Benchmarks end a lackluster session with modest cut; broader markets outclass blue-chips

Profit booking coupled with sluggish global cues and caution ahead of key macro-economic data, weighed on the Indian benchmark indices on the first trading session of the new fiscal year 2016-17. Sentiments got undermined after government exceeded fiscal deficit target for the current financial year at the end of February but the final numbers for 2015-16 will be known once the March data is released. Further, investors turned jittery over the report that indicates the new fiscal (FY17) is likely to remain challenging for corporate India, with them unlikely to take up new investments on weaker credit conditions than in 2015-16. The report also believes the aggregate EBITDA levels of corporates will grow only modestly during 2016-17, given the budgetary focus on consolidation of fiscal deficit. However, the downside risks for the frontline indices was capped by reports that Infrastructure sector growth bounced back to a 15-month high in February, raising hopes of a pickup in industrial activity after three months of negative growth. The Index of Eight Core Industries, widely called the core sector index, was up 5.7% in February compared with 2.9% in the previous month and was the highest since 8.5% recorded in November 2014.

On the global front, Asian markets ended in red on Friday as investors began the new quarter with a cautious mood, with Japanese equities leading losses as the yen resumed gain and the Japanese 'tankan' manufacturing confidence index coming in worse than expected. However, there were some gains in metals after a gauge of Chinese manufacturing expanded for the first time since July. Meanwhile, European equities hit a one-month low on the first trading day of the quarter, with energy stocks tracking weaker oil prices and Osram leading the personal goods sector lower after it was dropped from Apple's top supplier list.

Earlier on Dalal Street, the benchmark began the April month on a somber note, as investors remained largely influenced by the daunting sentiments prevailing in Asian markets. The key gauges made some attempts to claw back into the green zone in mid morning trades but profit booking at higher levels dragged the key indices to the lowest point in the session. However, late short covering in some blue-chip stocks ensured that local bourses go home with relatively small losses. The NSE’s 50-share broadly followed index Nifty, declined by over a quarter percent to settle above the crucial 7,700 support level, while Bombay Stock Exchange’s sensitive Index, Sensex slipped by seventy two points and closed below the psychological 25,300 mark. However, broader markets managed to outperform the larger peers as the BSE’s midcap and smallcap indices settled with moderate gains . On the BSE sectoral space, the Oil & Gas index remained the top laggard in the space and settled with over a percent cuts followed by the Technology pocket which too went home with similar losses. On the flipside, Realty, Capital Goods and FMCG pockets managed to go home with the gains of over a percent. The market breadth remained optimistic, as there were 1723 shares on the gaining side against 816 shares on the losing side while 104 shares remained unchanged.

Finally, the BSE Sensex declined by 72.22 points or 0.28% to 25269.64, while the CNX Nifty dropped 25.35 points or 0.33% to 7,713.05. 

The BSE Sensex touched a high and a low 25354.94 and 25119.35, respectively. The broader indices made a negative closing; the BSE Mid cap index ended up by 0.22%, while Small cap index gained 0.93%

The top gaining sectoral indices on the BSE were Realty up by 2.97%, Capital Goods up by 1.24%, FMCG up by 1.01%, Power up by 0.77% and Consumer Durables up by 0.70%, while Oil & Gas down by 1.24%, TECK down by 1.23%, IT down by 1.01%, Metal down by 0.69% and Auto down by 0.66% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.77%, ITC up by 2.42%, Larsen & Toubro up by 1.82%, Axis Bank up by 1.12% and NTPC up by 0.89%. On the flip side, Bharti Airtel down by 4.46%, ONGC down by 2.79%, GAIL India down by 2.44%, TCS down by 2.41% and Adani Ports &Special down by 2.00% were the top losers.

Meanwhile, India's total external debt rose marginally to $480.2 billion at the end of December 2015, up $4.9 billion, or almost 1 percent, compared to that of $475.8 billion as of March 31, 2015, largely driven by private commercial borrowings and non-resident Indian (NRI) deposits, finance ministry said in its external debt report. However, it marked a decline from $483.2 billion at the end of September 2015.

However, year-on-year, the debt grew 4.7 per cent. Long-term external debt increased 2.2 per cent or $8.8 billion; short-term debt fell 4.6 per cent or $3.9 billion. Government (sovereign) external debt stood at $90.7 billion at December end 2015 while non-government debt amounted to $389.5 billion. The report said India's external debt has remained within manageable limits as indicated by external debt indicators. Further it said that the prudent external debt management policy of government of India has helped in containing rise in external debt and maintaining a comfortable external debt position.

Component-wise, the commercial borrowings at the end December 2015 stood at $183.6 billion a rise of 1.5 per cent. NRI deposits at $122.6 billion rose 6.5 per cent over end-March. Commercial borrowings and NRI deposits together accounted for 63.8 per cent of total external debt (long-term and short-term) at end-December. Commercial borrowings accounted for 38.2 percent of the total external debt, followed by NRI deposits at 25.5 percent and multilateral debt of 11.1 percent.

The report said that the 'policy continues to focus' on monitoring long- and short-term debt, raising sovereign loans on concessional terms with longer maturities, regulating ECBs, and rationalising interest rates on Non-Resident Indian deposits.

For valuation effect, the report said the US dollar appreciated against Indian rupee and other most major currencies between March 2015 and December 2015. Excluding the valuation effect, the external debt would have been higher at $488.1 billion at December end 2015.

The CNX Nifty touched a high and low 7,740.15 and 7,666.10 respectively. 

The top gainers on Nifty were Bank of Baroda up by 3.98%, ITC up by 2.36%, ACC up by 2.32%, BHEL up by 1.89% and Larsen & Toubro up by 1.70%. On the flip side, Bosch down by 4.26%, Bharti Airtel down by 4.23%, Tech Mahindra down by 2.72%, Idea Cellular down by 2.68% and TCS down by 2.47% were the top losers.

European markets were trading in red; Germany’s DAX declined 172.86 points or 1.73% to 9,792.65, France’s CAC tumbled 78.34 points or 1.79% to 4,306.72 and UK’s FTSE 100 was down by 75.79 points or 1.23% to 6,099.11.

Asian equity markets ended mostly lower on Friday follwoing weak close on Wall Street overnight coupled with a disappointing survey of Japanese business issued by the central Bank of Japan. Japanese shares closed down, as the yen continued to strengthen and the Bank of Japan's latest Tankan business sentiment survey showed conditions and the outlook among large manufacturers worsened in March. Hong Kong's shares fell the most in five weeks after rating agency Standard & Poor's downgraded its outlook for China and Hong Kong. However, Chinese shares bucked the downtrend, as stronger-than-expected business activity in both the manufacturing and non-manufacturing sectors added to confidence that Chinese growth has stabilized.