Benchmarks ends flat ahead of US jobs data

Indian Benchmark indices trimmed most of their intra-day losses and ended on flat note as gains in financial shares helped offset most of the losses in IT majors and select index heavyweights. Sentiments remained cautious ahead of a US payrolls report for April that could influence bets on future US rate hikes. Investors were also concerned over the slower pace of expansion last month in China's services sector, compared with March, which added to worries over China's disappointing manufacturing data and downgrades on growth and inflation forecast by the European Commission. On domestic front, sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 388.51 crore on May 05, 2016. Besides, depreciation in rupee value against the dollar also weighed on the sentiment. Indian rupee depreciated by four paise to trade at 66.59 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers. However, market participants got some comfort with Finance Minister Arun Jaitley’s statement that the government is following the approach of 'Reform to Transform' through far-reaching structural reforms and has initiated several initiatives to boost investment climate and improve Ease of doing Business.

On the global front, Asian markets ended mostly lower on Friday as investors turned jittery ahead of a closely watched US jobs report, but China stocks were down more sharply over rising defaults and regulatory concerns. Further, Japan's Nikkei, which resumed trading after being closed for holidays since Tuesday, pared earlier losses to close down 0.25%, as the yen's strength renewed concerns about corporate profits. Meanwhile, European stocks fell modestly in early trade, with mining and energy stocks bearing the brunt of the selling, as a surging dollar pulled down commodity prices. 

Back home, the local benchmark got off to a weak start as investors turn jittery and booked profits amid weak cues from Asian markets ahead of the US employment data. The selling pressure accentuated in the mid morning trades as investors took to across the board risk aversion. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. The frontline indices even managed to break into the positive terrain in final hour of trades but only for a moment as some mild profit booking followed by some modest covering ensured that the key gauges post only modest losses. Meanwhile, Gems and jewellery stocks declined after Finance Minister Arun Jaitley rejected demands for rollback of 1% excise duty on non-silver jewellery and asserted that jewellers will have to pay taxes. On the other hand, financial stocks edged higher after the Reserve Bank of India (RBI) issued draft guidelines on granting licences on a continuous basis for setting up of universal banks in the private sector. Eventually the NSE’s 50-share broadly followed index Nifty, settled with single digit cut below the crucial 7,750 support level while Bombay Stock Exchange’s Sensitive Index Sense declined by thirty three points and closed above the psychological 25,250 mark. On the BSE sectoral space, the IT index remained the top laggard in the space and settled with over half a percent cuts. While counters like Teck, Capital Goods and Metal too suffered severe pounding. On the flipside, Consumer Durables, Oil & Gas and Auto pockets managed to go home with the gains of over half a percent. The market breadth was pessimistic as there were 1123 shares on the gaining side against 1394 shares on the losing side, while 188 shares remained unchanged.

Finally, the BSE Sensex declined by 33.71 points or 0.13% to 25228.50, while the CNX Nifty dropped 2.05 points or 0.03% to 7,733.45. 

The BSE Sensex touched a high and a low 25260.48 and 25057.93, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.37%, while Small cap index was lower by 0.20%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.70%, Oil & Gas up by 0.69%, Auto up by 0.61%, Power up by 0.58% and PSU up by 0.48%, while IT down by 0.75%, TECK down by 0.56%, Capital Goods down by 0.55% and Metal down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.99%, BHEL up by 3.17%, Asian Paints up by 2.31%, SBI up by 2.19% and Tata Motors up by 1.92%. On the flip side, Dr. Reddys Lab down by 2.14%, Wipro down by 1.92%, Adani Ports &Special down by 1.86%, ONGC down by 1.21% and HDFC Bank down by 1.14% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that the government is following the approach of ‘Reform to Transform’ through far-reaching structural reforms and has initiated several initiatives to boost investment climate and improve Ease of doing Business.

The Finance Minister while addressing the Business Session of the 49th Annual General Meeting (AGM) of Asian Development Bank (ADB) held at Frankfurt, said that though the Asia-Pacific region remains the growth engine for the world, there appears to be a softening in region’s growth rate from 5.9 percent projected last year to 5.7 percent each in 2016 and 2017. But he added that India continues to maintain a high growth rate at 7.65 percent in 2015-16 compared to 7.2 percent in the previous year.

Jaitley also pointed that India’s massive financial inclusion program has enabled opening of over 200 million bank accounts for unbanked persons. India is using AADHAAR, a unique identification system, as a backbone for targeted delivery of financial subsidies and benefits.

Later the minister said that good monsoon will aid in accelerating economic growth of the country and that India can grow at faster pace this year if predictions of good monsoon hold up.

The CNX Nifty traded in a range of 7,738.90 and 7,678.35. There were 27 stocks advancing against 24 stocks decliners on the index.

The top gainers on Nifty were GAIL India up by 4.88%, BHEL up by 2.97%, Eicher Motors up by 2.86%, Tata Power up by 2.84% and ACC up by 2.81%. On the flip side, Dr. Reddys Lab down by 2.31%, Adani Ports &Special down by 2.07%, Wipro down by 2.05%, HCL Tech down by 1.62% and Tech Mahindra down by 1.45% were the top losers. European markets were trading in red; Germany’s DAX decreased 36.86 points or 0.37% to 9,815.00, UK’s FTSE 100 declined 31.22 points or 0.51% to 6,086.03 and France’s CAC was down by 30.35 points or 0.7% to 4,289.11.

The Asian markets closed mostly in red on Friday as a firmer dollar exerted downward pressure on commodities and investors looked ahead to a key US jobs report due later in the day for clues on whether the Federal Reserve will hike rates in June. The non-farm payrolls report is expected to show an increase of about 200,000 jobs in April, fewer than the 215,000 created in March. At the same time, the unemployment rate is expected to edge down to 4.9 percent from 5 percent. Chinese shares led regional losses on worries about rising bond defaults and a broad sell-off in China's commodities market. Japanese shares fell slightly to extend losses for the sixth consecutive session as trading resumed after a three-day national holiday, while investors were worried about corporate profit growth as the yen changed hands in the lower 107 yen range. Markets in South Korea and Indonesia were closed for public holidays.