January F&O series ends on disappointing note; Sensex closes below 19,900 mark

January series futures and options expiry turned out to be an extremely disappointing affair for the Indian stock markets as the benchmarks capitulated to the unrelenting selling pressure amid high volatility. However, markets for the monthly F&O series accumulated gains of over 3 per cent. The hefty sell-off witnessed in last leg of trade dragged the key indices below the psychological 6,050 (Nifty) and 19,900 (Sensex) levels. Investors resorted to ruthless position squaring from the banking and oil & gas counters in the final hour of trade as sentiment got hurt after country’s FY12 GDP growth was revised to 6.2 per cent from 6.5 per cent. While, the government pegged FY12 gross domestic savings at 30.8 per cent, down from 34 per cent earlier. Sentiments were also hit coupled with looming concerns over global growth slowdown after weak economic data from US and Germany.

Selling got intensified after European stock markets traded lower in the early deals after drop in German retail sales and a huge quarterly loss from Deutsche Bank, country’s biggest lender, dashed hopes of a quick rebound. While, most of the Asian equity indices shut shop in the red on Thursday on the back of weak set of earnings reports and downbeat economic data from the US. South Korea’s Kospi ended marginally lower on worries about the impact on the nation’s exporters as a weakening yen improved prospects for their Japanese counterparts.

Back home, the risk appetite remained frail after the Reserve Bank of India in its third-quarter monetary policy review made further rate cuts conditional on government moves to control fiscal deficit. Selling in software and technology counters too dampened the sentiments as stocks like Infosys, TCS, Wipro and HCL Technologies all edged lower after rupee appreciated by 9 paise to 53.21 per dollar on mild selling of dollars from banks and exporters in view of persistent capital inflows from foreign funds. 

However, losses remain capped as stocks of oil and gas sector like BPCL, IOC, Oil India, ONGC and Gail India all edged higher after a Cabinet’s panel for promoting investment by cutting red tape has asked the oil and defence ministries to resolve within a month their differences over allowing oil hunt in 47 blocks and seek fresh approval. Some strength was also provided by sugar sector as stocks like, Shree Renuka Sugar, Bajaj Hindustan, Balrampur Chini, EID Parry and Rana Sugar all rallied after the government increased the sugarcane price that mills are required to pay farmers by 23.5 per cent to Rs 210 per quintal for the year starting October 2013.

The NSE’s 50-share broadly followed index Nifty lost over twenty points to end below its psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by over one hundred and ten points, ending below its psychological 19,900 mark. However, the broader markets too traded weak and snapped the session mixed. The market breadth remained in favor of advances as there were 1,093 shares on the gaining side against 1,066 shares on the losing side while 791 shares remain unchanged.

Finally, the BSE Sensex lost 110.02 points or 0.55% to settle at 19,894.98, while the S&P CNX Nifty declined by 21.00 points or 0.35% to end at 6,034.75.

The BSE Sensex touched a high and a low of 20,008.83 and 19,865.72, respectively. The BSE Mid cap index up by 0.54% and Small cap index was down by 0.11%.

The top gainers on the Sensex were, BHEL up by 2.36%, Sun Pharma up by 1.33%, Hero MotoCorp up by 1.31%, ITC up by 1.25% and Gail India up by 1.03%, while Tata Power down by 2.17%, ICICI Bank down by 1.93%, HDFC Bank down by 1.87%, Bharti Airtel down 1.52% and RIL down by 1.39% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up 1.38%, PSU up 1.02%, Consumer Durables up 0.61%, FMCG up 0.61% and Power up by 0.46%, while Bankex down 0.42%, Oil & Gas down 0.42%, IT down 0.26%, TECk down 0.23% and Capital Goods down 0.16% were top losers on the sectoral space.

Meanwhile, Prime Minister Manmohan Singh headed first meeting of the newly formed Cabinet Committee on Investment (CCI) failed to break the logjam over defence clearances to oil and gas activities in 39 offshore areas, including Reliance Industries' producing KG-D6 fields. During the meeting, Manmohan Singh asked the ministries of petroleum and defence to sort out differences on allowing exploration and production particularly in Krishna Godavari basin.

The CCI, which was constituted to expedite the clearance for infrastructure projects of Rs 1,000 crore or more took up issue of defence ministry, declaring 6 blocks in KG basin including KG-D6 producing fields and one in NEC or North East Coast region (RIL's gas discovery area of NEC-25) as ‘No-Go’ areas and putting stringent conditions on 32 other blocks.

Earlier, Defence Ministry had declared 14 blocks as 'No-Go' areas as they were close to proposed naval base or missile launching range/air force exercise area. But later the Defence Ministry agreed for exploration of 7 blocks in Mahanadi basin. Further, one more block which was previously objected by the Commerce Ministry too was cleared.

Regarding these issues, even I&B Minister Manish Tewari said ‘there were certain areas where certain problems were identified and therefore the Ministry of Petroleum and Natural Gas has been tasked with responsibility of sitting down with the Ministry of Defence and resolving some of the problems which are there with regard to 39 blocks’. Further, he said that specific timelines have been fixed for both ministries and asked to come back to CCI within one month. 

The S&P CNX Nifty touched a high and a low of 6,058.05 and 6,025.15 respectively.

The top gainers on the Nifty were PNB up by 10.24%, Bank of Baroda up by 4.11%, BHEL up by 3.16%, DLF up by 2.60% and GAIL up by 1.75%.

The top losers of the index were Tata Power down by 2.37%, HDFC Bank down by 2.08%, Bharti Airtel down by 2.06%, ICICI Bank down by 1.93% and HUL down by 1.52%.

The European markets were trading in red, France’s CAC 40 down by 0.66%, United Kingdom’s FTSE 100 down by 0.40% points and Germany’s DAX down by 0.33%.

Asian shares took a breather from the recent rallies and ended mixed on Thursday, after weak set of earnings reports and downbeat economic data from the US Japan’s Nikkei went home with green mark amid positive factory output in December, while Taiwan closed higher as on posting its best growth in five quarters on improved demand for the island's electronics exports and stronger consumption. South Korea’s Kospi ended marginally lower on worries about the impact on the nation’s exporters as a weakening yen improved prospects for their Japanese counterparts.