Indian benchmarks drift below crucial levels

A session after showcasing amazing gains of over half a percent, Indian equity indices faltered and failed to extend the winning momentum on Friday. The benchmark indices suffered hefty bouts of profit booking especially in commodities related counters and got dragged below the psychological 9,300 (Nifty) and 29,900 (Sensex) levels. Besides, a selloff in banking shares after the President Pranab Mukherjee Okayed the ordinance on non-performing assets, concerns over French elections on Sunday and mixed global earnings have also hit the sentiment hard. The ordinance promulgated by the government on bad loans has now empowered the Reserve Bank of India to issue directions to banks for resolution of stressed assets. Market participants remained cautious ahead of the Goods and Services Tax (GST) Council meeting, scheduled on May 18-19, to finalise the rates of different commodities and services. It will also approve rates of remaining items. Investors failed to get any sense of relief with Confederation of Indian Industry (CII) President Shobana Kamineni's statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. Furthermore, Economic Affairs Secretary Shaktikanta Das said Indian economy will grow 8% next fiscal as the full-year impact of the landmark GST will be seen by that time. The GST, dubbed as the biggest tax reform since independence, will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Meanwhile, the gold and jewellery stocks gained traction on report that the uptake for gold in India for January-March this year was 124 tonnes, up 15% compared with the overall demand for the same period in 2016.

On the global front, Asian equity benchmarks ended mixed on Friday, as fresh fall in commodities raised concerns about the health of the global economy, though the euro bucked the broad weakness on receding concerns about France's presidential election. Commodity prices across the board tumbled, led by oil, which fell by 5 per cent in overnight trading on concerns of a supply glut with analysts forecasting further losses. Traders are eyeing the release of the US Labor Department's closely-watched monthly jobs data later today for further cues. The energy stocks in the region were under pressure after the crude oil futures plummeted overnight on global glut concern. Chinese stocks led regional losers, falling to a three-month low as concerns about tighter financial regulations weighed on banking shares. Meanwhile, European stocks edged lower in early trade as tumbling oil prices weighed on investor sentiment.

Back home, the local benchmark got off to a gap down opening, in tandem with the somber sentiments prevailing in Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Finally, the NSE's 50-share broadly followed index Nifty, suffered a nasty seventy-point laceration to settle below the crucial 9,300 support level, while Bombay Stock Exchange's Sensitive Index Sensex got obliterated by over two hundred and fifty points and closed below the psychological 29,900 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with large cuts of around a percent.

The market breadth remained pessimistic, as there were 833 shares on the gaining side against 2006 shares on the losing side, while 141 shares remained unchanged.

Finally, the BSE Sensex decreased 267.41 points or 0.89% to 29858.80, while the CNX Nifty was down by 74.60 points or 0.80% to 9,285.30. 

The BSE Sensex touched a high and a low of 30176.55 and 29823.60, respectively and there were 4 stocks on gainers side as against 26 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined 1.09%, while Small cap index was down by 0.84%.

The top losing sectoral indices on the BSE were Metal down by 2.47%, Energy down by 1.71%, Oil & Gas down by 1.61%, PSU down by 1.39% and Basic Materials down by 1.31%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were Adani Ports & SEZ up by 1.56%, Asian Paints up by 1.40%, ICICI Bank up by 0.20% and Maruti Suzuki up by 0.17%. On the flip side, Tata Motors down by 3.84%, ONGC down by 2.83%, Axis Bank down by 2.70%, GAIL India down by 2.49% and Reliance Industries down by 2.22% were the top losers.

Meanwhile, demonetization move seems to have taken its toll on the aviation sector too, as India lost its fastest growing domestic aviation market tag to China in the month of March, posting a lower domestic revenue passenger kilometres (RPK) growth rate. According to International Air Transport Association’s (IATA) latest report, the country’s RPK growth rate dropped in March to 14.6 per cent from 17 per cent in February, mainly because of demonetization move, which has brought it down to the third position among major aviation markets like Australia, Brazil, China, Japan, Russia and the US for the month.

The report further said that India was at the top of the global charts for the domestic air passenger growth for 23 straight months until February. Besides, the country had also posted over 20 per cent growth in domestic passenger market for 13 consecutive months until January this year. Though, IATA noted that even if the demand for domestic air travel has witnessed drop, it was still twice that of the global average which stood at 7.6 per cent in March.

China overtook India as the fastest growing domestic market with passenger traffic at 15.1 per cent, posting the fastest year-on-year domestic growth rate for the first time in two years due to its robust services sector growth as well as supply developments. Global passenger traffic demand rose 6.8%, compared to the same month a year ago, while capacity grew 6.1% and load factor climbed by half a percentage point to 80.4% for the month of March.

The CNX Nifty traded in a range of 9,377.10 and 9,272.00. There were 14 stocks in green as against 37 stocks in red on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.80%, ACC up by 2.15%, Adani Ports & SEZ up by 1.40%, HCL Tech up by 1.22% and Asian Paints up by 1.18%. On the flip side, Bank of Baroda down by 4.21%, Tata Motors down by 3.8%, Hindalco down by 3.56%, ZEEL down by 3.02% and Tata Motors - DVR down by 2.98% were the top losers.

European markets ended mostly in red; Germany’s DAX declined 46.83 points or 0.37% to 12,600.95 and France’s CAC was down by 5.84 points or 0.11% to 5,366.58, while UK’s FTSE 100 increased 4.68 points or 0.06% to 7,252.78.

Asian equity benchmarks exhibited mixed trend in Friday’s trade, as traders remained on sidelines ahead of ahead of Friday’s U.S. government payrolls report. U.S employment is expected to increase by 180,000 jobs in April after an increase of 98,000 jobs in March. The unemployment rate is expected to tick up to 4.6 percent from 4.5 percent. Investors also remained focus on this weekend’s presidential runoff vote in France. Moreover, retreat in crude oil and other commodities prices knocked global sentiment. Commodity prices across the board tumbled, led by oil, which fell by 5 per cent in overnight trading on concerns of a supply glut with analysts forecasting further losses. Japan and South Korea market are closed for a holiday.