Post session - Quick review

Benchmark equity indices after undergoing a roller-coaster ride concluded down in the dumps, lacking any positive cues to lift the markets on Monday. Market men adjusted position ahead of April month’s F&O expiry in wake of gloomy global set up spooking sentiment at Dalal Street. Choppiness remained the key attribute of the trade today for the barometer gauges, which gradually went offloading gains. Although, the benchmarks managed to sneak out slender gains in early deals post a muted start, however it was short-lived.

Indian equity markets took a hit for the worst from the time of opening of European shares, which by reacting to French presidential election results, Chinese manufacturing data and persistent euro zone debt tensions, sapped investor’s appetite for emerging market assets. European region slid as political developments in France and the Netherlands flagged fears about the region's commitment to tackle its ongoing debt crisis. Meanwhile, Asian stock markets too slipped on Monday as slightly improved manufacturing data from China failed to dampen fears of a slowdown in the world's number two economy.

Back on the home turf, thrashing of Realty, Capital Goods and Metal counters mainly pounded the benchmark 30 share index, Sensex, by 250 points or a percentage and half to end below the 17200 bastion. Similarly, the barometer 50 share index, Nifty, too after getting petered out over 90 point finished sub 5300 bastion. Exit of DLF, a part of the 30-stock Sensex index from June 11, mainly dragged the realty gauge lower. However, even the trounce of Infosys, weighed on IT index. State Bank of India down by 1.8%, was biggest laggard, which dragged the banking index lower on announcing rate cuts across select loans.

However, even the TRAI setting 2G auction reserve price higher than 3G, auction price set in 2010 laid hard on Telecom stocks such as Bharti Airtel, Tata Communication, Idea Cellular and Reliance Communications. Telecom Regulatory Authority of India (TRAI) proposed a base price, at Rs 7000 crore, for the 900 mega hertz band which is twice the base price set for a 3G spectrum. For 700 megahertz band, Rs 14,000 crore base price has been set, which is 4 times the 3G reserve price.

On the other hand, however, energy stocks saw buying interest. Reliance Industries shares were among the top gainers, lifting the gauge as the sole gainer of the index. RIL, India's biggest firm by market cap, managed to sneak gains of over a percentage points gains, despite posting 21 percent dip in fourth quarter earnings, on delivering the promise of becoming a debt free company. However, the broad based selling coupled with April month’s F&O expiry dragged the barometer gauges to lowest point of the day by the end of trade. The trade was no different for broader indices which capitulated to selling pressure that took them lower over 1.50%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 998:1782 while 115 scrips remained unchanged. (Provisional)

The BSE Sensex lost 316.31 points or 1.82% and settled at 17,057.53. The index touched a high and a low of 17,444.18 and 17,056.77 respectively. 4 stocks advanced against 26 declining ones on the index (Provisional)

The BSE Mid-cap index lost 1.70% while Small-cap index was down 1.54%. (Provisional)

On the BSE Sectoral front, there were no gainers while Metal down 3.23%, Realty down 3.21%, Capital Goods down 3.05%, TECk down 3.05% and IT down 2.93% were the top losers.

There top gainers on the Sensex were Sun Pharma up 1.21%, Reliance Industries up 0.55%, HDFC up 0.06% and NTPC up 0.06% while, Jindal Steel down 5.01%, Hindalco Industries down 4.96%, DLF down 4.46%, BHEL down 4.10% and Bharti Airtel down 4.06% were the top losers in the index. (Provisional)

Meanwhile, the Centre for Monitoring Indian Economy expects the post tax profit margins of India Inc to edge up by 1% points to 7.1% this fiscal. A fall in input prices, inflation and softer interest regime are expected to raise profit margins for businesses. Consequently net profits are expected to grow by 30.6% after falling by 6.6% in FY12.

Also a fall in international prices of raw materials such as crude, natural gas, edible oils and coking coal in FY13 are further expected to limit expenditure on inputs and increase profits for companies.

As per the economic think tank raw material expenses of the manufacturing sector area expected to be restricted to 8.2%, much lower than the sales growth of 10.1% projected for the year. Further softening of interest rates is expected to be beneficial for the manufacturing sector. Net profits are expected to grow by a robust 51.4% in 2012-13 as against 25.4% fall estimated for the last fiscal.

The non-financial sector too will grow by 11.2% in the ongoing fiscal on the back of a 9.9% reduction in the interest outgo. The government's grant of permission to aviation firms to raise $1 billion for working capital loans through the external commercial borrowing route, will reduce the interest costs for aviation companies.

Also with the electricity sector getting permission to refinance its debts with ECBs, costs are expected to dip for the industry. The removal of customs duty on imported coal and liquefied natural gas (LNG) is also expected to boost the bottomline of the sector.

The Reserve Bank of India in its last monetary policy lowered the interest rates by 50 basis points to encourage growth in the economy. As the cost of finance comes down, profit margins and hopefully investments are expected to go up. The RBI in the last fiscal had hiked interest rates 13 times to control the spiraling inflation. With inflation moderating in the past 2 months it has decided to shift its focus from controlling inflation to boosting growth.  

India VIX, a gauge for market’s short term expectation of volatility gain 7.36% at 21.57 from its previous close of 20.09 on Friday. (Provisional)

The S&P CNX Nifty lost 101.85 points or 1.93% to settle at 5,189.00. The index touched high and low of 5,310.55 and 5,187.15 respectively. 6 stocks advanced against 44 declining ones on the index. (Provisional)

The top gainers on the Nifty were ACC up 1.64%, Sun Pharma up 1.53%, Reliance Industries up 0.35%, NTPC up 0.27% and Ranbaxy up 0.13%.On the other hand, Reliance Power down 5.82%, Reliance Communications down 5.68%, Reliance Infrastructure down 5.54%, Jindal Steel down 5.17% and Hindalco Industries down 4.88% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.74%, Germany's DAX down 2.49% and Britain’s FTSE 100 down 1.49%.

Sentiments remained bearish across the Asian region and all the Asian counters shut shop in the red on Monday as a little better manufacturing data from China failed to calm fears of a slowdown in the world’s number two economy. The preliminary HSBC China manufacturing purchasing managers index rose to a two-month high of 49.1 in April compared with a final reading of 48.3 in March. Investors also remained wary ahead of key central bank meetings. Moreover, the sentiments too remained dampened after French President Nicolas Sarkozy lost to Socialist candidate Francois Hollande in the first round of the presidential elections, sparking concerns about the euro zone's debt crisis.

Meanwhile, Hong Kong shares slipped about two percent, dragged lower as China Mobile posted underwhelming March subscriber numbers after markets closed last Friday. Moreover, Shanghai Composite ended lower by 0.76 percent, dragged down by financial and energy majors ahead of several first-quarter corporate earnings reports throughout this week.