Indian markets end a lackluster session with modest cut

Indian equity markets have prolonged the lull for third straight day and finished the session on a dull note, marginally below the neutral line as investors refrained from making big bets ahead of March quarter earnings, which begins later this week. Besides, tensions around the Middle East and the Korean peninsula send jitters across emerging markets with stocks extending losses for a third day and currencies weakening against the dollar. Indian rupee dropped by 32 paise to 64.60 against the dollar due to growing safe haven appeal for the American currency owing to higher chances of a tighter US monetary policy. Investors also remained cautious ahead of key economic numbers - industrial production (IIP) data for February and consumer inflation for March due to be released on Wednesday. The downside risk for the frontline indices was limited by reports that foreign investors have pumped in a staggering $2.45 billion in capital markets in the last four trading sessions. This comes following a record net inflow of Rs 56,944 crore ($8.7 billion) last month, mainly on expectations that BJP's victory in recently held assembly polls would lead to faster reforms. Some support also came with CII Business Confidence Index released during the weekend, which said that India Inc.'s perceptions about the state of the economy slid in the last quarter of 2016-17, yet industry's confidence levels about the future have peaked to their highest level in more than six years. Meanwhile, Liquor stocks such as United Spirits, Radico Khaitan, Associated Alcohols & Breweries, Tilaknagar Industries and Globus Spirits came under selling pressure after Madhya Pradesh Chief Minister Shivraj Singh Chouhan announced that all liquor shops would be closed across the state in a phased manner.

On the global front, Asian equity markets ended most in red on Monday as increased geopolitical risks prompted investors to favour safe-haven bets such as government debt, while the dollar drew support from Federal Reserve policy tightening expectations. The rise in risks of a conflict contrasts with market watchers' outlook for the global economy, which is perhaps the most optimistic it has been in years, with Chinese data this week expected to show the economy performing well. Chinese market declined after the country's chief insurance regulator came under investigation by its anti-corruption agency. However, Japanese shares ended higher as the dollar rose for a third day against the yen after comments from a top Federal Reserve official reinforcing the central bank's commitment to interest rate hikes. Meanwhile, European stocks slipped in early trade, with investors appearing to hold back from making major moves following last week's U.S. airstrikes against Syria in retaliation for a suspected chemical weapons attack that killed civilians.

Back home, after getting a positive start, the local benchmarks showed some strength in morning trades, but the sentiments turned pessimistic in noon trades and indices start drifting lower, tracking weak opening of European markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. Finally, the NSE's 50-share broadly followed index - Nifty plunged by around quarter percent to settle below the crucial 9,200 support level, while Bombay Stock Exchange's Sensitive Index - Sensex took a triple digit cut and closed below the psychological 29,600 mark. The market breadth remained optimistic, as there were 1757 shares on the gaining side against 1144 shares on the losing side, while 168 shares remained unchanged.

Finally, the BSE Sensex decreased 130.87 points or 0.44% to 29575.74, while the CNX Nifty was down by 16.85 points or 0.18% to 9,181.45. 

The BSE Sensex touched a high and a low of 29831.32 and 29553.04, respectively and there were 14 stocks on gainers side as against 16 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Metal up by 0.93%, Oil & Gas up by 0.88%, PSU up by 0.82%, Basic Materials up by 0.77% and Industrials up by 0.69%, while IT down by 1.62%, TECK down by 1.10%, Realty down by 0.70%, Consumer Durables down by 0.42% and Utilities down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.51%, Axis Bank up by 1.38%, Coal India up by 1.16%, Adani Ports & SEZ up by 1.06% and Tata Steel up by 0.52%. On the flip side, Infosys down by 2.88%, Asian Paints down by 1.91%, Reliance Industries down by 1.74%, Wipro down by 1.64% and HDFC down by 1.17% were the top losers.

Meanwhile, in order to manage government borrowing programme, the Finance Ministry is likely to set up a full-fledged independent public debt management agency (PDMA) by the end of 2018, which would help to resolve issues relating to conflict of interest as RBI decides on the key interest rates as well as undertakes buying and selling of government bonds.

At present, the government debt, including market borrowings, is managed by the Reserve Bank of India. Last year, moving towards an independent PDMA, the Finance Ministry as an interim arrangement had set up a Public Debt Management Cell (PDMC) at RBI's Delhi office, to allow separation of debt management functions from RBI to PDMA in a gradual and seamless manner, without causing market disruptions and it has given the overall charge of the PDMC to the Joint Secretary (Budget), Department of Economic Affairs.

Currently, the PDMC has only advisory functions to avoid any conflict with the statutory functions of the RBI. PDMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance. Other functions of PDMC are to manage government's liabilities, monitor cash balances, improve cash forecasting and foster a liquid and efficient market for government securities.

The CNX Nifty traded in a range of 9,225.65 and 9,174.85. There were 29 stocks in green as against 22 stocks in red on the index.

The top gainers on Nifty were IOC up by 3.55%, BPCL up by 3.21%, Grasim Industries up by 3.14%, Yes Bank up by 2.98% and Bharti Infratel up by 2.42%. On the flip side, Infosys down by 3.11%, Asian Paints down by 2.21%, Indiabulls Housing down by 2.09%, HCL Tech down by 1.89% and Wipro down by 1.57% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 2.61 points or 0.04% to 7,346.76, Germany’s DAX decreased 31.06 points or 0.25% to 12,194.00 and France’s CAC decreased 31.14 points or 0.61% to 5,104.14.

Asian equity markets made a mixed closing on Monday as a weaker yen and higher oil prices helped offset worries over rising geopolitical tensions and weaker than expected US jobs data. Latest employment report stated that the US economy created just 98,000 new jobs in March, well below the 185,000 consensus figure that was forecast. The unemployment rate, however, fell to 4.5% from 4.7% as the number of people who found work outstripped the labor force. Japanese shares ended higher as the dollar rose for a third day against the yen after comments from a top Federal Reserve official reinforcing the central bank's commitment to interest rate hikes. Meanwhile, Chinese stocks fell after the country's chief insurance regulator came under investigation by its anti-corruption agency.