Post Session: Quick Review

Tuesday turned out to be a daunting session for the Indian equity indices which got pounded by over two percentage points. After a negative opening, the domestic bourses never looked in recovery mood and ended the trade at intraday lows, breaching their crucial support levels of 24,900 (Sensex) and 7,650 (Nifty). Selling was both brutal and wide-based as none of sectoral indices on BSE, barring consumer durables, could manage a green close. Counters which featured in the list of worst performers included banking, telecom and auto. Sentiments weighed down with Moody’s Investors Service’s report saying that inflation in India could rise if unfavourable weather pushes food prices again this season, if the rupee were to depreciate sharply or, and most relevant, if the gradual implementation of the Pay Commission’s salary increases leads to widespread wage and price increases.

Sentiments remained dampened despite the Reserve Bank cutting repo rate by 25 basis points, which was in line with market expectations. RBI Governor Raghuram Rajan also narrowed the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the MSF rate by 75 basis points and increasing the reverse repo rate by 25 basis points. RBI also reduced the minimum daily maintenance of the cash reserve ratio (CRR) from 95 per cent of the requirement to 90 per cent with effect from the fortnight beginning April 16, 2016, while keeping the CRR unchanged at 4.0 per cent of net demand and time liabilities (NDTL).

Selling got intensified after European counters have made a feeble start on Tuesday, with CAC, DAX and FTSE were trading with a cut of around two percent. Asian equity indices ended mostly in red pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for US interest rate rises.

Back home, depreciation in Indian rupee too dampened the sentiments. The rupee was at 66.50 per dollar at the time of equity markets closing as compared to a previous close of 66.21 per dollar. Traders failed to get any sense of relief with statement of Economic Affair Secretary Shaktikanta Das, who expecting an early passage of GST bill by Parliament has said that administrative machinery is ready to implement the new indirect tax regime, which will be a key component in improving ease of doing business

Interest rate-sensitive sectors shares such as bank, auto and realty edged lower on profit booking after the Reserve Bank of India (RBI) today reduced the repo rate or repurchase rate. On the flip side, aviation stocks viz. Spicejet, Jet Airways and Indigo edged higher on decline in crude oil prices. Further, Public sector oil marketing companies (OMCs) viz. BPCL, HPCL and IOC were trading higher as petrol price has been hiked by Rs 2.19 a litre and diesel by 98 paise per litre.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and fifty points to end below the psychological 7,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around five hundred and twenty points to finish below its psychological 24,900 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around one and a half percentage point.

The market breadth remained in favor of decliners, as there were 889 shares on the gaining side against 1,624 shares on the losing side while 126 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24883.59, down by 516.06 points or 2.03% after trading in a range of 24837.51 and 25372.44. There were 1 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.47%, while Small cap index down by 1.40%. (Provisional)

The lone gaining sectoral indices on the BSE were Consumer Durables up by 0.26%, while Telecom down by 3.71%, Bankex down by 3.21%, Industrials down by 2.83%, Auto down by 2.82% and Metal down by 2.81% the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 0.12%. On the flip side, Adani Ports &Special down by 6.54%, SBI down by 5.69%, ICICI Bank down by 5.37%, Bharti Airtel down by 5.16% and Tata Motors down by 4.69% were the top losers. (Provisional)

Meanwhile, the Finance Ministry has lined up a list of 16 PSUs for disinvestment in 2016-17 which could fetch the exchequer Rs 40,000 crore at current stock value. The list includes ONGC, Oil India and Coal India and state-owned companies such as NMDC, MOIL, MMTC, National Fertilisers, NHPC, NALCO and Bharat Electronics.

The list mostly contains PSUs which were up for sale in the last fiscal itself but volatile market conditions delayed the plan. Besides, the Cabinet approvals are also in place for some of these PSUs. In PSUs which have excess cash, buy back is also an option for which new approval is not needed.

At the current market price, 10 per cent stake sale in Coal India, NMDC and Nalco could fetch around Rs 18,000 crore, Rs 3,800 crore and Rs 1,000 crore respectively.  Besides, 5 per cent stake sale in ONGC, BHEL and Bharat Electronics could raise about Rs 9,000 crore, Rs 1,300 crore and Rs 1,400 crore.  A 10 per cent stake sale in NHPC and MOIL could fetch around Rs 3,000 crore and Rs 365 crore.  Further, a 15 per cent stake sale in MMTC, National Fertiliser and STC could raise about Rs 560 crore, Rs 200 crore and Rs 80 crore respectively.  Furthermore, the government is considering a 5 per cent stake sale in Rashtriya Chemicals & Fertilizers, 12.03 per cent in ITDC and a follow on public offer of NBCC

For the current fiscal the Budget has set a disinvestment target of Rs 56,500 crore. Of this, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore is projected to come from strategic sale in both profit and loss-making companies.

The CNX Nifty ended at 7603.20, down by 155.60 points or 2.01% after trading in a range of 7588.65 and 7736.30. There were 4 stocks advancing against 47 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech. up by 0.40%, BPCL up by 0.38%, Power Grid up by 0.32%, Lupin up by 0.17%. On the flip side, Adani Ports &Special down by 6.72%, ICICI Bank down by 5.51%, SBI down by 5.32%, Bharti Airtel down by 5.16% and Tata Motors - DVR down by 5.02% were the top losers. (Provisional)

European markets were trading in red terrain; Germany’s DAX tumbled 254.47 points or 2.59% to 9,567.61, France’s CAC declined 98.48 points or 2.27% to 4,246.74 and UK’s FTSE 100 was down by 98.05 points or 1.59% to 6,066.67.

Most of the Asian markets suffered sharp sell-off on Tuesday, as the oil resumed its plunge on uncertainty of an output cut at the upcoming OPEC and Non- OPEC members meet. Traders also remained concerned ahead of the releases of US Federal Reserve’s minutes from its latest meeting on Wednesday and struggled to find fresh reasons to buy. The Japanese markets witnessed cut of over two percent after the yen jumped to a 17-month high.  Also, the latest survey from Nikkei revealed that activity in Japan's services sector remained unchanged in March. The Hong Kong markets too lost around two percent, however the Shanghai Composite Index that resumed trading after a Monday holiday, bucked the regional trend and gained 1.4 percent, as investors digested better-than-expected manufacturing surveys released over the weekend.