Benchmarks erase early gains to end below crucial levels

Volatility witnessed in the second half of the trade, washed out all the early gains of the Indian equity markets, leading to negative close, with frontline indices snapping below crucial 5,900 (Nifty) and 19,400 (Sensex) levels, despite getting a promising start. The domestic bourses had capitalized on the initial momentum, hitting their highest level in more than 23 months, but lost their direction in afternoon trades after banking space lost its sheen as both Houses of Parliament were adjourned before taking up the Banking Amendment Bill. The Banking Amendment Bill entails easing voting rules of shareholders in banks to attract foreign investment and allows the central bank more powers.

The benchmark equity indices that were trading with over a percent gain in mid morning trades trimmed most of them and touched the lowest levels in the mid noon session as traders cited renewed concerns about current account deficit after data on Tuesday showed exports fell 4 percent to $22.3 billion in November, while imports jumped to $41.5 billion, leaving a trade deficit of $19.3 billion. Traders focused on the outcome of factory data on December 12, 2012 and inflation data on December 14, 2012, which are coming ahead of RBI’s probable rate-setting, meet on December 18.

Selling pressure continued in late trade as stocks from realty space were hammered badly due to profit booking after recent strong gains. Some amount of pressure also came in after Auto counter lost their momentum on SIAM’s report that sales in passenger car segment dropped by 8.25 per cent to 1.58 lakh units last month from 1.72 lakh units in the same month last year. Additionally, shares of organized retailers declined for the second straight day as uproar continued in Lok Sabha over the Walmart lobbying report. Software and technology counters too declined about a percent on the back of a strengthening rupee against the US dollar. The rupee was trading at 54.30 in intra-day trade at the time of equity markets closing.

However, Markets witnessed slight recovery in late trade to end below their pre-close level supported by firm opening in European markets ahead of two data releases: Germany’s ZEW economic sentiment survey and US international trade. Moreover, Asian equity indices shut shop in the green trajectory on hopes that US Federal Reserve will take fresh economic stimulus measures this week to support growth in the world largest economy.

Back home, the NSE’s 50-share broadly followed index Nifty declined by ten points to end below its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over twenty points to finish below the psychological 19,400 mark. Moreover, broader markets butchered badly during the session and ended with a cut of about a percent.

The overall volumes stood above Rs 1.85 lakh crore, which remained on the higher side as compared to that on December 10, 2012. The market breadth remained in favor of declines as there were 1,154 shares on the gaining side against 1,766 shares on the losing side while 141 shares remain unchanged.

Finally, the BSE Sensex lost 22.55 points or 0.12% to settle at 19387.14, while the S&P CNX Nifty declined by 10.10 points or 0.17% to end at 5,898.80.

The BSE Sensex touched a high and a low of 19612.18 and 19285.29, respectively. The BSE Mid-cap index was down by 1.15% and Small-cap index was down by 0.91%.

Jindal Steel up 2.54%, Bajaj Auto up by 2.28%, Hindustan Unilever up 2.08%, Sun Pharma up 1.77% and HDFC up 1.29%, while, BHEL down by 2.59%, Hindalco down by 2.40%, NTPC down by 1.66%, Coal India down by 1.55% and Tata Power down by 1.51% were the top losers in the index.

On the BSE Sectoral front, FMCG up 1.00% was the sole gainers, while Realty down by 1.96%, Power down by 1.05%, TECk down by 0.92%, PSU down by 0.91% and Oil & Gas down by 0.89% were the top losers in the space.

Meanwhile, the net direct tax collection in November stood at Rs 19,863 crore, while the net direct tax collection has shown a growth of 15.04% to Rs 2,70,731 crore during April-November period of the current fiscal in which 60% tax revenue come from the corporate sector. Though, the growth in direct tax collection was slow in first half of the current fiscal but the government expects it to pick up in the second half of 2012-13.

According to a Finance Ministry, net corporate tax collection stood at Rs 1,62,897 crore during April-November, 2012.The personal tax mop-up stood at Rs 1,07,215 crore and wealth tax collection was at Rs 619 crore during the same period. Despite slowdown in the economic activities, the government has expressed confidence in meeting direct tax target of Rs 5.70 lakh crore for FY13 which include income tax, corporate tax and wealth tax. In the 2011-12 fiscal, the government has collected taxes of over Rs 4.93 lakh crore as per provisional estimates, against a budgeted target of Rs 5.32 trillion.

The S&P CNX Nifty touched a high and a low of 5,965.15 and 5,865.45 respectively.

The top gainers on the Nifty were Bajaj-Auto was up 2.24%, Ambuja Cement up 2.15%, Jindal Steel up 2.05%, Hindustan Uniliver up 1.71% and Sun Pharma was up 1.47%.

The top losers on the index were Hindalco down 2.76%, BHEL down by 2.67%, Cairn down by 2.11%, DLF down by 2.05% and HCL TECH down by 1.59% were the top losers.

The European markets were trading in green with, France’s CAC 40 up by 0.45%, Germany’s DAX up 0.55% and the United Kingdom’s FTSE 100 up by 0.20%.

Asian markets ended mostly in green on Tuesday, though the Chinese market remained in somber mood since start after China’s new yuan loans trailed forecasts last month, restraining the pace of recovery after a seven-quarter slowdown. Meanwhile, the Chinese currency yuan retreated from the upper limit of its trading band, reaching a one-week low on speculation of central bank’s intervention. However, most of the other indices ended in green. Traders in the region waited for progress on US budget talks and eyed Federal Reserve policy meet where the Fed is expected to add monetary stimulus.