Markets give-up to profit booking; Nifty closes below 6200

It was mostly a one way slide for the Indian markets on Wednesday, when major indices after a positive start succumbed to profit booking. The local markets were also under pressure due to weakness in other global markets that prompted the investors take profit off the table. With most of the macro data announced, the trade remained largely concentrated on the second quarter earnings announcement of the India Inc and there were mainly result reaction in today’s trade. The major being Wipro, though it reported a decent profit numbers for the quarter ended September 30, but its revenue performance lagged to the top tier players, lost around five percent for the day, on the other hand Hero MotoCorp gained about a percent after reporting decent profit rise. There was a good recovery attempt supported by some bluechips in the last leg of trade but it failed to ramp up much support for the markets to bring them back in green.

In the global markets, the early enthusiasm fizzled out and the Asian markets after mostly a green start ended majorly in red with Shanghai and Hang Seng losing over a percent, while the Japanese Nikkei plunged close to two percent for the day. Chinese market was pummeled due to fall in smaller companies after money-market rates surged. Later the soft start of the European markets further pressurized the local markets and aggravated their fall.

Back home, the markets made a green start tailing the overnight gains in the US markets, reacting positively to the weak nonfarm payroll data that raised hopes of delayed stimulus tapering by the Fed, however the bourses lost their traction in the very first hour of trade with traders opting to book profit after the recent rallies. The rupee that had made a strong start taking cues from the other emerging market currencies, too pared gains, though the IT sector which came under pressure due to rupee appreciation found difficult to recover. The banking sector specially the PSU banks were the star performers after the Finance Ministry finalized the bank-wise capital infusion plan aggregating Rs 14,000 crore by March next year.  Apart from the state owned banks, the whole PSU sector kept buzzing led by Gail India on report that the oil ministry has decided to exempt the company from having to compensate state fuel retailers for selling diesel, kerosene and cooking gas below market rates, as Gail does not make windfall profits when international crude oil and gas prices soar. Sugar stocks that have been surging since last two sessions continued their surge with some of the major producers adding considerable gains. On the other hand there was some cautiousness in cement stocks ahead of two major result announcements of ACC and Ambuja Cements, while Realty, power and IT were the prominent losers for the day.

Finally, the BSE Sensex lost 97.09 points or 0.47%, to settle at 20767.88, while the CNX Nifty declined by 24.45 points or 0.39% to settle at 6,178.35.

The BSE Sensex touched a high and a low of 20922.32 and 20589.72, respectively. The BSE Mid cap index declined by 0.03% and Small cap index was down by 0.26%.

The top gainers on the Sensex were Gail India up 3.89%, Cipla up 2.74%, SBI up 2.35%, L&T up 1.35% and ICICI Bank up 1.30%, on the flip side Wipro down 4.41%, Sun Pharma down 2.39%, NTPC down 2.02%, BHEL down 1.93%, and Bajaj Auto down 1.72%, were the top losers on the index. 

On the BSE Sectoral front, Capital Goods up by 0.58%, Bankex up by 0.56%, Consumer Durables up by 0.41%, and FMCG up by 0.14%, were the only gainers, while Realty down by 1.46%, Power down by 1.28%, IT down by 0.93%, Teck down by 0.88%, and Oil & Gas down by 0.87%, were top losers on the sectoral front.

Meanwhile, the inter-ministerial group (IMG) on coal blocks which is scheduled to meet this week is likely to review the status of mine awarded to Mahanadi Coalfields, Neyveli Lignite Corp and Hindalco Industries. There are more than 40 coal blocks, including the Talabira II situated in Jasukuda district of Odisha awarded to Hindalco and others, which recently came in lime light with CBI filing a case for alleged conspiracy to award the block.

The government had formed the IMG last year to review the progress of coal blocks allocated to firms for captive use and recommend action, including de-allocation. The panel under the chairmanship of the additional secretary in the coal ministry also has members from the steel and power ministries.

The review panel does not scrutinise the allocation procedure. Rather, it watches whether the block owners are exploring the mine according to the set milestones. If a company is found delaying developing a block, it will first be issued a show-cause notice seeking explanation and if the explanation is found invalid, it will recommend to the Coal Minister to deduct the bank guarantee of the company or de-allocate the block. Most of the blocks under review figure in the CBI's Coalgate probe and on October 24 and 25, the panel will take a call on all the 30 coal blocks which were issued show cause notices a couple of months back.

The CNX Nifty touched a high and low of 6,217.95 and 6,116.60 respectively.

The top gainers on the Nifty were Bank of Baroda up by 5.21%, GAIL (India) up by 3.92%, Cipla up by 2.73%, State Bank of India up by 2.45% and ACC up by 2.09%. On the other hand, Wipro down by 4.60%, Cairn India down by 3.80%, DLF down by 3.14%, Sun Pharmaceuticals Industries down by 2.99%, and NTPC down by 2.25%, were the top losers.

The European markets were trading in red, France’s CAC 40 was down by 0.94%, Germany’s DAX was down by 0.44%, and United Kingdom’s FTSE 100 was down by 0.48%.

The Asian markets barring Jakarta Composite and KLSE Composite concluded Wednesday’s trade in red after US jobs data came in well below expectations. The worse-than-expected jobs reading overnight reinforces the idea that stimulus will remain unchanged until next year. Investment in Indonesia continued to grow during the third quarter of this year, despite concerns that much of the shine had been taken off the country’s economy in recent months. The finance ministry raised Rp 12 trillion ($1.1 billion) from the sale of bonds and bills of various tenors as the country needs funds to plug its widening budget deficit.

China’s biggest banks tripled the amount of bad loans written off in the first half cleaning up their books ahead of what may be a fresh wave of defaults. China signaled concern yesterday that ample credit could fuel inflation as a report showed house prices jumped the most in nearly three years, with double-digit gains in major cities.