Post Session: Quick Review

Thursday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges ended the session with cut of over three fourth of a percent, tracking massive sell-off in the Asian equities after Bank of Japan maintained status quo and refrained from adding fresh stimulus. Cautious policy stance by the US Fed on global growth worries and Brexit fears continued dampening the mood of the markets. After making a soft start, markets extended the southward journey and the indices even went on to test important psychological 26,300 (Sensex) and 8,000 (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.

Traders remained concerned with report that India’s merchandise exports contracted again, albeit at their slowest pace in 18 months in May as non-petroleum exports finally turned positive, led by exports of engineering goods and gems and jewellery. Exports contracted at 0.79% in May while imports slipped 13.16%, leaving a trade deficit of $6.27 billion. Some concern also crept in with India Meteorological Department (IMD) stating that the slow progress of the south-west monsoon has led to overall deficiency of rains by 22 per cent over the last fortnight.

Global cues too remained awful with European counters making a feeble start and key regional equity indexes dropping towards their lowest level in nearly four months as concerns lingered over Britain’s vote next week on its European Union membership. Asian stocks ended lower on Thursday and the yen surged after the Bank of Japan refrained from taking further stimulus steps, hours after the Federal Reserve’s own review struck a cautious note on its policy outlook.

Back home, selling was both brutal and wide-based as none of sectoral indices on BSE, barring metal, were spared. Counters, which featured in the list of worst performers, include telecom, banking and capital goods. Sectors like finance, auto, energy, realty, power too ended with huge losses. Depreciation in Indian rupee too dampened sentiments. The rupee depreciated by ten paise to trade at 67.25 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers. On the sectoral front, shares of three public sector oil marketing companies edged lower despite price increase of petrol and diesel with effect from midnight of 15 June 2016. Shares of sugar companies slumped by around 18% in an intra-day trade on account of profit booking. Most of the sugar stocks touched their multi-year highs and appreciated more than 30% in the month of June till Wednesday, as the outlook on profitability growth got further boost. Stocks of oil exploration & production companies edged lower as global crude oil prices dropped.

The NSE’s 50-share broadly followed index -- Nifty -- declined by around seventy points to end above the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- tumbled by two hundred points to finish below the psychological 26,600 mark. Broader markets too struggled to get any traction throughout the session and ended the trade with a cut of around half a percent.

The market breadth remained in the favour of advances, as there were 963 shares on the gaining side against 1,637 shares on the losing side while 166 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26525.46, down by 200.88 points or 0.75% after trading in a range of 26314.91 and 26686.03. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.37%, while Small cap index down by 0.55%. (Provisional)

The lone gaining sectoral index on the BSE was Metal up by 0.41%, while Telecom down by 2.21%, Bankex down by 1.38%, Capital Goods down by 1.02%, Auto down by 0.92% and Realty down by 0.67% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 1.13%, Wipro up by 0.59%, Hindustan Unilever up by 0.56%, GAIL India up by 0.49% and Tata Motors up by 0.40%. On the flip side, ICICI Bank down by 3.52%, Maruti Suzuki down by 2.93%, Bharti Airtel down by 1.65%, NTPC down by 1.53% and Bajaj Auto down by 1.41% were the top losers. (Provisional)

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for the second planned Initial Public Offering (IPO) of equity in state-owned companies for this financial year. It has approved disinvestment of 10% paid up equity of Housing and Urban Development Corporation (Hudco).

The government has approved a price discount of up to five per cent on the issue price to retail (small) investors and Hudco employees. The actual discount to them will be approved by the Alternative Mechanism based on recommendations of a High-Level Committee of Officers. As per the government’s statement, the paid-up equity capital of Hudco, with a net worth of Rs 7,800 crore, was Rs 2,002 crore as on end-March 2015. The face value of each share is Rs 10 at present.

In order to meet its ambitious stake sale target for 2016-17, the government is planning IPOs of equity in four public sector units and hopes to garner around Rs 8,000 crore. The department of investment and public asset management has identified Hindustan Aeronautics and Rashtriya Ispat Nigam as the companies it wants to take public, apart from Hudco and Cochin Shipyard, preparation for which is well under way.

For the current financial year, the government has set a disinvestment target of Rs 56,500 crore. Of this, Rs 36,000 crore is likely to come from minority stake sale in PSUs, including IPOs and Rs 20,500 crore from strategic sale. The government, which is planning to sell the stake in 15 PSUs in this fiscal, has already kick-started the disinvestment programme for the current fiscal with 11.36 percent stake sale in NHPC, which fetched Rs 2,700 crore.

The CNX Nifty ended at 8140.75, down by 65.85 points or 0.80% after trading in a range of 8074.45 and 8180.65. There were 14 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 2.85% and GAIL India up by 1.35% and Eicher Motors up by 1.02% and Asian Paints up by 0.82% and Adani Ports &Special up by 0.72%. On the flip side, Bharti Infratel down by 4.63%, ICICI Bank down by 3.59%, Maruti Suzuki down by 2.98%, Ultratech Cement down by 2.43% and Indusind Bank down by 2.07% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 73.18 points or 0.76% to 9,533.53, UK’s FTSE 100 declined 36.34 points or 0.61% to 5,930.46 and France’s CAC was down by 30.31 points or 0.73% to 4,141.27.

Asian equity markets ended lower on Thursday as oil extended losses and the Bank of Japan held off on additional easing measures to arrest the strengthening yen in the wake of concerns surrounding next week's British referendum. The yen rose sharply to hit multi-month highs against rival currencies as BOJ officials opted to wait until after the results of a British referendum next week that could send shockwaves through the global economy. Chinese shares fell as concerns about slowing economic growth and fears of further weakness in the yuan overshadowed encouraging bank lending data. China's bank lending increased more than expected in May following a sharp fall in April. Banks extended CNY 985.5 billion in new yuan loans in the month, which was above the expected level of CNY 750 billion. China's yuan held steady against the dollar, after briefly hitting a more than five-year low on expectations of a dovish statement from the Federal Reserve. Fed officials held rates steady last night, as was widely expected, while scaling down their tightening projections and growth forecasts for 2016 and 2017, citing slow jobs gains, tepid growth, low inflation and the impending vote on Brexit, scheduled for June 23. Hong Kong shares dropped after the Bank of Japan disappointed those hoping for more stimulus measures.