Barometer indices fail to maintain early gains; end on a flat note

Indian stock markets have prolonged the lull for second straight day and finished the session on a disappointing note, as investors lacked conviction to pile up fresh positions. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory in last lag of trade despite getting off to a gap-up opening. Marketmen looked optimistic for most part of the session as global sentiments remained upbeat and most markets in Asia rallied amid a strong gain in global crude oil prices. However, the sanguinity in local markets was under check as profit booking in IT and rate sensitive Real Estate counters exerted downside pressure on the frontline indices.  Further, investors remained cautious as RBI Governor Raghuram Rajan talking on euphoria about India being the world's fastest-growing economy said that India still remains one of the poorest nations in the world on a per capita basis and have a long way to go before we reasonably address the concerns of each one of our citizens. However, losses remained capped with the report that Indian business leaders continue to be the most optimistic lot globally about the country’s economic outlook for the second consecutive quarter owing to a strong GDP growth, recent policy announcements and regulatory changes. According to the Grant Thornton International Business Report (IBR) a quarterly global survey of 2,500 business leaders across 36 economies, 90% of the respondents in India expressed confidence in the country's economic outlook. Meanwhile, Banking stocks, mainly public sector undertakings (PSU) rallied after a report suggested that the Reserve Bank of India (RBI) trimmed the list of debt-laden companies for loan provisioning in the fourth quarter ended March 31, 2016. On the other hand, IT pack came under pressure after Wipro reported weaker-than-expected earnings in the fourth quarter, Infosys too lost its pace and witnessed profit taking. Further, Realty counter declined after the repot that residential sales in top nine cities declined by 4% to 51,000 units in March quarter of FY2016.

On the global front, most of the Asian markets ended on firm note on Thursday as oil prices rallied over 4% overnight thanks to a smaller than expected increase in US crude inventories and hopes that producers may eventually agree ways to ease a global glut. Japanese shares rose as expectations of further policy easing from the Bank of Japan (BoJ) weakened the yen to near the 110 level, while China stocks declined as profit-taking in finance and manufacturing shares offset early gains by commodity stocks in the morning following oil's sharp overnight rise. Meanwhile, European markets struggled for direction in early trade ahead of the European Central Bank meeting, where policy makers are expected to underscore their commitment to boost growth and inflation in the eurozone.

Back home, Indian benchmark indices got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The indices in no time climbed to intraday highs and traded around the psychological 26,000 (Sensex) and 7,950 (Nifty) levels through the early trades. However, the bourses failed to capitalize on the early momentum and slipped to lower levels in late morning session. The key gauges suffered a setback in afternoon trades, as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Thereafter, the frontline indices kept losing momentum through the session and finally dipped into the negative terrain in the last leg of trade. However, the bourses managed to pare the losses in dying moments and settled in close proximity with previous closing levels. Eventually the NSE’s 50-share broadly followed index Nifty, ended lower by modest two points, settling above the crucial 7,900 support level, while Bombay Stock Exchange’s sensitive Index-Sensex- gained around thirty six points and closed above the psychological 25,850 mark.

Moreover, the broader markets too failed to show any kind of fervor and plunged by over half a percent, underperforming their larger peers by quite a margin. On the BSE sectoral space, Banking counter remained the top gainer in the space with around two percent surge, followed by the PSU and Oil & Gas indices which ended with moderate gains of around a percent. On the flipside, the IT, Realty and TECK sectors languished at the bottom of the table with losses of 1.53%, 1.37% and 1.09% respectively. The market breadth remained negative as there were 2732 shares on the gaining side against 1080 shares on the losing side, while 1496 shares remained unchanged.

Finally, the BSE Sensex gained 36.20 points or 0.14% to 25880.38, while the CNX Nifty declined by 2.70 points or 0.03 to 7,912.05.

The BSE Sensex touched a high and a low 26080.07 and 25783.12, respectively. The broader indices made a negative closing; the BSE Mid cap index ended down by 0.50%, while Small cap index declined 0.52%

The top gaining sectoral indices on the BSE were Bankex up by 1.95%, PSU up by 1.24%, Oil & Gas up by 0.67% and Metal up by 0.38%, while IT down by 1.53%, Realty down by 1.47%, TECK down by 1.37%, Power down by 1.09% and Capital Goods down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.26%, SBI up by 3.68%, Coal India up by 2.89%, Axis Bank up by 2.08% and Tata Motors up by 1.83%. On the flip side, Wipro down by 7.01%, BHEL down by 2.86%, Hero MotoCorp down by 2.00%, ITC down by 1.61% and Mahindra & Mahindra down by 1.59% were the top losers.

Meanwhile, the government has approved amending the Compensatory Afforestation Fund (CAF) Bill, 2015, which aims to ensure expeditious utilization of around Rs 40,000 crore for increasing forest cover in India which is currently lying unspent. The amendments include deleting some of environmental services for which credible model to assess their monetary value does not exist while it also provides for prior consultation with states for making a rule under it.

Furthermore, the amendments provide for use of monies realised from the user agencies in lieu for forest land diverted in protected areas for voluntary relocation from protected areas. The Bill is expected to be tabled in Parliament in the second half of the Budget session, which will commence from April 25.

The government said the legislation will ensure expeditious utilisation of accumulated unspent amounts available with the ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA), which is currently around Rs 40,000 crore, and fresh accrual of compensatory levies and interest on accumulated unspent balance, which will be of the order of approximately  Rs 6,000 crore per annum, in an efficient and transparent manner.

Earlier on May 8, 2015, the government had introduced the Compensatory Afforestation Fund Bill, 2015, in the Lok Sabha. However, on 13th May, 2015 Lok Sabha referred the Bill to the Department-related Parliamentary Standing Committee on Science & Technology, Environment & Forests. On 26th February, 2016 the Committee submitted its report to the Parliament. The Central Government after examination of the report of the Department-related Parliamentary Committee proposed to move official amendments in the Bill.

The CNX Nifty touched a high and low 7,884.10 and 7,912.05 respectively. 

The top gainers on Nifty were ICICI Bank up by 5.42%, SBI up by 3.31%, Coal India up by 3.23%, Bank of Baroda up by 2.98% and BPCL up by 1.62%. On the flip side, Wipro down by 7.31%, Bharti Infratel down by 3.73%, Ultratech Cement down by 3.64%, BHEL down by 3.12% and ACC down by 2.57% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 33.44 points or 0.52% to 6,376.82, France’s CAC slipped 14.82 points or 0.32% to 4,577.10 and Germany’s DAX was down by 10.78 points or 0.1% to 10,410.51.

Asian equity markets ended mostly higher on Thursday as oil prices rallied and the yen resumed its decline on expectations of further easing from the Bank of Japan next week. Most investors were reminded focused on the European Central Bank meeting due later in the day, although no change in policy is expected after unprecedented monetary stimulus at the March policy meeting. Japanese shares rose for a third day to hit a 2-1/2 month high, as oil prices bounced back and positive US housing data as well as expectations of further policy easing from the Bank of Japan (BoJ) weakened the yen to near the 110 level. However, China stocks closed lower on Thursday as afternoon profit-taking in finance and manufacturing shares offset early gains by commodity stocks in the morning following oil's sharp overnight rise.