Post session - Quick review

It was again a lackadaisical performance from the benchmark indices on Tuesday, as they failed to snap the session in the green territory and settled tad below the neutral line. Immense volatility characterized trading whereby benchmark equity indices kept altering between green and red terrain throughout the session. However, broader indices outperformed benchmarks and garnered gain of around half a percent. Indian equity benchmarks, soon after making a positive start, entered into red terrain in morning deals concerned with India’s Consumer Price Index (CPI)-based inflation for the month of May 2016 rising to 5.76%, the highest in 19 months, and the most since the new series of retail inflation with base year of 2012 was introduced from January 2015. Sentiments also remained dampened after India’s Wholesale Price Index (WPI) in the month of May 2016 increased to 0.79 percent compared to 0.34 percent in the previous month and -2.20 percent during the corresponding month of the previous year.

Sentiment also remained subdued with the India Meteorological Department (IMD) report suggesting the progress of southwest monsoon relatively slow as it is not getting a favourable system to move forward, but days of heat wave condition in central and northwest India will soon be over as pre-monsoon showers will bring moisture in the air. Weakness in Indian rupee too dampened sentiments. The rupee depreciated 14 paise to quote at a fresh one-week low of 67.27 at the time of equity markets closing against the US dollar in the afternoon trade on sustained demand for the American currency from importers and bankers.

Global cues too remained sluggish with European markets making a somber start declining for a fifth straight session on Tuesday, with investors becoming jittery before next week’s referendum in Britain on its membership of the European Union and a two-day meeting of the Federal Reserve starting later in the day. Asian markets slumped after a survey on Friday put the ‘Leave’ campaign 10 points ahead, although two polls on Saturday showed voters were still closely divided, underlining the contradictory polling less than two weeks before the referendum.

Back home, losses remained capped with Minister of State for Finance Jayant Sinha’s statement that the government has enough backing from smaller regional parties to pass the Bill in Rajya Sabha without support from the main opposition Congress party and further stating that if we can pass it in the monsoon session of Parliament, then we can implement it in April 1, 2017. On the sectoral front, stocks related to banking and realty companies remained on buyers’ radar, as the Reserve Bank of India has thrown a lifeline for overleveraged companies and banks to put an end to future bad loans by permitting capital restructuring which would see banks taking equity in companies. Stocks related to power space got an added push with a key energy report stating that weak coal and gas prices will not stop record investment in renewables over the coming decades as the cost of generating clean energy drops. On the flip side, stocks of four companies involved in oil exploration & production activities fell as global crude oil prices dropped.

The NSE’s 50-share broadly followed index -- Nifty – ended marginally in red but held its psychological 8,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex – declined finished tad below the psychological 26,400 mark. However, broader markets outperformed benchmarks and ended the session with a gain of around half a percenta percent.

The market breadth remained in the favour off advances, as there were 1,526 shares on the gaining side against 1,084 shares on the losing side while 148 shares remained unchanged. (Provisional)

The BSE Sensex is currently trading at 26395.71, down by 1.06 points or 0.00% after trading in a range of 26264.81 and 26485.45. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 0.18%, while Small cap index ended up by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.84%, Healthcare up by 0.51%, Industrials up by 0.50%, PSU up by 0.49% and Metal up by 0.48%, while Oil & Gas down by 0.52%, Energy down by 0.47%, IT down by 0.42%, TECK down by 0.37% and Consumer Discretionary Goods & Services down by 0.06% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Cipla up by 2.77%, Adani Ports &Special up by 2.67%, SBI up by 2.65%, ITC up by 0.96% and Tata Motors up by 0.93%. On the flip side, Hindustan Unilever down by 1.23%, Bajaj Auto down by 1.00%, Asian Paints down by 1.00%, Maruti Suzuki down by 0.93% and Hero MotoCorp down by 0.91% were the top losers. (Provisional)

Meanwhile, targeting April 2017 for the rollout of Goods and Services Tax with the support from smaller regional parties, Minister of State for Finance Jayant Sinha has said that “If we can pass it in the monsoon session of Parliament beginning next month, then we can implement it from April 1, 2017.”

Jayant Sinha further said that, after Parliament approves the constitutional amendment to allow GST, it needs to be ratified by more than half of states then after the Constitution Amendment Bill is passed in Parliament, there are three more legislations Central GST, State GST, and Integrated GST which are required to be passed.

GST was earlier planned to be introduced from April 1 this year, converting 29 states into a single market through the new indirect tax regime, but the deadline was missed as the Bill to roll it out remains delayed in the opposition-dominated Rajya Sabha. With the Monsoon Session of Parliament likely to get underway next month it remains the last chance for the government to pass the Goods and Services Tax Bill by its planned date of April 1, 2017.The government is betting on support from smaller regional parties to pass the national sales tax legislation in the Parliament session from next month, and expects approval for supporting laws by year-end.

In a related development, Finance Minister Arun Jaitley is going to participate in the meeting of Empowered Committee of State Finance Ministers, which will deliberate on the model GST law at the two-day meeting in Kolkata and also try to iron out differences over the new regime that will include all indirect taxes and create one national market under the GST.

The CNX Nifty ended at 8108.85, down by 1.75 points or 0.02% after trading in a range of 8069.50 and 8134.95. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Cipla up by 2.99%, Adani Ports & Special up by 2.96%, SBI up by 2.92%, Bank of Baroda up by 1.85% and Eicher Motors up by 1.66%. On the flip side, Ultratech Cement down by 2.24%, Zee Entertainment down by 1.77%, BPCL down by 1.73%, Ambuja Cement down by 1.45% and Hero MotoCorp down by 1.01% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 110.48 points or 1.14% to 9,546.96, UK’s FTSE 100 declined 78.34 points or 1.3% to 5,966.63 and France’s CAC was down by 59.7 points or 1.41% to 4,167.32.

Asian equity markets ended mostly lower on Tuesday, as falling oil prices on worries about global growth and renewed strength in the yen added to the impending uncertainty over the outcome of the UK's EU referendum. Japanese shares hit nine-week lows as falling government bond yields and a strengthening yen kept financials and exporters under pressure. Hong Kong shares fell on Tuesday, with market sentiment curbed by worries about China's economy and uncertainty around this week's Federal Reserve meeting and next week's British referendum on whether to leave the European Union. However, Chinese shares eked out modest gains ahead of MSCI's decision on whether to add Chinese A-shares to its Emerging Markets Index.