Post Session: Quick Review

Monday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges ended the session with a cut of over half a percent. Markets after a negative start extended their losses and the indices even went on to test important psychological 25,350 (Sensex) and 7,750 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed their some of their losses from thereon as investors continued hunt for fundamentally strong stocks. Traders remained concerned with a report that exports of 17 sectors, over half of the 30 sectors including petroleum products, textiles, man-made yarn and fabrics, engineering and leather, closely monitored by the Commerce Ministry were in the negative zone in March due to a fall in global commodity prices amid tepid demand.

Market participants also remained worried about a Care Ratings report on Employment in the Corporate Sector that notwithstanding the Indian economy’s steady growth, sectors such as telecom, engineering and electronics have witnessed a decline in employment rate over the last four year. Sentiments also got dampened after the growth in India's manufacturing sector slowed sharply in April as new business inflows were broadly unchanged during the month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) falling to a four-month low stood at 50.5 in April from March’s 52.4, nearing the 50 mark that separates growth from contraction and the lowest reading of the year.

On the global front, European markets were trading in green terrain with major export stocks setting the pace. Asian markets, however, ended in red, after the yen strengthened past 107 per dollar, weighing on the earnings outlook for Japanese exporters, while data in China suggested the country’s central bank may have less need to loosen monetary policy.

Back home, depreciation in Indian rupee weighed down sentiments. Rupee weakened by 5 paise to 66.38 against the dollar at the time of equity markets closing at the Inter-bank Foreign Exchange market on increased demand for the American currency from importers and banks. Public sector oil marketing companies (OMCs) ended in red despite Indian Oil Corporation (IOC) announcing an increase in the price of petrol and diesel with effect from the midnight of April 30, 2016. On the flip side, sugar stocks edged higher as sugar realisations improved. The retail sugar prices have gone up almost 40% in last six months from Rs 26-27 a kg to Rs 36 a kg now.

The NSE’s 50-share broadly followed index -- Nifty -- declined by over forty points but managed to hold its psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- dropped by around one hundred and seventy points to finish below the psychological 25,500 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around a percent.

The market breadth remained in the favour off decliners, as there were 1,290 shares on the gaining side against 1,320 shares on the losing side while 118 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25436.97, down by 169.65 points or 0.66% after trading in a range of 25341.14 and 25565.44. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.10%, while Small cap index up by 0.39%. (Provisional)

The top gaining sectoral indices on the BSE were Basic Materials up by 1.29, Consumer Durables up by 1.07%, Metal up by 1.02%, Energy up by 0.26% and Oil & Gas up by 0.25%, while Bankex down by 1.34%, Telecom  down by 0.80%, IT down by 0.65%, TECK down by 0.65% and Realty down by 0.59% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 2.37%, BHEL up by 1.99%, Maruti Suzuki up by 1.06%, Hero MotoCorp up by 0.99% and Lupin up by 0.76%. On the flip side, ICICI Bank down by 4.06%, Dr. Reddys Lab down by 2.89%, Bharti Airtel down by 2.03%, Adani Ports & Special down by 1.89% and SBI down by 1.32% were the top losers. (Provisional)

Meanwhile, with an aim to step up engagement in hydrocarbon sector with Iran, India has conveyed to the Persian Gulf nation that it is ready to clear nearly $6.5 billion oil import dues at the earliest, provided there is clarity on the payment channel. There has been a series of discussions at various levels, both in Iran and India, and both sides are confident of resolving the matter soon. Refiners like Essar Oil and Mangalore Refinery and Petrochemicals (MPRL) owe nearly $6.5 billion in dues to Iran.

Following lifting of sanctions against it in January under a historic nuclear deal, Iran had terminated a three-year-old system with India of getting paid for half of the oil dues in rupees and has been insisting on being paid in Euros for the oil it sells to Indian refiners. Though Western sactions against Iran were lifted, problems persist in banking channels due to which regular transactions were not possible yet.

Since February 2013, Indian refiners like Essar Oil and MRPL have been paying 45 per cent of their import bill in rupees to UCO Bank account of Iranian Oil Company. The remaining has been accumulating, pending finalisation of a payment mechanism.

Recently, in order to make up for the foreign exchange losses incurred, Iran had asked Indian refiners like Essar Oil and MRPL to pay interest rate of Libor-plus 0.75 per cent (London Inter-Bank Offered Rate) on the $6.5 billion they owe it in past oil dues.

The CNX Nifty ended at 7805.90, down by 43.90 points or 0.56% after trading in a range of 7777.30 and 7829.80. There were 20 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 2.39%, GAIL India up by 2.01%, BHEL up by 1.83%, Aurobindo Pharma up by 1.30% and Ambuja Cement up by 1.27%. On the flip side, ICICI Bank down by 4.30%, Dr. Reddys Lab down by 2.49%, Adani Ports & Special down by 2.20%, Tech Mahindra down by 1.84% and Bharti Airtel down by 1.60% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 14.94 points or 0.34% to 4,443.90 and Germany’s DAX was up by 81.9 points or 0.82% to 10,120.87.

Asian equity markets ended lower on Monday, with downbeat US data, falling commodity prices and a surging yen weighing on markets in a holiday-affected trading session. Chinese manufacturing data for April also cast doubt over strength of a pick-up in the world's second-largest economy. Activity in China's manufacturing sector expanded for the second month in a row in April but at a slower pace. The PMI fell to 50.1 from 50.2 in March. The PMI for the non-manufacturing sector stood at 53.5 in April, down from 53.8 in March. Japanese shares tumbled as the dollar notched a fresh 18-month low against the yen, fetching 106.14 yen at one time compared with 106.40-50 yen in New York Friday, after the Bank of Japan opted to hold off on further monetary easing. Markets in China, Hong Kong, Taiwan, Singapore and Malaysia were closed for observance of Labor Day.