Benchmarks snap three days gaining streak on penultimate day of May F&O expiry

Snapping their three days rally, Indian equity indices ended the session slightly in red on Wednesday as investors opted to book their profits on penultimate day of the expiry of May F&O series. Key benchmark indices reversed direction after a positive start in the absence of any positive trigger. Meanwhile, traders remained little concerned, ahead of the government’s announcement of the FY13 GDP numbers on May 31, economists have forecast sub-five per cent readings in the March quarter GDP that takes the overall economic expansion in FY13 to a decade low of around five per cent. Though, after hitting fresh intraday low in early afternoon trade, frontline gauges showed some recovery in late trade on selective buying in heavyweights like Sun Pharmaceuticals, Hero MotoCorp and Coal India.

Sentiments also remained down-beat as banking counter declined by over half a percent after Income Tax department issued notices to three top private lenders in the country -- ICICI Bank, Axis Bank and HDFC Bank -- in connection with alleged money laundering charges leveled by online portal Cobrapost. The department has asked these banks to produce documents for verification as part of its tax evasion probe.

Global cues too remained sluggish with European markets trading lower as investors remained on sidelines ahead of the release of a raft of economic data. Sentiments also remain dampened after, in France, a government survey showed that consumer confidence had dropped to its lowest since July 2008. France went into recession earlier this month, for the second time in four years. Meanwhile, most of the Asian equity indices ended the session in green following overnight rally in US stocks to record highs on signs of resilience in the US economy.

Back home, sentiments also remained somber after the Indian rupee fell by 22 paise to trade at fresh ten-month low of 56.29 against the US dollar during the trade on the Interbank Foreign Exchange due to month-end demand for the US currency from importers and banks. Some pressure also came in from selling in metal space after the International Monetary Fund (IMF) cut its growth forecast for China this year to 7.75% from 8%, citing a weak global economy and exports, adding to concerns that the world's second-largest economy is losing momentum. China is the world's largest consumer of copper and aluminum. However, the downside remain capped as some buying was witnessed in fast moving consumer goods sector after India Meteorological Department (IMD) forecasted that conditions are again favorable for the advance of the southwest monsoon towards India after nearly a week-long lull from May 29, 2013.

The NSE’s 50-share broadly followed index Nifty slipped by about six points to hold its psychological 6,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by ten points to finish tad below the psychological 20,150 mark. Moreover, broader markets too traded in-line with benchmarks and snapped the day’s trade slightly in red.

The market breadth remained in favor of declines as there were 1,025 shares on the gaining side against 1,342 shares on the losing side while 137 shares remain unchanged.

Finally, the BSE Sensex lost 13.18 points or 0.07% to settle at 20,147.64, while the CNX Nifty declined by 6.95 points or 0.11% to end at 6,104.30.

The BSE Sensex touched a high and a low of 20,216.49 and 20,044.74, respectively. The BSE Mid cap index down by 0.39% and Small cap index was down by 0.16%.

The top gainers on the Sensex were, Sun Pharma up by 7.09%, Tata Motors up by 2.69%, Hero MotoCorp up by 2.39%, Coal India up by 1.30% and Cipla up by 1.26%, while Sterlite Industries down by 2.53%, Tata Steel down 2.27%, Jindal Steel down 1.98%, Gail India down 1.50% and ICICI Bank down by 1.38% were the top losers on the index. 

The top gainers on the BSE Sectoral space were Health Care up 1.82%, Consumer Durables up 0.82%, FMCG up 0.58%, Auto up 0.34% and Oil & Gas up 0.12%, while Realty down 2.50%, Metal down 1.13%, Bankex down 0.82%, Power down 0.77% and IT down 0.64% were the top losers on the sectoral space.

Meanwhile, to increase domestic production of coal, the government is examining two-three models, suggested by Planning Commission and the Finance Ministry on having public-private-partnership (PPP) model in the coal sector. Coal Secretary S K Srivastava said that ministry has already convened 2-3 meetings on it and is trying to see as to how it can involve the private sector along with Coal India for improving the coal production in the country.

Earlier in March, the government had set up a nine-member committee under the chairmanship of Coal Secretary to devise a policy framework under PPP or increasing domestic coal production. The panel constituted members from various ministries including Law, Labour and Finance among others. 

Earlier, Finance Minster, in his Budget speech had stated the need to devise a PPP policy framework to reduce the country’s increasing dependence on imported coal in the medium to long-term. India imported around 135 million tonnes of thermal and coking coal in FY13, up around 28% from a year earlier, as domestic supply fell short of surging demand in Asia's third-largest economy.

Last fiscal, Coal India (CIL) which accounts for over 80 per cent of the domestic coal output, missed its production target of 464.1 million tonnes by 11.9 million tonnes. In India, coal is the main source for power production and the coal supply in country has failed to keep pace with the requirement of the domestic power sector. 

The CNX Nifty touched a high and a low of 6,125.05 and 6,069.80 respectively. 

The top gainers on the Nifty were Sun Pharma up by 7.03%, Tata Motors up 2.77%, Hero MotoCorp up 1.80%, Coal India up 1.42% and Lupin up by 1.13%.

On the flip side, the top losers of the index were, JP Associates down 3.91%, Ranbaxy down 3.11%, Grasim down 2.86%, Tata Steel down 2.73% and Jindal steel down by 2.58%.

The European markets were trading in red, France’s CAC 40 down by 1.19% and Germany’s DAX down by 1.09% and the United Kingdom’s FTSE 100 down by 1.21%.

Asian equity markets ended mostly higher on Wednesday with investors remaining cautiously as strong economic data rallied US stocks to record highs, throwing market focus back to the possibility of reduced Federal Reserve monetary stimulus in the future. Chinese market went home with green mark for the fourth day, led by consumer-discretionary companies. Hong Kong market closed lower after two straight days of gains, as some consumer and property shares came under profit-taking pressure.