Post Session: Quick review

Volatility ruled the roost on the penultimate session of F&O expiry, with benchmark equity indices slipping considerably below the neutral line in the wee hours of trade, to end the session with a cut of over half a percent on Wednesday. After see-sawing throughout the session, indices faltered approaching the closing hours of trade largely hurt by the depreciation of Indian currency, which stroke an all time low level of 60/$ despite RBI’s intervention apparently, as some bank’s stop loss were triggered around those levels.  Underperforming rest of the globe, benchmark indexes Sensex and Nifty, after taking a breather in the previous session, witnessed major losses to finish below the crucial 18,600 and 5,600 levels respectively.

On the global front, Asian shares turned around a four-day losing streak and rose on Wednesday after China's central bank assured it will offer funds to banks if needed, but lingering fears of a credit crunch and slower loan growth led to sell-off at Shanghai market, which ended with loss of around half a percent. Meanwhile, European shares, reversing a negative start, were trading in green tracing the optimism of Asian counterparts, with market's recovery tempting back some longer-term players and with the break of technical levels helping the move.

Closer home, market-men shunned early upmove seen on account of approval of overhaul of foreign investment rules including easing registration procedures and simplifying categories, by the market regulator, remained more circumspect ahead of the release of  Jan-March Balance of Payments (BoP) data due Friday. Meanwhile, gains of stocks belonging from Information Technology, Power and Technology stocks were offset by the massive losses in stocks belonging to Auto, Metal and Capital Goods space. IT stocks bucking the negative trend emerged as the star performer of the session, largely led by the gains of Tech Mahindra and Satyam Computers shares. Both the shares rallied over 2% after software firm Mahindra Satyam, a leading global consulting and IT services provider, on Tuesday formally announced its merger with Tech Mahindra, creating India’s fifth-largest IT services firm. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 951: 1361, while 144 scrips remained unchanged. (Provisional)

The BSE Sensex lost 109.33 points or 0.59% to settle at 18519.82.The index touched a high and a low of 18690.50 and 18514.35 respectively. Among the 30-share Sensex pack, 10 stocks gained, while 20 stocks declined. (Provisional)

Broader indices concluded in red; BSE Mid cap and Small cap indices were down by 0.81% and 0.39% respectively. (Provisional) On the BSE Sectoral front, IT up by 2.06%, Power up by 0.84%, Teck up by 0.62% and FMCG up by 0.59% were the only gainers, while Auto down by 1.83%, Metal down by 1.39%, Capital Goods down by 1.34%, Bankex down by 1.31% and Consumer Durables down by 1.25% were the top losers. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 3.89%, TCS up by 3.28%, Gail India up by 2.73%, NTPC up by 1.99% and Infosys up by 1.30%, while, Bharti Airtel down by 6.03%, Mahindra & Mahindra down by 4.85%, Tata Motors down by 3.37%, Jindal Steel down by 3.23% and  Hindalco Industries down by 2.69% were the top losers in the index. (Provisional)

Meanwhile, the Securities and Exchange Board of India (SEBI) has tightened share buyback norms to make the process more credible. SEBI has made it mandatory for companies to buy back at least 50 per cent of the proposed offer size; up from 25 percent required currently and to complete the process within six months. The capital market regulator has also said that the company will have to keep 25 percent of the identified funds in an escrow account and that there will be a one-year cooling-off period between two buybacks and companies will not be allowed to raise funds during that period.

The regulator’s decision to revise the buyback guidelines comes on the heels of need to regulate the quantity, pricing and the periodicity aspects of the buyback offers in the past. Share buyback process involves a company repurchasing its own outstanding shares in a bid to reduce the total shares in the market, which usually boosts the share price as the earnings per share go up. However, SEBI noticed that firms used the tool to artificially raise the stock price and mostly dishonored the offer. The new SEBI’s norms are expected to keep buyback offers at bay.

SEBI has also simplified the foreign investment rules to revive capital inflows into the country. It approved the creation of single category of overseas investors called the Foreign Portfolio Investor (FPI), which would include foreign institutional investors as well as qualified foreign investors. As per the new norms, FPIs’ stake in the company should not be more than 10 percent and purchase above this limit will be regulated under the foreign direct investment rules. Recently, the foreign institutional investors (FIIs) have pulled out Rs 10,000 crore only in the last 11 trading sessions on worries that the US Fed will stop its quantitative easing programme.

India VIX, a gauge for markets short term expectation of marginally lost 0.33% at 21.07 from its previous close of 21.40 on Tuesday. (Provisional)

The CNX Nifty lost 27.85 points or 0.50% to settle at 5,581.25. The index touched high and low of 5,635.25 and 5,579.35 respectively. 19 stocks advanced against 31 declining on the index. (Provisional)

The top gainers on the Nifty were TCS up by 3.86%, Hero MotoCorp up by 3.84%, Asian Paints up by 3.82%, Power Grid up by 2.81% and HCL Tech up by 2.69%

On the other hand, Bharti Airtel down by 5.91%, M&M down by 5.10%, Kotak Bank down by 4.50%, IndusInd Bank down by 4.17% and Ranbaxy Laboratories down by 3.66%.

The European markets were trading in green; France’s CAC 40 up by 1.81%, Germany’s DAX up by 1.68% and the United Kingdom’s FTSE 100 up by 1.15%.