Post Session: Quick Review

Friday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges erased all of their morning gains and ended the session with a cut of around half a percent with frontline gauges breaching their cruel 8,200 (Nifty) and 26,700 (Sensex) levels. After a sluggish start, key gauges gained momentum and entered into green terrain in morning trade as investors opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing.  Sentiments got some support with Union Home Minister Rajnath Singh stating that India is the fastest growing economy in the world with the country witnessing more investments in past financial year than China and the United States. Traders also took some encouragement with report that a group of central and state government officials set up to frame the law for the proposed goods and services tax (GST) bill, has submitted its final draft that could be taken up at a meeting of the empowered committee of state finance ministers in Kolkata on June 14-15.

But, markets which seems touching 8,300 (Nifty) and 27,000 (Sensex) levels started declining from the peak to end in red terrain as traders opted to take profit off the table ahead of industrial production data for April, slated to be released later in the day. Uncertainty over Brexit referendum and caution ahead of a slew of Chinese data due this weekend and central bank meetings in the U.S. and Japan next week kept investors on edge.

Feeble opening in European counters too dampened domestic sentiments. CAC, DAX and FTSE all were trading with a huge cut of around one and a half percent in early deals. Asian markets ended in red on Friday as investors sought refuge in safe-haven assets amid festering concerns over the 23 June 2016 referendum that could see Britain exit the European Union. Back home, weakness in Indian rupee weighed down sentiments. The rupee was trading lower by 8 paise at 66.79 against the US dollar at the time of equity markets closing on Friday on higher demand for the American currency from importers and banks.

Trend reversal in banking counter too dampened sentiments. Banking stocks, which were on buyers’ radar in morning deals, failed to negotiate positive close despite Moody’s stating that the government will have to infuse Rs 1.2 lakh crore into PSU banks by 2020 to bolster their balance sheets and make good the losses suffered by them. On the flip side, sugar stocks remained in limelight after food minister Ram Vilas Paswan reportedly said that India plans to impose a 25% tax on sugar exports to maintain adequate supplies of the sweetener in the local market. Shares of logistics companies also extended gains for the fourth straight session on hopes of clearance of the goods and services tax (GST) Bill in the upper house of the Parliament.

The NSE’s 50-share broadly followed index -- Nifty -- declined by over thirty points to end below the psychological 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- dropped by around one hundred and thirty points to finish below the psychological 26,700 mark. Broader markets too struggled to get any traction and ended the session with a cut of around half a percent.

The market breadth remained in the favour of decliners, as there were 1,218 shares on the gaining side against 1,361 shares on the losing side while 186 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26635.75, down by 127.71 points or 0.48% after trading in a range of 26620.50 and 26972.06. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.40%, while Small cap index down by 0.20%. (Provisional)

The gaining sectoral indices on the BSE were Power up by 0.60% while, Realty down by 1.03%, Auto down by 0.95%, PSU down by 0.77%, Consumer Durables down by 0.71%, Oil & Gas down by 0.69% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were BHEL up by 1.73%, NTPC up by 0.60%, Lupin up by 0.54%, Reliance Industries up by 0.25% and Bharti Airtel up by 0.17%. On the flip side, Tata Steel down by 2.35%, GAIL India down by 2.09%, Coal India down by 2.03%, Tata Motors down by 2.02% and SBI down by 1.81% were the top losers. (Provisional)

Meanwhile, In order to enable investors to co-invest in the National Investment and Infrastructure Fund (NIIF), the government may tweak the investment norms in this sovereign wealth fund, as well as in the individual projects. Economic Affairs Secretary Shaktikanta Das has said that the norms would be tweaked within the broad framework of the investment to take into account suggestions from the domestic and overseas investors.

Das said that the government was earlier considering NIIF to be the mother fund under which there would be several sub-funds, but after interaction with investors from within and abroad we realised that there is equal amount of interest, perhaps greater interest to co-invest in individual projects. He further added that “we found that the investment pattern of NIIF, which we had in mind originally, required some amount of tweaking within the broad framework.”

The Economic Affairs Secretary also stated that the government is now in discussion with various investors and they will co invest in individual infrastructure projects and also invest in the mother fund. He further said that while co-investment in individual projects is important, it is also important that the investors come into the mother fund because there government equity will be only 49 per cent.

The CNX Nifty ended at 8170.05, down by 33.55 points or 0.41% after trading in a range of 8162.85 and 8265.60. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.97%, Yes Bank up by 2.30%, BHEL up by 1.98%, ACC up by 1.75% and Ambuja Cement up by 1.55%. On the flip side, Tata Motors - DVR down by 2.83%, Tata Steel down by 2.38%, Coal India down by 2.00%, Tata Motors down by 1.98% and GAIL India down by 1.86% were the top losers. (Provisional)

European markets were trading in red terrain; Germany’s DAX tumbled 190.66 points or 1.89% to 9,898.21, UK’s FTSE 100 declined 88.97 points or 1.43% to 6,142.92 and France’s CAC was down by 66.56 points or 1.51% to 4,339.05.

Asian equity markets ended lower on Friday in thin holiday trade, as uncertainty over Brexit referendum and caution ahead of a slew of Chinese data due this weekend and central bank meetings in the US and Japan next week, kept investors on edge. Singapore's Trade Minister Lim Hng Kiang reportedly said that a British vote to leave the European Union would have a significant impact on the United Kingdom and do nothing positive for the global economy. Nobuteru Ishihara, the Japanese economy minister, recently said he was ‘closely watching’ the impact of the referendum. A Brexit vote could have significant economic repercussions, Fed Chair Janet Yellen said in a speech on June 6. Japanese shares retreated as the yield on 10-year government bonds fell to a fresh record low of minus 0.14 percent and the yen strengthened on safe-haven bids ahead of the Fed and BOJ meetings due next week. Hong Kong stocks suffered their biggest one-day drop in more than three weeks, as traders were rattled by a report that billionaire investor George Soros, a noted China sceptic, was making big, bearish bets again. Markets in mainland China and Taiwan remained closed for the Dragon Boat Festival.