Post Session: Quick Review

Tuesday’s session turned out to be a choppy day of trade for Indian equity markets with frontline gauges ending the session with marginal losses as traders opted to book profits after markets witnessed sharp up-move in last five trading session. Soon after a positive start markets entered into red terrain and traded in tight band for most part of the day’s trade. Though, the revival effort in last leg of trade went in vein as recovery proved short lived as market once again turned red to end slightly lower as participants remained cautious ahead of the GDP data for the March quarter and fiscal deficit data for the month of March slated to be announced later today. India’s GDP growth for the fourth quarter of 2015-16 is likely to be around 7.1 per cent, but slow private sector capital expenditure (capex) spending and stressed banking sector will weigh on the economy's growth potential this year.

However, losses remained capped as some support came with the former Singapore Prime Minister Goh Chok Tong’s statement that India is a beacon of hope and has the potential to drive the world economy for the next 10 years, amid concerns of slowing global growth. Traders also got some encouragement with International Institute for Management and Development (IMD)’s World Competitiveness Center report, which has stated that India climbed three spots and China dropped an equal number of places in the 2016 rankings. India improved its overall performance, image, openness, and managerial practices.

On the global front, European counters were trading in red in early deals mid investors turning their focus to the OECD meeting in Paris and the ECB rate decision meeting this week. Asian markets, however, ended mostly in green on Tuesday amid optimism the global economy is strong enough to withstand a potentially imminent boost to US borrowing costs.

Closer home, the rupee erased its initial gains and was trading weak at 67.20 at the time of equity markets closing on account of month-end dollar demand from importers and fresh capital outflows. On the sectoral front, aviation stocks were reeling under pressure despite report of global airlines’ association that India’s domestic passenger traffic grew by 21.8% in April. On the flip side, buying in banking counter too aided sentiments after Minister of State for Finance Jayant Sinha said Government is looking to start a ‘significant’ fund that will invest in distressed loans held by lenders. Auto sector stocks remained on buyers’ radar ahead of the announcement of the monthly sales data for the month of May. Jewellery stocks too edged higher on report that the government has rolled back its decision to apply 1% tax collection at source on cash purchase of gold jewellery.

The NSE’s 50-share broadly followed index Nifty slipped by around twenty points but managed to hold the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around sixty points to finish below its psychological 26,700 mark. Broader markets too struggled to get any traction and ended the session with marginal losses.

The market breadth remained in favor of decliners, as there were 995 shares on the gaining side against 1,569 shares on the losing side while 169 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26667.96, down by 57.64 points or 0.22% after trading in a range of 26561.58 and 26837.20. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.18%, while Small cap index down by 0.14%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 2.34%, Metal up by 1.16%, Realty up by 0.88%, Bankex up by 0.67%, PSU up by 0.26% while, IT down by 1.24%, TECK down by 1.23%, FMCG down by 1.21%, Oil & Gas down by 0.68%, Power down by 0.68% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 8.24%, Tata Steel up by 3.37%, SBI up by 3.20%, Maruti Suzuki up by 2.28% and Adani Ports & Special up by 1.39%. On the flip side, Sun Pharma down by 6.22%, TCS down by 2.47%, GAIL India down by 2.19%, ONGC down by 1.50% and Reliance Industries down by 1.08% were the top losers. (Provisional)

Meanwhile, giving a big relief to the jewellers and customers, the government has rolled back its budget decision to apply 1 percent tax on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh, the revised rules will come to effect from June 1. India is the world's largest gold jewellery consumer and the Rs 5 lakh relief is expected to create some demand in the thin wedding season.

The jewellers had earlier been on a 45-day strike after Finance Minister Arun Jaitley in his Budget speech in February proposed 1 percent excise tax on non-silver jewellery. The decision has come at a right time when the jewellers are finding it difficult to offload their inventory that piled up following the strike. Gold demand in the country hit a seven-year low in the first quarter of 2016 when sales declined 41% year on year at 88.4 tonnes.

TCS, introduced as a measure to curb tax evasion and check black money transactions is collected by the seller from the buyer at the time of sale and is deposited with the government. The person from whom the TCS is collected gets credit for the same amount in his income tax return. TCS of 1% was imposed on cash purchase of jewellery worth Rs 5 lakh or more and of bullion worth Rs 2 lakh or more in 2012. However, in this year’s budget the government had reduced the TCS threshold on jewellery to Rs 2 lakh.

The CNX Nifty ended at 8160.10, down by 18.40 points or 0.22% after trading in a range of 8134.30 and 8213.60. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors - DVR up by 11.74%, Tata Motors up by 9.12%, Aurobindo Pharma up by 4.09%, Tata Steel up by 3.72% and Bank of Baroda up by 3.18%. On the flip side, Sun Pharma down by 6.08%, Bharti Infratel down by 2.98%, TCS down by 2.54%, GAIL India down by 2.47% and BPCL down by 1.90% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 25.01 points or 0.24% to 10,308.22, France’s CAC slipped 11.16 points or 0.25% to 4,518.24 and UK’s FTSE 100 was down by 8.27 points or 0.13% to 6,262.52.

Asian equity markets ended mixed on Tuesday, even as Chinese and Hong Kong shares posted strong gains as investors bet that MSCI, the global index provider, will add mainland-traded Chinese stocks, so-called A-shares, in its Emerging Markets Index for the first time next month. In the absence of cues from Wall Street, movements in yen and oil prices as well as a slew of data out of Japan and South Korea influenced market movements in the region. Japanese shares extended gains for a fifth day as mixed economic indicators and growing expectations for a June rate rise in the US held the dollar firmer near its highest level in two months against a basket of currencies, including the yen. Japan's industrial output rose 0.3 percent in April from the month before, beating expectations for a 1.5 percent fall, despite factory shutdowns sparked by the Kumamoto earthquakes. While the jobless rate held steady at 3.2 percent, household spending fell an annual 0.4 percent in April, marking the second month of declines.