Post session - Quick review

Indian equity markets remained in negative terrain for the entire trading session. Barometer gauges sliding for the second consecutive session, showcased fatigue as investor’s wind their position on concerns of continued foreign selling with the controversial set of proposed tax GAAR, the clarity of which will provided on May 7,2012, when the proposal, along with the Finance Bill will be taken up by Parliament.

Absence of positive catalyst also pushed bears to defensive and Indian equity markets right from the down of the trade staged dejected moves. Overnight losses of Wall Street after data showed that private sector hiring fell far more than expected in April, underpinned a decline in regional counterparts along with Indian equity markets as this intensified concerns over slowing down global economic recovery. However, European shares opened higher, though they too started trading mixed as investors waited to see if the European Central Bank will prepare the ground for further stimulus measures at its policy meeting later.

Back on the home turf, macro-economic concerns mainly sapped the risk appetite of investor’s. More than this downbeat report from Global financial services firm -Morgan Stanley, stating, ‘India at high risk of BoP ‘shock’, dampened the already weak sentiment. Investors also preferred sitting on their hands after Indian rupee continue to trade below the perilous 53/$ mark. However, depreciation of rupee came as blessing for the IT stocks, which amidst the whole lot of decliners, managed to top the gainers list on BSE. Bounce back of Technology stocks also lightened the sentiment. However, the trouncing of rate sensitive Auto, Realty and Bankex counters took the steam out of the markets. While, the drubbing of Metal, Power and PSU stocks appeared to be no exception.

Auto stocks, like Hero MotoCorp (--7.69%) Apollo Tyres (-3.47%), Bajaj Auto (-2.05%, ), ended lower on gloomy April sales figures. Hero Motocorp was the biggest index loser in today’s session, post reporting its lower than expected Q4 earnings. However, beating came to the stocks after brokerage and investment firms like CLSA, Morgan Stanley and RBS downgraded the stocks stating its higher valuations.

Banking stocks were hammered down post RBI directive to set aside more capital to meet BASEL III requirements. On the flip side, sugar stocks sweetened on export limit scrap. Beneficiaries were Balrampur Chini Mills, Bajaj Hindusthan and Shree Renuka Sugars.

Lacking any traction, barometer gauges after falling like “house of cards” tanked close to a percentage points. The 30 scrip sensitive index, Sensex of BSE, ended near the low point of the day, sub 17150 mark, similarly, the 50 share index of National Stock Exchange (NSE), Nifty, too coughing up over 50 points concluded sub 5200 bastion. Additional weakness was found in broader indices, which finished with cut of over percentage points. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1073:1696 while 112 scrips remained unchanged. (Provisional)

The BSE Sensex lost 139.33 points or 0.81% and settled at 17,162.58. The index touched a high and a low of 17,271.77 and 17,120.86 respectively. 7 stocks advanced against 23 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.91% while Small-cap index was up 0.87%. (Provisional)

On the BSE Sectoral front, IT up 0.74%, TECk up 0.39% and Consumer Durables up 0.08% were the only gainers while Auto was down 2.46%, Bankex down 1.66%, Metal down 1.65%, PSU down 1.25% and Realty down 1.21% were the top losers.

The top gainers on the Sensex were HUL up 2.02%, Wipro up 1.85%, TCS up 0.89%, Sun Pharma up 0.83% and BHEL up 0.71% while, Hero MotoCorp down 7.90%, Tata Steel down 2.85%, Maruti Suzuki down 2.56%, SBI down 2.55% and Bajaj Auto down 2.51% were the top losers in the index. (Provisional)

Meanwhile, the government has freed the exports of sugar and scrapped the minimum export price of onion. It has also decided to set up an expert panel to formulate a policy to handle surplus foodgrains in view of storage crunch. Sugar and onions are items that are considered to be ‘sensitive’ because of their effects on household inflation and have been watched and regulated closely by the government.

However of late there have been complaints from sugar mills and farmers’ alike saying that the regulation is proving harmful to their business. India is the largest consumer and the second largest producer of sugar in the world. The sugar industry is completely controlled by the government, right from the level of production to distribution. The food ministry allocates the quantity of sugar to be sold in the open market every month.

Exports of the sweetener are also controlled by the government keeping in view the domestic demand.  However, off late the mills have been demanding that sugar exports be allowed as cane arrears have been piling. With the present move, mill owners will be able to clear cane arrears of over Rs 10,000 crore to farmers. Also millers will now be also able to export sugar freely under the open general licence. ‘We will review it once sugar exports reach a particular level,’ Food Minister KV Thomas said.

The scrapping of the minimum export price (MEP) of onion is also expected to help farmers make Indian onions more competitive in the international market. India is the second largest producer of onions in the world but has been facing stiff competition from China and Pakistan. Hence farmers have been demanding that the MEP be scrapped to help them make onions more competitive.

Apprehending that storage crunch would damage foodgrain during monsoon season, it was also decided to set up a panel, headed by Rangarajan, to recommend ways to handle surplus foodgrains stock lying in the central pool. The committee, comprising officials from Agriculture, Commerce, Food and Finance Ministries, has been asked to submit its recommendation in a shortest span as possible. The country is estimated to have produced a record 103.41 million tonnes of rice and 90.23 million tonnes of wheat in the 2011-12 crop year (July-June).

India VIX, a gauge for market’s short term expectation of volatility gain 3.82% at 19.25 from its previous close of 18.54 on Wednesday. (Provisional)

The S&P CNX Nifty lost 46.90 points or 0.90% to settle at 5,192.25. The index touched high and low of 5,217.30 and 5,180.65 respectively. 10 stocks advanced against 40 declining ones on the index. (Provisional)

The top gainers on the Nifty were Asian Paints up 2.37%, HUL up 2.32%, Wipro up 2.05%, BPCL up 0.94% and TCS up 0.74%.On the other hand, Hero MotoCorp down 7.55%, Axis Bank down 3.94%, Bank of Baroda down 3.39%, Maruti Suzuki down 3.24% and IDFC down 2.89% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 1.29%, Germany's DAX up 0.97% and Britain’s FTSE 100 up 0.40%.