Post session - Quick review

Junior Finance Minister’s S.S. Palanimanickam, statement of “Consideration of the Double Taxation Avoidance Treaty with Mauritius” sent down shivers across Dalal Street, where the benchmarks got bludgeoned by over a percent and half to shut shop precariously close to 4 months low level. Misery struck Dalal Street after Officials stated that the government was losing more than $600 million every year in revenue because of the tax treaty, besides incurring the risk of militant groups using it to route money into India.

Receding for third consecutive session, benchmarks audaciously lost the 17,000 and 5100 crucial fortress as nervy investor’s pocketed profits in anticipation of wider market swings in the run up to May 7, when the government notifies the controversial general anti-avoidance rules (GAAR).

Gloomy global tidings too can be held responsible for the annihilation of Indian equity markets, which sustaining the bearish trend concluded the week with nasty laceration of over two percentage points. However, the weakness was profound for broader indices too, which for the week ended with cut of over 2% (Midcap) and 1.5 % (Smallcap).

On the global front, Asian shares nosedived, tailing US stocks fall on Thursday as economic data sent mixed signals on the recovery a day before the April payrolls report. Meanwhile, lack of optimistic opening from European market too petrified investors, as this triggered concerns about the health of the world's biggest economy before a reading on the strength of the US jobs market. Weekend elections in France and Greece, which could complicate efforts to resolve the euro zone debt crisis, were also weighing on sentiment, leaving the euro steady against the dollar at around $1.3150 and debt markets little changed.

Back on the home turf, slump in the rupee to a low of over four and half months to 53.90/$, also exacerbated worries about India's fiscal and economic challenges. Volatility in global commodity prices amidst deteriorating balance of payment (BoP) situation in several Asian countries, were the factors to be blamed for currency depreciation by the Finance Minister Pranab Mukherjee.  Besides that gloomy results of state lender-Bank of Baroda also did not augur well for the markets.  Concerns over asset deterioration mainly dragged the BOB shares by over 6%. Otherwise, aided by higher interest income the bank’s fourth-quarter net profit climbed by 17.29% at Rs 1,518.18 crore. The bank’s asset quality deteriorated, with provisions against bad loans and other contingencies rising 43 percent to Rs 8.44 billion.

High beta sectoral gauges mainly played spoil-sport for markets. Drenched drastically in red, were stocks of Capital Goods, closely followed by Banking and Public Sector Undertaking counters. Banking shares continued to sag for second consecutive session after the Reserve Bank of India issued guidelines imposing core capital ratios of at least 7 percent, sparking concerns about return on equities in the sector. However, stocks of defensive Health Care space, were the only one to straddle against the odds.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 733:2079 while 99 scrips remained unchanged. (Provisional)

The BSE Sensex lost 327.75 points or 1.91% and settled at 16,823.44. The index touched a high and a low of 17,121.37 and 16,776.72 respectively. 5 stocks advanced against 25 declining ones on the index (Provisional)

The BSE Mid-cap index lost 2.15% while Small-cap index was down 1.80%. (Provisional) On the BSE Sectoral front, Health Care up 0.28% was the only gainer while Capital Goods was down 3.79%, Bankex down 3.17%, PSU down 2.55%, Power down 2.51% and Metal down 2.49% were the top losers.

The top gainers on the Sensex were Cipla up 2.52%, Wipro up 0.57%, Sun Pharma up 0.23%, HUL up 0.22% and Tata Motors up 0.05% while, BHEL down 5.08%, SBI down 4.57%, Hero MotoCorp down 4.44%, L&T down 4.34% and Bajaj Auto down 3.86% were the top losers in the index. (Provisional)

Meanwhile, the government's public debt for the period January-March 2012 increased by 5.4% to Rs 35,98,791 crore over the previous quarter. This takes the total public debt of the government to Rs 35,98,791 crore at end-March 2012 from Rs 34,13,683 crore at end-December 2011.

Out of the total debt, internal debt constituted 89.7% in March 2012 end, compared with 89.1% at the end of the December quarter. The outstanding internal debt of the government constituted 36.2% of GDP and stood at Rs 32,27,288 crore compared with 34.1% at end-December 2011.

Liquidity conditions remained tight during the Jan-Mar quarter with liquidity deficit remaining above the Reserve Bank's stated comfort zone of about 1% of Net Demand and Time Liabilities (NDTL) of commercial banks. Gross tax collections were 78% of revised estimate (RE) during April-February of FY’12 as compared to 79.8% a year ago. As far as the direct taxes were concerned, corporation tax collections showed a moderate growth of 7.1% while personal income tax collections increased by 17% as against growth rates of 9.7% and 17.3%, respectively, in the RE for FY’12.

Among the major indirect taxes, collections from custom duties showed a healthy growth rate of 13.7% and service tax collections grew by 36.5%, respectively, during April-February FY’12. Collection from excise duties grew at a lower rate of 5.2% against 9.0% in the RE.   India VIX, a gauge for market’s short term expectation of volatility gain 9.71% at 21.12 from its previous close of 19.25 on Thursday. (Provisional)

The S&P CNX Nifty lost 106.00 points or 2.04% to settle at 5,082.40. The index touched high and low of 5,177.20 and 5,070.60 respectively. 7 stocks advanced against 43 declining ones on the index. (Provisional)

The top gainers on the Nifty were Cipla up 2.93%, Sun Pharma up 0.83%, Wipro up 0.64%, Asian Paints up 0.42% and Tata Motors up 0.35%.On the other hand, Bank of Baroda down 6.23%, PNB down 5.07%, BHEL down 5.04%, Axis Bank down 4.75% and SBI down 4.66% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.82%, Germany's DAX down 0.66% and Britain’s FTSE 100 down 0.72%.

Asian equity indices exhibited a mixed close on last trading day of the week as traders turned cautious ahead of the all important jobs data from the world’s biggest economy. However, traders’ sentiments were supported by encouraging services sector data out of China. The Chinese service sector expanded at the fastest pace in six months in April, easing concerns over the slowdown of the world's second largest economy amid poor manufacturing performance. The headline HSBC business activity index rose to a six-month high of 54.1 in April from 53.3 in March. The index reading above 50 indicates expansion of the sector and a reading below 50 suggests contraction. The improvement was supported by the growth in new orders, which was the strongest in ten months.

Meanwhile, Hong Kong shares slipped by over half a percent, with Chinese property developers weak after the biggest player by sales posted its first monthly sales decline. Stock markets in Japan remained closed for the trade on Friday on account of Greenery day.