Indian markets gets slaughtered on F&O expiry; deposes about 1.5%

Thursday turned out to be another disappointing session for the Indian equity indices which got pounded by around one and half percentage point on the last day of July series Futures and Options. Indian barometer gauges, prolonging their southward journey for second consecutive session, witnessed blood bath and closed near their lowest level in almost two weeks, breaching major crucial support levels 19,850 (Sensex) and 5,950 (Nifty) on feeble global cues. After a negative opening, the domestic bourses never looked in recovery mood and continued sliding till end, closing near the lowest point of the day. Selling was both brutal and wide-based as, barring software and technology; none of sectoral indices on BSE could manage a green close. Counters, which featured in the list of worst performers, include fast moving consumer goods, metal and healthcare. Sentiments also remained somber on report that foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on July 24, 2013.

Selling got intensified as European markets made a poor start, as investors trod cautiously before German and British data, which are expected to add weight to signs the continent’s economy is reviving. While, all Asian markets went home in red, with Japanese markets declining over a percentage point, led by over 6% fall in shares of the camera maker Canon after it lowered sales forecasts by 10 per cent late Wednesday.

Back home, sentiments remained down-beat with fast moving consumer goods counter bearing most of the brunt led by profit booking in ITC and Hindustan Unilever after recent rally. Selling in Metal counter continued for second straight day with shares of NMDC, Hindustan Zinc, Hindalco and Sterlite Industries edging lower after a private survey showed manufacturing weakened further in July in China.

Sentiments also got dented after cement companies plunged, led by 10% fall in Ambuja Cement after Swiss parent Holcim announced a major restructuring of its India operations. Weak Q2 earning also weighed on the stocks. Additionally, banking stocks, continuing previous session’s fall, lost some more ground in Thursday’s trade with stocks like, SBI, Yes Bank, PNB, ICICI Bank etc tumbling after the RBI in another measure to suck out liquidity from the system asked banks to maintain higher average CRR (cash reserve ratio) of 99 per cent of the requirement on daily basis as against earlier 70 per cent.

The NSE’s 50-share broadly followed index Nifty declined by over eighty points to end below the psychological 5,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by over two hundred and eighty points to finish below the psychological 19,850 mark. Moreover, broader markets too witnessed blood-bath and ended the session with a cut of about a percent.

The market breadth remained in favor of decliners, as there were 774 shares on the gaining side against 2,072 shares on the losing side while 115 shares remain unchanged.

Finally, the BSE Sensex shaved off 285.92 points or 1.42% to settle at 19,804.76, while the CNX Nifty plunged by 83.00 points or 1.39% to end at 5,907.50.

The BSE Sensex touched a high and a low of 20110.81 and 19763.90, respectively. The BSE Mid cap index was down by 0.89% and Small cap index was down by 0.71%.

The top gainers on the Sensex were, Hero MotoCorp up by 4.06%, Tata Motors up 0.79%, TCS up 0.60%, Infosys up 0.29% and Bajaj Auto up by 0.04%, while ITC down by 4.57%, Wipro down 4.01%, Hindustan Unilever down 3.21%, Tata Power down 3.19% and Su Pharma down by 2.99% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, TECk up 0.21% and Auto up 0.14%, while FMCG down 3.33%, Metal down 1.73%, Health Care down 1.64%, Oil & Gas down 1.35% and Capital Goods down 1.34% were the top losers on the sectoral space.

Meanwhile, at a time when the RBI’s different measures are making lending tough, worsening the situation of one of the most rate sensitive auto sector,  Heavy Industries Ministry has said that it will soon take up the issue with the Prime Minister and seek stimulus package to revive the sector.

Heavy Industries and Public Enterprises Minister Praful Patel, stressing the need to take immediate steps for arresting the decline in auto sales has said that “I would say that we will look at all the ways and means and talk to the Prime Minister and also the Finance Minister (in this regard)... There is no reason why we cannot see that auto industry gets a stimulus”. Patel further stated that manufacturing activities should be increased in the country,but high interest rates impact the financing of big projects and manufacturing competitiveness.

Earlier, the Automobile sector industry body, Society of Indian Automobile Manufacturers (SIAM) too had sought a stimulus package for the automobile sector from the government after car sales fell for record eight months in a row in June, declining 9 percent. Sales of vehicles across all categories dropped 5.1 percent to 14,07,767 units in June from 14,83,443 units a year earlier. This has forced domestic car manufacturers to cut down production numbers and lay off non-critical employees.

The CNX Nifty touched a high and low of 5,990.65 and 5,896.40 respectively. 

The top gainers on the Nifty were Hero MotoCorp up 4.41%, Asian Paints up 2.29%, BPCL up 1.22%, Tata Motors up 0.91% and Axis Bank up by 0.43%.

On the flip side, the top losers of the index were, Ambuja Cament down 10.62%, JP Associates down 9.31%, ITC down 4.74%, Hindustan Unilever down 3.66% and Tata Power down by 3.41%.

The European markets were trading in green, France’s CAC 40 down by 1.03%, the United Kingdom’s FTSE 100 down by 1.01% and Germany’s DAX down by 1.02%.

The Asian markets concluded Thursday’s trade in red tailing an overnight decline in stocks and commodities. Chinese shares closed lower in choppy trading, despite gains for railway-related companies after the central government vowed to fully open China’s railway construction market. This drop came even as Beijing unveiled new stimulus measures late on Wednesday, including tax cuts for small businesses. China’s job market showed some resilience in the first half despite economic difficulties, but officials warned that employment pressure remains high. The Ministry of Human Resources and Social Security spokesman Yin Chengji stated that China created more jobs in the first half compared with the same period last year. Figures from the ministry showed that China added 7.25 million jobs in the first six months of the year, an increase of 310,000 year on year. The registered urban unemployment rate stood at 4.1% at the end of the second quarter. Besides, new personal consumption loans soared in Shanghai in the first six months of this year mainly due to a surge in home transactions that have propelled new mortgages. The new personal consumption lending, including mortgages and auto loans, totaled 60 billion yuan ($9.7 billion) in Shanghai by the end of June, 50.8 billion yuan more from a year ago.

Nikkei plunged and investors unloaded shares amid concern about slow earnings growth and slack economic data. Jakarta Composite too ended the trade in red. The country’s rupiah fell to a four-year low on concern rising that US home sales will prompt the Federal Reserve to start reducing stimulus that has spurred demand for emerging-market assets. The Philippine import bill in May declined by 2.4% on year to 5.26 billion US dollars on back of a sharp decline in the value of electronics imports. Most of Philippine imports came from China, the US and South Korea. The trade gap in May narrowed to 364 million US dollars from 454 million US dollars deficit posted in the same period last year.

South Korean economy grew at the fastest pace in more than two years in the second quarter of this year as a turnaround in private consumption relieved the weak facility investment, central bank data showed. Real gross domestic product (GDP), the broadest measure of economic performance, expanded 1.1% in the second quarter from three months earlier after gaining 0.8% in the previous quarter, according to the Bank of Korea (BOK). The reading was the highest since 1.3% tallied in the first quarter of 2011, beating market consensus of 0.8%.