Post Session: Quick Review

Indian markets showed a choppy trade on Wednesday and major benchmarks after showing rounds of trepidation ended flat. Though, the start was in green bucking the sluggish regional trend but major indices kept moving in and out of the green throughout the session, lacking any firm cue to move in either direction. All the high fliers gave up some of their last session gains and markets made a flat closing, just managing to hold the green mark.

The global cue remained mixed, while the US markets extended their gains overnight on getting good economic data, the Asian markets ended mostly in red as investors remained concerned about the company earnings and awaited the Federal Reserve’s policy statement. At the end of two days FOMC meeting Janet Yellen will come up with her inaugural policy review as the Federal Reserve’s Chief.

Back home, the markets remained in consolidation mood and every attempt of moving upward was met with equal resistance especially from selling in IT and tech stocks, which remained in somber mood since beginning after IT bellwether Tata Consultancy Services signaled a weaker Q4 based on potential impact from seasonally slower demand in its biggest markets and continued demand volatility at home that the company flagged back in November. TCS’ CFO Rajesh Gopinathan in an analyst meet indicated that EBIT margins of the company could fall by 40-50 bps quarter-on-quarter and apart from softness in overseas revenues, the Lok Sabha polls would impact domestic revenue. However, he reiterated that margins over the long-term would remain stable. The markets made some upmove during mid of the trade after Standard & Poor's Ratings Services said that Indian companies are improving their credit profile by selling equity and assets, or using free operating cash flows to reduce debt. S&P also said that infrastructure companies with high leverage are also considering selling assets or stakes in subsidiaries to cut down on their debt levels. PSU oil marketing companies remained unenthusiastic despite the report that loss on sale of diesel reduced by more than Rs 1 to Rs 7.16 per litre due to softening of international crude oil price and all of them ended lower with IOC suffering the most, down by over three percent. On the other hand Metal sector stocks maintained their firm undertone for yet another day as institutional investors have started showing interest in the sector after its severe fall in the beginning of the year. 

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1,466: 1,334, while 152 scrips remained unchanged. (Provisional)

The BSE Sensex gained 2.08 points or 0.01% to settle at 21,834.69. The index touched a high and a low of 21,895.83 and 21,782.01 respectively. Among the 30-share Sensex, 19 stocks gained, while 11 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.29% and 0.39% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 2.05%, FMCG up by 1.26%, Bankex up by 0.64%, Healthcare up by 0.45% and Capital Goods up by 0.42% were the top gainers, while IT down by 2.30%, Teck down by 1.69%, PSU down by 1.16%, Oil & Gas down by 0.59% and Realty down by 0.47% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.48%, Hindalco up by 4.27%, SSLT up by 2.35%, HDFC up by 1.91% and Axis Bank up by 1.51%, while, TCS down by 3.94%, ONGC down by 3.00%, Coal India down by 2.74%, Mahindra & Mahindra down by 2.66% and Infosys down by 2.39% were the top losers in the index. (Provisional)

Meanwhile, concerned over the increasing legal expenses as many of its orders getting challenged in tribunal and courts, the Securities and Exchange Board of India (SEBI) will soon consider a proposal to recover legal expenses incurred in such litigations from penalties imposed by it on defaulters before crediting the amount to the government's coffers. Over the past three financial years, capital markets regulator has incurred average litigation expenditure in the range of Rs 4-5 crore per annum, however, such expenses are expected to be much higher in the current fiscal year.

Further, SEBI may also consider charging 'processing fees' for various service requests from market intermediaries, companies and stock exchanges as most of the services are being provided free by SEBI in spite of bearing significant cost of such matters. However, fees are not proposed on investor complaints, in accordance with the processing time, cost and procedures involved. 

The proposal, which is based on recommendations made by a Committee on Rationalisation of Financial Resources (CRFR) is likely to be considered by SEBI board later this week. The proposal has been made to enhance SEBI's financial resources to help it meet expenses for its various regulatory and investor-centric activities.

India VIX, a gauge for markets short term expectation volatility lost 1.43% at 16.88 from its previous close of 17.12 on Tuesday. (Provisional)

The CNX Nifty gained 7.40 points or 0.11% to settle at 6,524.05. The index touched high and low of 6,541.20 and 6,506.00 respectively. Out of the 50 stocks on the Nifty, 33 ended in the green, while 17 ended in the red.

The major gainers of the Nifty were Tata Steel up 4.61%, Hindalco up by 4.31%, Ambuja Cements up by 3.26%, PNB up by 2.38% and Asian Paint up by 2.27%. The key losers were TCS down by 3.97%, ONGC down by 3.29%, M&M down by 2.92%, Coal India down by 2.86% and Tata Power down by 2.52%. (Provisional)

Most of the European markets were trading in red; France’s CAC 40 was down 0.23% and UK’s FTSE 100 down 0.18%, while Germany’s DAX was up by 0.29%.

The Asian markets concluded Wednesday’s trade mostly in red as investors turned attention to the US Federal Reserve’s policy meeting later in the day. The World Bank backed its growth target for Indonesia in 2014, but warns the country against possible headwinds from slowing investment. The organization had maintained its economic growth target for Indonesia at 5.3% this year, supported by private consumption and improving exports. Bank Indonesia, the central bank, is estimating a range of 5.5% to 5.9%, from 5.8% last year. In another sign of investor confidence in Indonesia’s bond market, the government managed to raise Rp 10 trillion ($895.8 million) from the sale of treasury bonds and bills. Japan’s All Industries Activity Index rose to a seasonally adjusted 1.0%, from -0.1% in the preceding month while Japan’s trade balance rose to a seasonally adjusted -1.13T, from -1.76T in the preceding month whose figure was revised up from -1.82T.

Shanghai’s economic growth slowed at the start of this year, with industrial production, fixed asset investment and trade all moderating. The industrial production rose 3.8% from a year earlier to reach 502 billion yuan ($81.6 billion) in the first two months. The number of Chinese cities seeing month-on-month price growth declined for another month in February amid continuous easing sentiment among buyers. Excluding government-subsidized affordable housing, prices of new residential properties rose in 57 cities around the country last month.