Benchmarks end a lackluster session modestly in red

It was a lackadaisical performance from the Indian benchmark indices on Tuesday, as they failed to snap the session in the green territory and settled marginally below the neutral line. The frontline gauges took a breather, after showcasing a scintillating performance in last five trading sessions and investors chose to remain on the sidelines ahead of the key gross domestic product (GDP) and fiscal deficit data due 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. Depreciation in Indian rupee too weighed down sentiments. Indian 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.  However, investors got some comfort after Finance Minister Arun Jaitley promised more structural and market-oriented reforms as well as stepping up infrastructure spending to accelerate economic growth beyond the current 7.6 per cent.  He also promised to reform the tax structure to make it simpler, predictable and stable. Some support also 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.

On the global front, most of the Asian markets ended higher on Tuesday as investors found some solace in the latest economic data from Japan, which showed factory output and consumer spending data improved in April, though they remained weak. Chinese stocks jumped to a three-week high with financials leading a broad rally, as investors bet that MSCI will add mainland shares to its index for the first time next month, while shares in Japan gained on expectations that a 2017 sales tax hike will be delayed until 2019, and by a weakening in the Japanese yen. Investors are watching for the latest monthly manufacturing index for China, due Wednesday, and an OPEC meeting Thursday, as they seek to gauge the world economic outlook. Meanwhile, European stocks edge lower in early trade after official data confirmed that the eurozone remains in the grip of deflation with a stagnant jobless rate.

Back home, after getting firm start, the local benchmark indices slipped into negative territory in late morning trade as market participants booked profits at attractive and higher levels. Though the indices didn’t showed any sharp correction and traded in a tight range below neutral line for most part of the session amid lack of key triggers ahead of March quarter GDP numbers and March fiscal deficit data, scheduled for release after the market hours. However, some final hour profit booking ensured that the key gauges extend the consolidation period for second straight session. Finally, the NSE’s 50-share broadly followed index - Nifty settled with minor loss of eighteen points above the psychological 8,150 levels, while Bombay Stock Exchange’s Sensitive Index - Sensex shed fifty seven points but managed to close above the psychological 26,600 mark. On the BSE sectoral space, IT and Teck pockets remained among top laggards in the space as they got lacerated by 1.24% and 1.23% respectively. While sectors like FMCG, Oil & Gas and Power too got pounded in the session. On the flipside, the high beta sectors like Auto and Metal along with rate sensitive - Realty managed to go home with moderate gains of over a percent. Meanwhile, jewellery stocks edged higher on reports the government has rolled back its budget decision to apply 1% tax collection at source (TCS) on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh with effect from 1 June 2016. The market breadth remained pessimistic as there were 1001 shares on the gaining side against 1564 shares on the losing side, while 168 shares remained unchanged.

Finally, the BSE Sensex ended lower by 57.64 points or 0.22% to 26667.96, while the CNX Nifty dropped 18.40 points or 0.22% to 8,160.10. 

The BSE Sensex touched a high and a low 26837.20 and 26561.58, respectively. The broader indices made a negative closing; the BSE Mid cap index ended down by 0.18%, while Small cap index declined by 0.14%.

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% and 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% and Power down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 8.95%, Tata Steel up by 3.51%, SBI up by 3.12%, Maruti Suzuki up by 2.28% and HDFC up by 1.30%. On the flip side, Sun Pharma down by 6.13%, TCS down by 2.29%, GAIL India down by 2.19%, ITC down by 1.40% and Bharti Airtel down by 1.33% were the top losers.

Meanwhile, in a morale booster for the domestic aviation industry, the global airlines’ association, International Air Transport Association (IATA) in its global passenger traffic results for April, has said that India's domestic passenger traffic grew by 21.8 per cent in April.

It was the 13th consecutive month that the domestic air passenger traffic growth out performed major aviation markets, as the number of fliers grew 21.8 per cent in April as against a global average of 4.1 per cent during the month. According to IATA, “India’s domestic traffic soared 21.8 per cent, marking the 20th month of double-digit traffic growth and the 13th consecutive month it has led the domestic markets.”

As per IATA’s report demand for domestic travel climbed 4.1 per cent in April compared to April 2015, while capacity increased 3.8 per cent, causing load factor to rise 0.3 percentage points to 81.4 per cent. The air passenger traffic stood at 79.32 lakh passengers -- up from 65.59 lakh in the corresponding month last year. The data further pointed out that India's domestic capacity in the month under review rose by 21.3 per cent.

According to IATA's April traffic results, India’s domestic passenger traffic grew the fastest amongst the seven major aviation markets of the world. India's domestic passenger traffic growth was followed by that of China at 9.5 per cent, the US and Australia at 2.4 per cent each, the Russian Federation at 1.9 per cent and Japan at 0.7 per cent. However, Brazil reported a decline in their domestic passenger traffic at -12.1 per cent. International passenger demand, however, rose 4.8 per cent in April this year compared to April 2015, the slowest pace in two years.

The CNX Nifty traded in a range of 8,213.60 and 8,134.30. There were 22 stocks advancing against 29 stocks decliners on the index.

The top gainers on Nifty were Tata Motors - DVR up by 11.21%, Tata Motors up by 8.15%, Aurobindo Pharma up by 3.66%, Tata Steel up by 3.63% and State Bank of India up by 3.24%. On the flip side, Sun Pharma down by 6.17%, Bharti Infratel down by 3.04%, TCS down by 2.61%, BPCL down by 2.09% and Gail down by 2% were the top losers.

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.