Post Session: Quick Review

Paring all the gains by the end of the trade, benchmark equity indices settled lower for third consecutive session on Tuesday. Markets after trading firm for most part of the session reversed gears in the last hour of trade. Massive selling in Consumer Durable, Banking and Realty counters mainly led to underperformance of Indian equity markets as compared to rest of the globe. Benchmark 30 share index, Sensex and 50 share index Nifty, losing over quarter of a percent, settled below the crucial 19550 and 5950 levels respectively. While, broader indices, coming off from day’s high settled on mixed note, Midcap index ended flat with negative bias and Small cap index with gains of just about a quarter of a percent.  Banking stocks exerted pressure on the market after RBI Governor D Subbarao said that the Apex Bank plans to take early action against banks whose officials were recently caught on tape in a sting operation willing to indulge in serious violation of banking norms.

On the global front, Asian pacific shares mostly ended higher amid optimism the Federal Reserve will maintain record monetary stimulus. Meanwhile, European shares rebounding from a one-month low, edged higher on Tuesday as Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank is committed to its stimulus program. U.S.

Closer home, markets showed quick recovery after a weak start and traded with vigor till late noon deals on selective buying by investors amidst positive global cues. However, the selling pressure in the last hour of trade washed away all the gains and dragged the bourses below the neutral line. Stocks from Health Care, Capital Goods and Fast Moving Consumer Goods counters limited those losses to some extent. Shares in pharmaceutical gained on account of value-buying and expectations that promoters may increase stake in some companies. Prominent gainers were Ranbaxy Laboratories, Cipla, GSK Pharma, etc. Additionally, the downtrend of the markets also remained capped on account of gains of shares of companies which may apply for banking licenses after the Reserve Bank of India (RBI), said the validity of in-principle approval for new banks has been extended to 18 months from one year. IDFC, IFCI, L&T Finance Holdings, LIC Housing Finance and Reliance Capital all rallied in the range of 0.50-1.50%.  Shares of footwear retailer too gained traction after Bata India jumped over 6%. On the flip side, besides banking and Consumer Durable, shares from realty counter lost steam by the end of the trade on reports that Union Cabinet would today consider a bill to set up a regulator for the real estate sector with provisions for jail term for the developer for putting out misleading advertisements about projects. Meanwhile, Jewellery stocks, PC Jeweller, TBZ and Titan Industries came under pressure towards end of the trade after Reserve Bank of India said that it would extend the restrictions on the import of gold on consignment basis by banks to all nominated agencies and trading houses.  The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1119: 1215, while 162 scrips remained unchanged. (Provisional)

The BSE Sensex lost 64.70 points or 0.33% to settle at 19545.78.The index touched a high and a low of 19742.70 and 19522.47 respectively. Among the 30-share Sensex pack, 14 stocks gained, while rest of 16 declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.09% and 0.35% respectively. (Provisional) On the BSE Sectoral front, Health Care up by 2.12%, Capital Goods up by 0.93%, Power up by 0.55% and FMCG up by 0.35%, were the only gainers, while Consumer Durables down by 1.18%, Bankex down by 0.98%, Realty down by 0.89%, IT down by 0.57% and Auto down by 0.52%, were the top losers in the space. (Provisional)

The top gainers on the Sensex were Dr Reddys Lab up by 1.88%, Cipla up by 1.83%, Wipro up by 1.80%, L&T up by 1.56% and Mahindra & Mahindra up by 1.13%, while, Tata Motors down by 2.34%, SBI down by 2.11%, Jindal Steel down by 1.98%, HDFC down by 1.61% and Sterlite Industries down by 1.40% were the top losers in the index. (Provisional)

Meanwhile, disappointing the corporate aspiring for banking licences, the Reserve Bank of India (RBI) said it will look for very high quality applications to issue new bank permits and may not be possible to issue licences to all eligible applicants. Further, on timeline for granting in-principle approval for bank licence, RBI said, it will not be possible to indicate the timeline for grant of in-principle approvals at this stage. Applicants have to submit their applications by July 1 for evaluation to get new bank licences.

The central bank, which had issued final guidelines for issuing new banking licences on February, came up with clarifications to various queries. The RBI has extended the validity of in-principle licence nod from 12 months to 18 months and clarified that the companies which would be eligible to apply must have a public shareholding of at least 51 per cent.

Besides this, the intending applicants would have to approach other regulators to bring in entities regulated by them under the bank holding company. The RBI’s notification further said that only non-financial services companies and non-operative financial holding companies in the promoter Group would be allowed to hold shares in the holding company.

Further, the central bank added that it has received 443 queries from 34 individuals/organizations and most of the queries it received pertained to provisions on eligible promoters, 'fit and proper' criteria, foreign shareholding, regulatory requirements, on transition time to the new structure and corporate structure of the NOFHC among others. 

India VIX, a gauge for markets short term expectation of marginally lost 0.17% at 17.26 from its previous close of 17.29 on Monday. (Provisional)

The CNX Nifty lost 17.85 points or 0.30% to settle at 5,921.45. The index touched high and low of 5,981.60 and 5,910.25 respectively. 21 stocks advanced against 29 declining on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy up by 4.22%, Dr. Reddy's Laboratories up by 2.52%, CIPLA up by 2.42%, Lupin up by 2.03% and L&T was up by 1.78%. On the other hand, Tata Motors down by 2.53%, Axis Bank down by 2.51%, Sesa Goa down by 2.21%, SBI down by 2.07% and Ambuja Cements down by 1.91% were the top losers. (Provisional)

The European markets were trading in green; France’s CAC 40 was up by 0.53%, Germany’s DAX was up by 0.51% and the United Kingdom’s FTSE 100 edged higher by 0.72%.