Benchmarks ends the session with marginal losses

Extending their southward journey for third straight session, Indian equity benchmarks ended the lethargic day of trade slightly in the red on Friday. Domestic bourses traded in very tight range throughout the session as investors remained on sidelines ahead of third quarter corporate earnings, beginning on January 10, 2013 with IT major Infosys and private sector bank IndusInd Bank announcing their numbers. Sentiments remained dampened since morning on report that the government is mulling hiking the quota of subsidized LPG cylinders to 12 per household in a year from the current limit of 9, a move which on implementation would definitely increase the subsidy burden. Frontline gauges lost some more ground after Prime Minister Manmohan Singh disappointed street in his press conference as there was lack of announcement of any future trajectory to boost Indian economy.

The domestic bourses witnessed some recovery in last leg of trade supported by firm opening in European markets with CAC, DAX and FTSE all trading higher in early deals. However, disappointing cues from Asian markets took their toll on Indian markets and stopped them to enter green terrain. All the Asian equity indices ended the session in the red as sentiments remained dampened after Growth in China’s services sector fell to a four-month low in December.

Back home, sentiments also remained dampened after Indian rupee depreciated to two-week low of 62.47 per dollar at the time of equity markets closing versus previous close of 62.26 per dollar. Power stocks slipped after CCEA approved the proposal to amend the policy on mega power projects. As per the proposal, power generating firms can take benefit from this policy only after fulfilling certain mandatory conditions as the developer must tie up at least 65 percent of the installed capacity through competitive bidding and remaining 35 percent of the installed capacity should be through the regulated tariff.

Meanwhile, metal and mining stocks edged lower for the second day in a row after a gauge of China’s non-manufacturing industries declined. Additionally, auto stocks slide on weak December sales. Bajaj Auto registered a 13% drop in total sales to 2,97,776 units in December 2013 against 3,43,946 units in December 2012. Hero MotoCorp declined after the company reported fall of 3.07% in December sales at 5,24,990 units as compared to 5,41,615 units sold in the corresponding month last year.

The NSE’s 50-share broadly followed index Nifty slipped by just ten points and managed to end above its psychological 6,200 level, while Bombay Stock Exchange’s sensitive Index -- Sensex dropped by over thirty points to end below the psychological 20,900 mark.

Broader markets, however outperformed benchmarks and ended the session with gain of over half a percent. Moreover, the market breadth remained in favour of advances, as there were 1,274 shares on the gaining side against 1182 shares on the losing side, while 168 shares remained unchanged.

Finally, the BSE Sensex declined by 37.00 points or 0.18%, to settle at 20851.33, while the CNX Nifty lost 10.00 points or 0.16% to settle at 6,211.15.

The BSE Sensex touched a high and a low of 20885.18 and 20731.33, respectively. The BSE Mid cap index was up by 0.63%, while the Small cap index gained 0.60%.

The top gainers on the Sensex were TCS up 2.76%, Infosys up 2.61%, Maruti Suzuki up 1.65%, Sun Pharma up 1.05%, and HDFC Bank up 0.99%, on the flip side Mahindra & Mahindra down 3.85%, Tata Power down 3.83%, Tata Motors down 2.49%, L&T down 2.33%, and NTPC down by 2.22%,were the top losers on the index.

On the BSE Sectoral front IT up by 2.19%, Teck up by 1.97%, Realty up by 0.86%, Healthcare up by 0.70%, and Consumer Durables up by 0.49%, were the top gainers, while Power down by 1.74%, Capital Goods down by 1.71%, Oil & Gas down by 1.27%, Metal down by 1.20%, and PSU down by 1.20%, were the top losers on the sectoral front.

Meanwhile, allaying concerns over the country’s fiscal deficit touching around 94 percent of the budgeted target in the first eight months of the current fiscal, Finance Minister P Chidambaram expressed confidence that country’s fiscal deficit would remain within the target of 4.8 percent of GDP in the current financial year. Chidambaram emphasized that government finances will improve in December on the back of advance tax receipts and the General Financial Rules, which restrict expenditure and would have a positive bearing on the fiscal deficit.

The recently released fiscal deficit data has raised concerns that India may well overshoot its ambitious fiscal deficit target. In the same period of previous fiscal, the country’s fiscal deficit was 80.4% of the budgeted target and the finance ministry was able to contain the deficit at 4.9% of GDP in the last fiscal year. However, containing fiscal deficit has now become a tough task for the government amid poor revenue realization and tardy progress of the disinvestment programme. The government has so far only managed to raise Rs 3,000 crore against the disinvestment target of Rs 40,000 crore. During the April-November period of FY14 gross direct tax collections rose 13.18% to Rs 3.68 lakh crore while indirect tax collections witnessed lower growth at 4.9% at Rs 3.07 lakh crore compared with Rs 2.93 lakh crore in the year earlier.

Meanwhile, it is expected that the government would go in for a massive cut of about Rs 1 lakh crore in planned expenditure to contain the fiscal deficit. The government has already taken a number of measures including banning government departments for holding meetings in 5-star hotels among others to cut government spending in non-critical areas.

The CNX Nifty touched a high and low of 6,221.70 and 6,171.25 respectively.

The top gainers on the Nifty were Ranbaxy Laboratories up by 4.02%, Lupin up by 3.20%, TCS up by 2.63%, Infosys up by 2.32%, and Maruti Suzuki India up by 2.18%, On the other hand, Tata Power Company down by 3.95%, Mahindra & Mahindra down by 3.73%, BPCL down by 2.71%, Tata Motors down by 2.51%, and BHEL down by 2.30%, were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.57%, Germany's DAX was up by 0.13%, and United Kingdom's FTSE 100 was up by 0.09%.

The Asian markets concluded Friday’s trade in red, following a negative lead from the US, while Hong Kong led the region lower as data pointed to a slowing expansion in China’s service sector. Thailand’s markets were also in focus as the country lurched further towards a political crisis. Japan’s Stock Exchange was closed for the day. China’s official nonmanufacturing Purchasing Managers' Index fell to 54.6 in December from 56.0 in November. The nonmanufacturing PMI covers services including retail, aviation and software as well as the real-estate and construction sectors. The report came just a day after regional sentiment took a hit from two separate reports which pointed to a deceleration in China’s manufacturing sector, raising concerns that Asia’s largest economy might be losing momentum.

Singaporean GDP fell to a seasonally adjusted 4.4%, from 5.8% in the preceding quarter. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of 8.5%, from 6.3% in the preceding month. Thailand’s CPI fell to a seasonally adjusted annual rate of 1.67%, from 1.92% in the preceding month. Indonesian Inflation rose to a seasonally adjusted 8.38%, from 8.37% in the preceding month.