Benchmarks end session on disappointing note; Sensex ends below 20,000 level

Tuesday turned out to be a disappointing session of trade for the Indian stock markets, as frontline indices, snapping three consecutive days of rally, ended the session near their intraday low with a fall of over half a percent. Profit booking, at higher levels, mainly spoiled the mood with all the sectoral indices on the BSE ending in red. Though, markets traded in the green terrain during first half as foreign institutional investors (FIIs) remained net buyers of Indian stocks on January 21, 2013 and bought shares worth a net Rs 842.95 crore. Some strength also came in from currency markets front after the rupee, gained sharply against the dollar after the government hiked import duty on gold to contain rising current account deficit. The rupee traded at 53.44, its highest level since October 2012.

However, disappointing cues from European market took their toll on domestic sentiments in second half and dragged the frontline gauges below the psychological 6,050 (Nifty) and 20,000 (Sensex) levels. Investors mainly resorted to profit booking following the decline in European markets. European counters traded lower in early deals as investors awaited a cue from key US earnings releases later in the day before attempting fresh push towards new 2-year highs. Asian markets too ended mostly in the red after the Bank of Japan (BOJ) announced the results of its latest policy meeting. The spotlight in Asia fell on the BOJ, which doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, surprising markets that had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending program.

Back home, selling witnessed in banking counters also dampened the sentiments after the global ratings agency Moody’s in its Asia-Pacific Banking Outlook said that it has a negative outlook on the country’s banking system due to concerns over asset quality and the high interest rates. Listed jewellery companies too bore the brunt of investor ire following the import duty hike on gold to 6 percent from 4 percent. Companies such Gitanjali Gems, Rajesh Exports, Shree Ganesh Jewellery House, Titan Industries and P C Jewellers all edged lower during the day’s trade. The government increased the customs duty on gold and platinum by 200 basis points in a move aimed at curtailing imports of the two metals. Gold was one of the biggest contributors to the spiraling current account deficit which stood at 5.4 percent of the gross domestic product in the July-September quarter.

However, losses remain capped to some extent as stocks of retail companies such as Pantaloon, Shopper’s Stop and Provogue India edged higher after Swedish major IKEA received Foreign Investment Promotion Board (FIPB) clearance for its Rs 10,500 crore investment in the country. This is the largest investment proposal in the single brand retail category so far.

The NSE’s 50-share broadly followed index Nifty declined by over thirty points to end below the psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by about one hundred and twenty points to finish well below the psychological 20,000 mark. Moreover, broader markets too butchered badly and snapped the session with a cut of about a percent.

The overall volumes stood above Rs 1.93 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favor of declines as there were 853 shares on the gaining side against 1,479 shares on the losing side while 673 shares remain unchanged.

Finally, the BSE Sensex lost 120.25 points or 0.60% to settle at 19,981.57, while the S&P CNX Nifty declined by 33.80 points or 0.56% to end at 6,048.50.

The BSE Sensex touched a high and a low of 20,156.86 and 19,952.91, respectively. The BSE Mid cap index declined by 0.91% and Small cap index was down by 0.81%.

The top gainers on the Sensex were, Sun Pharma up by 1.55%, NTPC up by 1.45%, Jindal Steel up by 0.53%, Mahindra & Mahindra up by 0.41% and Bajaj Auto up by 0.37%, while, Gail India down by 4.47%, Hindustan Unilever down by 2.88%, Hindalco down by 2.44%, Tata Motors down 1.46% and SBI down by 1.34% were the top losers on the index.

There were no gainers on the BSE Sectoral space, while Realty down 1.98%, Consumer Durables (CD) down 1.93%, FMCG down 1.30%, PSU down 0.91% and Capital Goods (CG) down 0.86% were top losers on the sectoral space.

Meanwhile, the government will soon appoint a coal regulator to monitor the fuel pricing, sampling and other practices in the sector. An inter-ministerial panel headed by Finance Minister P Chidambaram met and planned to set up the coal regulatory authority. During the meeting, issues such as the pricing of coal and bringing on the selection board a representative from the Power Ministry were raised and discussed. Meanwhile, the discussions are underway and the government may soon appoint a coal regulator.

The setting up of an independent regulator for the coal sector is considered important for improving the competitiveness in e-auctions, fixing guidelines for price revision, setting trading margins and increasing transparency in the allocation of reserves. Further, the Power Minister Jyotiraditya Scindia, who also attended the meeting, said 'Power Ministry and Planning Commission will be working on the draft of the coal regulator and will be meeting shortly to close on that. Next Group of Ministers (GoM) meeting will be the final meeting.'

Earlier, the GoM meeting on Coal Regulator bill, which was to be held on January 4, was deferred due to unavailability of a few ministers. The Cabinet had referred the draft Bill to a ministerial panel for setting up a regulatory authority for the coal sector. Earlier a meeting on December 18 was also postponed due to winter session of parliament.

The S&P CNX Nifty touched a high and a low of 6,101.30 and 6,040.50 respectively.

The top gainers on the Nifty were Asian Paints up by 2.96%, ACC up by 2.00%, NTPC up by 1.73%, Kotak Bank up by 1.57% and Sun Pharma up by 1.53%.

The top losers of the index were HUL down by 6.45%, GAIL down by 4.82%, HCL Tech down by 2.71%, Cairn down by 2.38% and Hindalco down by 2.32%.

The European markets were trading in red, France’s CAC 40 down by 0.30%, United Kingdom’s FTSE 100 down by 0.03% and Germany’s DAX down by 0.48%.

Asian equity markets ended mostly lower on Tuesday, after the Bank of Japan (BOJ) set a 2% inflation target and made an open-ended commitment to buy assets but delayed action on that pledge until next year. Japan’s Nikkei went home with red mark as the yen strengthened following the BOJ’s announcement, hurting exporters such as carmakers. Chinese shares closed in negative territory, paring gains after Beijing released data showing the economy grew faster than expected last year. However, Seoul closed higher, while Hong Kong was also barely changed.