Post Session: Quick Review

Thursday turned out to be a disappointing session for the Indian equity indices which got pounded by around a percent, as traders remained cautious ahead of industrial production data for April, slated to be released tomorrow. After a negative opening, the domestic bourses extended their southward journey as concern over rising crude oil prices, which are hovering near their one year highs, coupled with weak global cues weighed down sentiments. The key indices even went on to test important psychological 26,700 (Sensex) and 8,200 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed some of their losses from thereon as investors continued hunt for fundamentally strong stocks.

The sentiments remained under pressure despite Reserve Bank of India (RBI) Governor Raghuram Rajan stating that India’s growth is picking up further with more animal spirit and good monsoon and public investment picking up pace. Traders also failed to get any sense of relief with Prime Minister Narendra Modi’s statement that his dream was to economically empower every Indian by 2022, the 75th anniversary of India's Independence Day.

Selling got intensified with European counters making a feeble start on Thursday, dropping for a second straight day, with a fall in Vodafone weighing on the telecom sector and Essentra hit by a profit warning. Asian stocks retreated from a six-week high as a strengthening yen pressured Japanese shares, overshadowing gains from energy producers amid a rally in crude. Back home, selling was both brutal and wide-based as most of sectoral indices on BSE ended in red. Counters which featured in the list of worst performers included software, technology and fast moving consumer goods. Depreciation in Indian rupee too dampened sentiments. The rupee was at 66.76 per dollar at the time of equity markets closing as compared to 66.64 per dollar level on Wednesday.

Stocks related to auto counter remained under pressure on report that domestic passenger car sales dipped marginally by 0.86% to 1,58,996 units in May from 1,60,371 units in the year-ago month. Software pack too ended lower, led by over four percent fall in Infosys after a media report quoted chief operating officer U B Pravin Rao as telling investors that overall demand for its services remained ‘volatile’. On the flip side, metal & mining stocks gained as copper prices rose in global commodity markets. Infra stocks edged higher, as the governing council of National Investment and Infrastructure Fund chaired by finance minister Arun Jaitley reviewed progress of operationalising India’s maiden sovereign wealth fund NIIF, including the selection of its CEO and projects shortlisted for making initial investments. The government has proposed a corpus of Rs 40,000 crore for NIIF, which will invest in infrastructure projects.

The NSE’s 50-share broadly followed index Nifty declined by around seventy points to end below the psychological 7,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around two hundred and sixty points to finish below its psychological 26,800 mark. Broader markets too struggled to get any traction and ended the session mixed.

The market breadth remained in favor of decliners, as there were 1,234 shares on the gaining side against 1,332 shares on the losing side while 190 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26763.46, down by 257.20 points or 0.95% after trading in a range of 26692.35 and 26994.91. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.47%, while Small cap index up by 0.04%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.59%, Energy up by 1.58%, Oil & Gas up by 1.19%, PSU up by 1.10% and Utilities up by 0.45%, while IT down by 2.17%, TECK down by 1.81%, FMCG down by 1.60%, Capital Goods down by 0.81% and Auto down by 0.62% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.23%, NTPC up by 2.06%, ONGC up by 1.99%, Reliance Industries up by 1.66% and Cipla up by 1.53%. On the flip side, Infosys down by 4.22%, Hero MotoCorp down by 3.01%, ITC down by 2.39%, Hindustan Unilever down by 2.31% and Asian Paints down by 1.89% were the top losers. (Provisional)

Meanwhile, in a positive development, the defence logistics pact or the Logistics Exchange Memorandum of Agreement (LEMOA) between India and the US has come close to reality, as both the sides finalizing the pact during Prime Minister Narendra Modi’s visit. In the next step, the pact requires approval of the Cabinet Committee on Security (CCS) and once approved it won’t require Defence Minister’s presence and can be signed at a junior official levels.

Pact for LEMOA, which entails sharing of each other’s military bases, defence supplies, army vessels and aircraft on an operational basis during peace time and not during conflicts, was The pact was agreed in-principle during the visit to US Defence Secretary Ashton Carter to India in April. It will help the Indian defence forces during natural disasters, peacekeeping and rescue operations and terrorist attacks.

The LEMOA, which is a tweaked version of the US’ Logistics Support Agreement (LSA) facilitating the provision of logistical support, supplies and services between the US military and the armed forces of partner countries, is one of the three defence foundational pacts that America is pushing India to sign in order to boost defence ties between both countries. Obama administration is pushing for other two pacts which are Communication Interoperability and Security Memorandum Agreement (CISMOA) and Basic Exchange and Cooperation Agreement (BECA). However, it will not be possible to conclude the negotiations on the remaining two pacts before the Obama administration exits office.

The CNX Nifty ended at 8203.60, down by 69.45 points or 0.84% after trading in a range of 8184.60 and 8273.35. There were 22 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 2.27%, Coal India up by 2.02%, NTPC up by 1.96%, Reliance Industries up by 1.79% and BPCL up by 1.77%. On the flip side, Infosys down by 4.25%, Ambuja Cement down by 2.64%, Hero MotoCorp down by 2.63%, Aurobindo Pharma down by 2.55% and ITC down by 2.40% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX declined 113.25 points or 1.11% to 10,103.78, UK’s FTSE 100 decreased 48.23 points or 0.77% to 6,253.29 and France’s CAC was down by 37.43 points or 0.84% to 4,411.30.

Asian equity markets ended lower on Thursday as weak data from both China and Japan added to global growth concerns, despite gains on Wall Street overnight and steadier oil and metal prices. The National Bureau of Statistics said that China's consumer price inflation rose an annual 2.0 percent in May, coming in below forecasts for a 2.3 percent rise and heading further below the government's target zone. Also, deflationary pressures in China eased further in the month, giving policymakers more room to keep fiscal and monetary policies supportive in coming months. The producer price index declined 2.8 percent in May from a year earlier, compared with a 3.4 percent fall in April. Japanese shares fell, weighed down by a stronger yen and worse than expected machinery orders data. Japan's core machinery orders tumbled 11 percent in April from the previous month, the most in two years, owing to earthquakes that hit the southern manufacturing hub, a government report showed. Markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival.