. The world's largest economy grew at an annual rate of 1.4 percent in the last three months of 2015, compared to the second estimate of 1 percent. Trading volumes remained thin as Hong Kong remained closed for the Easter Monday holiday. Chinese shares surrendered early gains to end slightly lower, as losses in realty shares on reports of increased regulatory scrutiny of financing risk in the property market overshadowed initial optimism over the economy triggered by encouraging industrial profit data released over the weekend. But Japanese shares bucked the trend to finish higher as renewed weakness in the yen lifted shares of export-oriented companies.