Benchmarks snap two days winning streak

Snapping two days winning streak, key domestic benchmarks ended the volatile session of trade with a cut of over half a percent as market participants opted to book their profits ahead of the US Fed meet which begins later today. The frontline gauges, after trading negatively in first half, pared their initial losses and entered into green terrain as some support came in after the government approved 16 projects envisaging foreign investment worth Rs 1,647 crore, while deferring Punj Lloyd’s proposals for lack of security clearance. Sentiments also got underpinned on report that indirect tax collection in May grew by 4 per cent to Rs 37,695 crore. On category wise, customs duty collection for the month stood at Rs 14,997 crore, while service tax and excise duty collections were Rs 8,998 crore and Rs 13,700 crore.

Some support also came in to the domestic bourses as European markets, after a negative start, pared most of their losses in early deals. Most of the Asian share markets too ended in green as investors awaited the outcome of the two-day Federal Reserve meeting starting from June 18, 2013. Mainland China markets eked slim gains, but short-term funding costs remained sky high despite a negligible cash injection by the People’s Bank of China. The cash squeeze could stay until early July as the quarter-end looms.

Back home, profit booking emerged in the late trade dragged the bourses in red and markets ended the session near their intraday lows. Sentiments got clobbered after Indian rupee depreciated below 58.50 per dollar mark at Interbank Foreign Exchange market due to dollar demand from custodian banks, oil importers and defense related payments. Selling in power counter also dented sentiments. Stocks like BHEL, GMR Infra, NTPC, Lanco Infra and NHPC declined after the Ministry of Coal (MoC) issued show cause notices to two more coal blocks in Odisha over delay in developing the mines, continuing its crackdown on non-serious allocatees. Interest rate sensitive banking stocks edged lower after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio unchanged at its mid-quarter review of monetary policy on June 17, 2013.

However, the losses remain capped after telecom shares gained as the new roaming regulations were seen as less stringent than expected and with a negligible financial impact. Country’s telecom regulator on Monday said it would allow carriers to offer free nationwide mobile roaming to subscribers for a fixed fee from July 1, in a partial relief to operators, some of whom had opposed a proposal to completely abolish roaming charges.

The NSE’s 50-share broadly followed index Nifty declined by about forty points to end below the psychological 5,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over one hundred points to end below its crucial 19,250 mark.

However, broader markets outperformed benchmarks and snapped the session slightly in green. The market breadth has been evenly divided as there were 1,159 shares on the gaining side against 1,161 shares on the losing side while 146 shares remain unchanged.

Finally, the BSE Sensex lost 102.59 points or 0.53% to settle at 19,223.28, while the CNX Nifty declined by 36.45 points or 0.62% to end at 5,813.60.

The BSE Sensex touched a high and a low of 19,383.61 and 19,191.37, respectively. The BSE Mid cap index up by 0.03% and Small cap index was up by 0.25%.

The top gainers on the Sensex were, Tata Steel up by 2.89%, Bajaj Auto up by 1.81%, Tata Power up 1.15%, Infosys up 1.08% and Hero MotoCorp up by 1.02%, while NTPC down by 2.20%, Bharti Airtel down 1.67%, GAIL down 1.59%, HDFC Bank down 1.48% and ONGC down by 1.47% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Metal up 0.75%, TECk up 0.67%, IT up 0.57% and Health Care up 0.05%, while Bankex down 1.20%, Consumer Durables down 1.09%, PSU down 0.91%, Capital Goods down 0.86% and Power down 0.64% were the top losers on the sectoral space.

Meanwhile, the government has allowed special economic zone (SEZ) units to export gold items after a minimum value addition of 3 per cent in gold jewellery and 5 per cent in gold and precious stone studded jewellery. Earlier, this provision was only applicable for gold units outside the special zones.

Earlier, in April, Commerce Ministry had banned SEZs for gold trading to check misuse of tax benefits by them as SEZs are allowed duty-free imports. It is reported that SEZ units were earning arbitrage profits as high as 7.5 per cent by diverting imported gold to the domestic market.

Commerce Secretary S R Rao said that the move would help in boosting India’s gold exports particularly jewellery as gold exports from SEZs in May declined by about $0.8 billion.

Presently, the government is worried over the high gold import, which has touched 162 tonnes in May, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. High gold imports are also the main reasons behind high current account deficit and major fall in rupee value.

The CNX Nifty touched a high and low of 5,863.40 and 5,804.30 respectively. 

The top gainers on the Nifty were Tata Steel up by 2.65%, Infosys up 1.38%, Sesa Goa up 1.11%, Bajaj Auto up 1.01% and Kotak Bank up by 0.93%.

On the flip side, the top losers of the index were, Ranbaxy down 3.90%, NTPC down 2.69%, IndusInd Bank down 2.49%, PNB down 2.47% and Utra Tech Cement down by 2.47%.

The European markets were trading mixed, France’s CAC 40 down by 0.04%, Germany’s DAX up by 0.04% and the United Kingdom’s FTSE 100 up by 0.78%.

Asian stocks ended mostly higher after a thin and directionless trading on Tuesday as investors positioned themselves ahead of Fed Chairman Ben Bernanke's press conference tomorrow. However, Hong Kong's Hang Seng index ended little changed, as property developers drifted lower in Hong Kong after official data showed property prices in the mainland rose at the fastest pace in more than two years in major cities in May. Japan’s Nikkei closed with small losses after a choppy trading session. South Korea's Kospi went home with green mark as investors went for bargain hunting in blue-chip stocks after the benchmark index hit a fresh seven-month low the previous day.