Post Session: Quick Review

It again turned out to be dismal session of trade at D-Street, whereby benchmark equity indices, squandering a positive start languishing entire day in the red terrain and ended with loss of close to half a percent. Although, benchmarks did made some efforts to break-out in green in the last leg of trade, but they turned out to be half-hearted ones and market drifted further near day’s low point by the close of trade. Caution ahead of macro-economic data and more importantly the earning season, which commences later in the week, kept investors on the sidelines amidst mixed global cues. Overall, it turned out to be fifth consecutive session of downturn for both, Sensex and Nifty, which settled below the crucial 20,700 and 6,200 levels respectively. Meanwhile, broader indices in-line with global peers showed diverse performance.

On the global front, Asian markets were mixed on Tuesday, with bargain-hunting lifting some bourses but Tokyo dropped again following heavy losses in the previous session due to a stronger yen. The mood remained largely cautious ahead of weak US economic data and week's key risk events.  The US Institute for Supply Management's non-manufacturing index came in at 53 in December, its lowest level in five months and below estimates for a 54.6 figure. However, European shares continued to trade in green, with investors now looking ahead to Wednesday's release of minutes from the Fed's recent policy meeting, policy decisions from the European Central Bank and Bank of England on Thursday, and finally, Friday's closely-watched December US non-farm payrolls report.

Closer home, amidst across the board selling pressure, only stocks from Consumer Durables, Capital Goods and Healthcare staged resilience. On the flip side, Metal, Realty and Oil & Gas counters were the worst hit of the session. Splendid gains of BHEL, which featured in the list of top three gainers of the session, lifted the entire Capital Goods pivotal up. Meanwhile, Maruti Suzuki’s stocks record high level in intra-day trade curtailed losses of Auto sector, which almost ended flat with negative bias. Further, Telecom stocks, viz Bharti Airtel and Idea Cellular rang loud in trade ahead of outcome of Telecom Commission’s ongoing meeting on uniform spectrum usage. Additionally, Aviation stocks, SpiceJet, Jet Airways, were in demand on renewed buying. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1274: 1262, while 143 scrips remained unchanged. (Provisional)

The BSE Sensex lost 96.86 points or 0.47% to settle at 20690.44. The index touched a high and a low of 20890.48 and 20637.18 respectively. Among the 30-share Sensex, 11 stocks gained, while 19 stocks declined. (Provisional)

The BSE Mid cap index ended lower by 0.51% and Small cap index ended higher by 0.28%. (Provisional)

On the BSE Sectoral front, Capital Goods up by 0.41%, Auto up by 0.10%, Consumer Durables up by 0.08% and Healthcare up by 0.07% were the top gainers, while Realty down by 1.85%, Metal down by 1.77%, Oil & Gas down by 1.50%, Power down by 1.42% and PSU down by 1.37% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.21%, Mahindra & Mahindra up by 1.26%, ICICI Bank up by 1.13%, Gail India up by 1.09% and Sun Pharma up by 0.99%, while, Tata Steel down by 3.64%, Tata Power down by 2.69%, SSLT down by 2.19%, SBI down by 1.99% and ONGC down by 1.97% were the top losers in the index. (Provisional)

Meanwhile, with an aim to cut India's dependence on imports for meeting its energy needs, India will offer at least 56 oil and gas blocks under the 10th round of NELP auction under completely revamped terms. Tenth round of NELP auction will be the second highest offering of blocks since the advent of NELP in 1997, a common platform for public and private sector companies to bid for the blocks.

As per the government, 10th round of auction is likely to be held on new terms wherein a bidder shall be asked to quote the amount of oil or gas output it is willing to offer to the government from the first day of production. The company offering the highest share of oil or gas produced from the field would get the block. Presently, oil companies are allowed to share the profit with the government only after recovering the entire cost of exploration and production. Meanwhile, many Indian authorities like CAG had criticised this approach on grounds that it encourages companies to increase the capital expenditure and delay the government’s share.

Oil Secretary Vivek Rae has asserted that Oil Ministry also proposed to move to revenue-sharing model from the current production-sharing scheme where there will be no profit petroleum, no cost recovery, no investment multiple. Further, ministry also demanded for production-linked payment regime for NELP-X, which is considered more transparent, requiring less intervention in routine exploration and development activities. Meanwhile, new terms for auction are opposed by some oil and gas players citing that riskier deepwater exploration would be best suited if the government gives guarantee that all sunk costs will be first recovered from any oil or gas produced.

Meanwhile, oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil and gas needs. India currently imports around 80 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometres, comprising 26 sedimentary basins.

India VIX, a gauge for markets short term expectation of volatility gained 1.09% at 16.32 from its previous close of 16.50 on Monday. (Provisional)

The CNX Nifty lost 30.10 points or 0.49% to settle at 6,161.35. The index touched high and low of 6,221.50 and 6,144.75 respectively. Out of the 50 stocks on the Nifty, 15 ended in the green, while 34 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Maruti Suzuki up 2.24%, IndusInd Bank up by 1.42%, M&M up by 1.30%, Sun Pharmaceuticals up by 1.08% and ICICI Bank up by 0.95%. The key losers were Tata Steel down by 3.75%, Bank of Baroda down by 3.27%, Tata Power down by 2.69%, SSLT down by 2.56% and UltraTech Cement down by 2.22%. (Provisional)

The European markets were trading in green; France’s CAC 40 was up 0.28%, Germany’s DAX was up 0.31% and UK’s FTSE 100 was up 0.33%.

The Asian markets concluded Tuesday’s trade on a mixed note, as the region recovered from a bruising start to the year, though yen strength continued to weigh on Japanese shares. China’s dismal start of the year comes amid disappointing economic data relating to activity in both manufacturing and services, compounded by the resumption of domestic initial public offerings. More economic data are on the way from China, with trade numbers due on Wednesday and inflation figures on Thursday. New home purchases in Shanghai fell for the second week but the average price continued to rise amid robust sales in the mid- to high-end sector. Sales of new homes, excluding government-subsidized affordable housing, shed 7.5 percent last week to 222,500 square meters.

Indonesia’s rupiah fell to the lowest level since 2008 on concern a foreign-currency shortage in local markets will worsen as the Federal Reserve cuts stimulus. Indonesia posted a narrower budget deficit last year as the government spent less than targeted, giving a break on Southeast Asia’s largest economy amid declining exports and slowing investment. The nation recorded for 2013 a budget deficit of Rp 209.5 trillion ($17 billion), or 2.2 percent of gross domestic product, compared to 2.4 percent of GDP as targeted in last year’s revised state budget. Taiwanese CPI fell to a seasonally adjusted annual rate of 0.33%, from 0.67% in the preceding quarter while the country’s Trade Balance fell to a seasonally adjusted annual rate of 1.41B, from 3.51B in the preceding month.