Post Session: Quick Review

Wednesday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges ended the volatile session with a cut of around one third of a percent, breaching their crucial 25,600 (Sensex) and 7,850 (Nifty) levels. Sentiments remained downbeat since morning after India and Mauritius agreed to amend a three-decade old treaty thereby imposing capital gains tax on investments routed through Mauritius from next fiscal onwards. As per the protocol, capital gains arising in Mauritius from sale of shares acquired on or after April 1, 2017, in Indian firms will be taxed. According to reports, Mauritius accounted for 34% of foreign direct investments in India between 2000 and 2015.

However, markets showcased splendid recovery and pared almost all of their losses in noon deals after the Finance Ministry expressed optimism that India will continue to attract investments due to its strong economic fundamentals and the returns it offers to investors. Some support also came with Skymet’s report stating monsoon would reach Kerala earlier than its due date on June 1. The agency said that the southwest monsoon will arrive over the Andaman and Nicobar Islands between May 18 and 20. It is likely to reach Kerala between May 28 and 30. Thereafter, it will cover other parts of the country. Present weather conditions are indicating a promising beginning of monsoon 2016 which is likely to usher in with a bang.

The recovery proved short-lived as markets once again languished into red terrain as traders opted to sell risky assets ahead of important macro data slated to be announced later in the week. Weak opening in European counters too dampened sentiments. CAC, DAX and FTSE were trading with a cut of around half a percent in early deals. Asian markets ended mixed, as investors shrugged off an overnight rally in global stocks and looked to bonds in the absence of signs of a sustainable recovery in China and other emerging markets.

Back home, telecom stocks took U-turn to end lower despite the Supreme Court striking down an order by the country’s top telecom regulatory body mandating mobile service providers to compensate subscribers for call drops, calling it ‘arbitrary, unreasonable and non-transparent’. Public sector oil marketing companies (OMCs) edged lower as crude oil prices rose overnight. On the flip side, tyre stocks edged higher after Government has initiated a probe into dumping of certain radial tyres from China that are used in buses, lorries and trucks and may end up imposing duty on them to protect the domestic industry.

The NSE’s 50-share broadly followed index -- Nifty declined by around forty points to end below the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over one hundred and seventy points to finish below the psychological 25,600 mark. Broader markets struggled to get some traction and ended the session mixed.

The market breadth remained in the favour off decliners, as there were 1,110 shares on the gaining side against 1,458 shares on the losing side while 151 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25597.02, down by 175.51 points or 0.68% after trading in a range of 25409.24 and 25762.49. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.17%, while Small cap index down by 0.03%. (Provisional)

The only gaining sectoral indices on the BSE were Basic Materials up by 0.41% and Consumer Discretionary Goods & Services up by 0.34%, while Telecom down by 2.34%, Metal down by 1.16%, Auto down by 0.87%, Oil & Gas down by 0.74% and Utilities down by 0.63% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.08%, Asian Paints up by 1.55%, Maruti Suzuki up by 1.28%, NTPC up by 0.39% and Larsen & Toubro up by 0.26%. On the flip side, Bharti Airtel down by 2.75%, SBI down by 2.22%, Dr. Reddys Lab down by 2.13%, Tata Motors down by 2.11% and BHEL down by 2.06% were the top losers. (Provisional)

Meanwhile, Prime Minister Narendra Modi has chaired a review meeting on the progress of Aadhaar and Direct Benefit Transfer (DBT) programmes. The government is estimated to have saved over Rs 27,000 crore by cash transfers for payments to beneficiaries under various welfare schemes in the last two years.  In 2015-16, fund transfers worth Rs 61,000 crore was done through DBT to over 30 crore beneficiaries. This includes over Rs 25,000 crore in MGNREGS and over Rs 21,000 crore in PAHAL (for cooking gas).

Further,over 1.6 crore bogus ration cards have been deleted, resulting in savings of about Rs 10,000 crore. Similarly, 3.5 crore duplicate beneficiaries were weeded out in the PAHAL scheme, resulting in savings of over Rs 14,000 crore in 2014-15 alone. Moreover, in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) too, a saving of Rs 3,000 crore (roughly 10 per cent) has been estimated in 2015-16. Besides, Several States and Union Territories too have achieved significant savings through DBT. Meanwhile, the government is now also working on a unique identifier for non government organisations (NGOs). Over 71,000 NGOs are now registered with the NGO Darpan portal maintained by NITI Aayog.

In order to ensure that the targeted beneficiaries receive their benefits well in time, the Prime Minister emphasized the importance of creating a platform that is error-free. He also cautioned that beneficiaries should not be inconvenienced in the implementation of DBT and Aadhaar for various schemes. Further, he said that the officials must test their systems carefully before rolling them out on a large scale.

The CNX Nifty ended at 7848.85, down by 38.95 points or 0.49% after trading in a range of 7780.90 and 7893.10. There were 18 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 7.27%, Axis Bank up by 2.10%, Hindalco up by 1.95%, Bosch up by 1.77% and Kotak Mahindra Bank up by 1.20%. On the flip side, Bharti Airtel down by 2.70%, Tata Motors - DVR down by 2.54%, SBI down by 2.37%, Tata Motors down by 2.34% and Bharti Infratel down by 2.06% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 59.13 points or 0.59% to 9,986.31, France’s CAC declined 39.63 points or 0.91% to 4,298.58 and UK’s FTSE 100 was down by 12.76 points or 0.21% to 6,143.89.

Asian equity markets ended mixed on Wednesday despite positive overnight cues from Wall Street and Europe. China stocks closed modestly higher after recent steep losses as the country's Cabinet approved measures to reverse an export decline. Japanese shares ended marginally higher but pared earlier gains as the yen firmed against the dollar, obscuring the profit outlook for exporters. However, Hong Kong shares fell as investors waited for more clues on whether a recent pick-up in China's economy was just a seasonal blip or something more sustainable.