Benchmarks end lower for fourth straight session on sluggish global cues

Indian equity indices, extending their losses for the fourth straight session, snapped the day’s trade with a cut of about half a percent due to sluggish global cues. Discouraging US factory orders coupled with worries that the political uncertainty could impede the euro zone’s efforts to resolve the debt crisis in the region dampened the investors’ sentiments. However, the key gauges found strong support around the crucial 5,950 (Nifty) and 17,650 (Sensex) levels and spent the whole session consolidating their positions around those levels.

Asian markets shut shop mostly in the red as investors took profits from recent rallies, while the yen got a respite from broad-based selling. Japanese Nikkei share average, snapping a five-day winning streak declined by about two per cent. However, some support to the domestic markets came in from European counters which made a spectacular recovery in opening deals after a flat start, with investors digesting a raft of earnings reports from some of the region’s heavyweights.

Back home, some recovery was seen in the market as sentiments got support from India’s services sector data which logged a growth at its strongest pace in year during January. Marking a 45-month expansionary sequence, the seasonally adjusted HSBC Services Business Activity Index came at 57.5 in January, up from 55.6 in the previous month. But, it was not enough to bring the frontline gauges into the green terrain as optimism got fizzled out on concern that PSU disinvestment and reduction of promoter stake to meet the Securities & Exchange Board of India (SEBI) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. Sentiments could not firm up despite Finance Minister P Chidambaram reiterating his commitment to controlling spending, especially at a time when India faces fiscal and current account deficits. Traders also remained cautious ahead of advanced economic growth estimates for the current fiscal year (FY13) which will be released on Thursday.

Some pressure also came in from banking counter as the sector tumbled over half a percent on the back of RBI’s new draft guidelines for restructured loans which are likely to hit earnings of banks by at least 3-8 per cent over the next two years, as banks would need to step up provisioning on restructured loans by 1 per cent from FY’14 to 3.75 per cent and to 5 per cent by FY’15 on the existing stock of restructured loans. However, losses remained capped to certain extent as sentiments got some support from rally in Cement stocks. Scrip of ACC, Ambuja Cement, UltraTech Cement, India Cements, Birla Corporation, Prism Cement, Shree Cement edged higher after Union Housing Minister indicated that affordable housing projects in big cities like Mumbai and Delhi may soon be given infrastructure project status, a move that is going to boost such initiatives as clearances from the state government will become a lot easier.

The NSE’s 50-share broadly followed index Nifty lost thirty points to end tad above its psychological 5,950 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex declined by ninety points, ending below its psychological 19,700 mark. Moreover, the broader markets too traded weak and snapped the session with a cut of between 0.50-1 per cent. The market breadth remained in favor of advances as there were 819 shares on the gaining side against 1,417 shares on the losing side while 717 shares remain unchanged.

Finally, the BSE Sensex lost 91.37 points or 0.46% to settle at 19659.82, while the S&P CNX Nifty declined by 30.35 points or 0.51% to end at 5,956.90.

The BSE Sensex touched a high and a low of 19717.26 and 19631.97, respectively. The BSE Mid cap index declined by 0.66% and Small cap index was down by 1.01%.

The top gainers on the Sensex were, Sun Pharma up by 4.06%, Gail India up by 1.64%, Bajaj Auto up by 1.49%, Cipla up by 1.18% and SBI up by 0.57%, while BHEL down by 3.19%, Bharti Airtel down by 1.93%, Sterlite Industries down by 1.73%, Tata Motors down 1.64% and ITC down by 1.58% were the top losers on the index.

The only gainer on the BSE Sectoral space was Healthcare up 0.86%, while Consumer Durables down 1.57%, FMCG down 1.03%, Power down 0.75%, Metal down 0.74% and Oil & Gas down 0.65% were top losers on the sectoral space.

Meanwhile, the commerce ministry has notified the government’s decision that export of processed and value added agriculture products such as wheat flour, butter, cheese, and oats will not be banned even though shipments of basic items are not allowed.

Directorate General of Foreign Trade (DGFT) listed 10 processed and value-added agricultural products that would be exempt from export curbs with immediate effect. These include wheat flour, cereal flour, cereal groats and meal pellets, milk products (including casein), butter, cheese and curd, value added products of onion, peanut butter and other cereal items.

DGFT in its notification said that “export of above processed and value added agricultural products will be exempted from any restriction even in the event of restriction/ban on the export of basic farm produce”.

The exports of processed and/or value added products constitute a very miniscule portion of the overall exports and hence their continuation would not affect the availability in the domestic market. However, the government had also, last week, allowed export of premium edible oils from the country even as it kept the ban of export of such oils in their raw or basic form.

The S&P CNX Nifty touched a high and a low of 5,970.35 and 5,946.90 respectively.

The top gainers on the Nifty were Sun Pharma up by 3.70%, Ambuja Cement up by 3.05%, ACC up by 1.88%, Ultratech Cement up by 1.56% and GAIL up by 1.52%.

The top losers of the index were JP Associates down by 4.27%, BHEL down by 3.49%, Bank of Baroda down by 2.38%, Tata Power down by 1.94% and Bharti Airtel down by 1.83%.

The European markets were trading in green, France’s CAC 40 up by 0.74%, United Kingdom’s FTSE 100 up by 0.34% and Germany’s DAX up by 0.02%.

Asian stock markets ended mostly lower on Tuesday as Wall Street and European shares were hit by political concerns in Spain and Italy. Japanese stocks closed lower snapping the recent rallies on the back of weak yen as investors looked to book profits. Hong Kong ended lower, weighted down by Sinopec Corp, which plummeted 2.9 % after the Chinese state-owned oil company, Asia's biggest refiner, said it was raising $3.1 billion through a share placement. In mainland China, the Shanghai Composite went home with green mark amid positive economic data.