Benchmarks end a disappointing day with half a percent cut

Indian equity indices commenced the F&O expiry week on a disturbing note as they went on to extend the declining streak for the second successive session, market participants remained on the sidelines lacking conviction amid slips in crude oil prices and depreciating rupee. Indian rupee was trading lower by 21 paise at 66.71 against the dollar at the time of equity markets closing on sustained demand for the US currency from importers.  Besides, traders remained cautious ahead of the April derivative contracts on Thursday and policy decisions from the Bank of Japan and US FOMC this week. However, investors got some confidence with PHD Chamber of Commerce’s report that India's economy is likely to clock nearly 8 per cent growth in the current fiscal on the back of robust private consumption, which has benefited from lower energy prices and higher real incomes. Some support also came with the report that foreign Direct Investment into India touched the ‘highest ever’ mark of $51 billion during the April-February period of last fiscal ended March 31, 2016. Meanwhile, stocks of Public sector banks (PSBs) came under pressure after the report that the PSBs will not be able to raise funds from the markets and government will have to provide capital support to them in the near term given their weak solvency position. 

On the global front, most of the Asian markets ended lower on Monday as investors locked in some recent gains ahead of policy decisions by the U.S. Federal Reserve and the Bank of Japan as well as major earnings reports and economic data from Japan and China expected later in the week. Chinese shares declined on concerns over risks in debt and commodities markets after the official Xinhua News Agency reported another scam in China's risk-laden shadow banking sector involving about 1 billion yuan ($A199 million) of investor funds, while Japanese shares fall, even as the safe-haven yen hit a three-week low against the dollar on expectations the Bank of Japan could start lending to banks at negative rates after its two-day policy review ending on April 28. The European markets too mirrored similar trends in early deals with the DAX shrinking around a percent, being the top laggard. On the other hand, the screen trading for US index futures indicated that the Dow could open on a pessimistic note.

Back home, the local benchmark got off to a weak start as investors turn jittery and booked profits ahead of the beginning of the second part of Parliament’s Budget session, as concerns over passage of proposed Bills persisted and focus shifted to key Goods and Services Tax Bill, which is considered as the country’s biggest indirect tax reform since Independence. The frontline indices kept losing steam thereafter and even drifted to the lowest point in the session in late afternoon trades. Though, the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of over half a percent to settle below the crucial 7,900 support level, while Bombay Stock Exchange’s sensitive index, Sensex slipped by over one hundred and fifty points and closed below the psychological 25,700 mark. Moreover, the broader markets too failed to show any kind of fervor and closed with losses of around half a percent. On the BSE sectoral space, the high beta - Power and Metal pockets remained among top laggards in the space as they got lacerated by around a percent while sectors like PSU, Oil & Gas and Auto too got pounded heavily in the session. On the flipside, IT and Teck pockets managed to go home with the moderate gains. The market breadth remained pessimistic as there were 1083 shares on the gaining side against 1532 shares on the losing side while 149shares remained unchanged.

Finally, the BSE Sensex declined by 159.21 points or 0.62% to 25678.93, while the CNX Nifty dropped 44.25 points or 0.56% to 7,855.05. 

The BSE Sensex touched a high and a low 25891.03 and 25585.93, respectively. The broader indices made a negative closing; the BSE Mid cap index ended down by 0.14%, while Small cap index was lower by 0.39%.

The top gaining sectoral indices on the BSE were TECK up by 0.30% and IT up by 0.18%, while Power down by 1.43%, Metal down by 1.06%, PSU down by 0.95%, Oil & Gas down by 0.95% and Auto down by 0.87% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.63%, TCS up by 1.29%, Bajaj Auto up by 0.71%, Hindustan Unilever up by 0.64% and Adani Ports &Special up by 0.61%. On the flip side, Reliance Industries down by 2.18%, Maruti Suzuki down by 2.18%, NTPC down by 2.13%, ONGC down by 1.85% and Tata Steel down by 1.77% were the top losers.

Meanwhile, the Civil Aviation Ministry expects to come out with the new civil aviation policy next month. The inter-ministerial consultations on the revised draft policy are progressing and once these are completed, the ministry hopes to give the final touches and move the Cabinet for a nod.

The policy was expected to be finalised in the last financial year as certain proposals were to be implemented from April 1, 2016. However, differences over various issues including the 5/20 rule for domestic carriers have delayed finalisation of the policy. The issue of 5/20 international flying norm has witnessed extensive debates with legacy carriers opposing any changes to the rule, while start-up airlines are against continuing with the requirement.

The draft policy, unveiled in October 2015, seeks to bolster the country's aviation sector which has high growth potential. It had suggested tax incentives for airlines, maintenance and repair works of aircraft, increasing FDI limit for foreign airlines, setting up of no-frills airports and providing viability gap funding for carriers to bolster regional air connectivity.

The CNX Nifty traded in a range of 7,911.00 and 7,827.00. There were 21 stocks advancing against 29 stocks decliners on the index.

The top gainers on Nifty were Bharti Airtel up by 1.66%, TCS up by 1.49%, Ambuja Cements up by 1.49%, Adani Ports up by 1.13% and BPCL up by 1.06%. On the flip side, Reliance Industries down by 2.35%, Maruti Suzuki down by 2.25%, Tata Motors - DVR down by 2.17%, NTPC down by 2.16% and Bank of Baroda down by 2.10% were the top losers.

European markets were trading in red; Germany’s DAX declined 95.56 points or 0.92% to 10,277.93, UK’s FTSE 100 decreased 30.87 points or 0.49% to 6,279.57 and France’s CAC was down by 30.66 points or 0.67% to 4,539.00.

Asian equity markets ended mostly lower on Monday as oil prices fell after three weeks of gains and concerns intensified over dangers to China's debt and commodities markets. Investors remain on the sidelines as they await the outcome of various central bank meetings scheduled for this week. Chinese shares fell on concerns over risks in debt and commodities markets after the official Xinhua News Agency reported another scam in China's risk-laden shadow banking sector involving about 1 billion yuan ($A199 million) of investor funds. Hong Kong shares fell on worries the risks in China's debt and commodity markets may spread to real estate. Japanese shares fell from an 11-1/2-week high, even as the safe-haven yen hit a three-week low against the dollar on expectations the Bank of Japan could start lending to banks at negative rates after its two-day policy review ending on April 28.