Post Session: Quick Review

Tuesday was a day of consolidation for the Indian Equity markets after they showed a strong rally in last session. Though, there was not much damage done but the traders preferred to take a breather on the back of some domestic developments. In a move that could discourage some foreign investments and lower the faith in Indian governance, the Election Commission (EC) directed the government to defer notification of the order on gas price hike till the end of the general election in the third week of May. However, Petroleum Minister M. Veerappa Moily had been arguing that the proposal was discussed twice by the Union Cabinet, and approved much before the announcement of the general election schedule.

The global cues too remained largely somber as the US markets ended lower overnight after flash Manufacturing PMI for the US fell to 55.5 in March from 57.1 in February. Most of the Asian markets too ended lower tracking the weakness in the US markets, however bucking the trend Chinese market ended marginally in green amid speculation that Chinese government is accelerating reforms to support growth. The European markets made a strong start ahead of US Consumer and Housing Data.

Back home, markets traded in a tight range throughout the day after a soft start, there were many attempts of breaking out in green but simultaneous selling restricted any upmove. Traders even ignored the surge in rupee which strengthened to its eight month high on dollar selling by custodian banks. Marketmen mainly remained concerned by the EC’s order of deferment of an increase in gas prices that was to take effect from April 1. The decision impacted the companies such as ONGC, Reliance Industries and Oil India and all of them ended lower by 2-3%. The gas price hike would have boosted exploration and production activity and attracted foreign investments. The decision raised the concern about passing of new banking licenses pending with the EC and weighed on the banking license hopefuls too. Meanwhile, the markets trend remained range bound and both the benchmarks ended flat, however midcap index showed good fervor and outperformed its larger peer. On the BSE, while power, capital goods, consumer durables and realty supported the Sensex by rallying the most, the oil and gas sector saw heavy selling pressure and the rupee strength weighed heavily on the IT and TECK stocks.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1212:1658, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex lost 12.76 points or 0.06% to settle at 22,042.72. The index touched a high and a low of 22,079.96 and 21,916.87 respectively. Among the 30-share Sensex, 16 stocks gained, while 13 stocks declined and one stock remain unchanged. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.52% and 0.13% respectively. (Provisional)

On the BSE Sectoral front, Power up by 1.90%, Capital Goods up by 1.64%, Realty up by 1.28%, Consumer Durables up by 1.27% and PSU up by 0.73%, were the top gainers, while Oil & Gas down by 1.71%, IT down by 0.71%, Teck down by 0.50% and Healthcare down by 0.06% were the top losers in the space. (Provisional)

The top gainers on the Sensex were BHEL up by 4.41%, Hero MotoCorp up by 3.06%, Hindustan Unilever up by 1.85%, L&T up by 1.59% and Maruti Suzuki up by 1.45%, while, RIL down by 3.14%, Wipro down by 2.85%, SSLT down by 1.60%, Axis Bank down by 1.13% and Mahindra & Mahindra down by 0.97% were the top losers in the index. (Provisional)

Meanwhile, amid concerns over the increasing India’s trade deficit with China, India sought more Chinese investments to bridge the ballooning $35 billion trade deficit. Indian Ambassador to China Ashok K Kantha, during the meeting with Chinese officials, has highlighted the potential for expanding and diversifying trade and economic cooperation between these two countries. At present, Chinese investment in India is less than $1 billion.

Kantha asserted that Shanghai-based companies have undertaken a number of projects in India and other Chinese enterprises should also increase their investments in India. While, Shanghai Mayor Yang Xiong has said that relations between Shanghai and India have made steady progress and the Shanghai municipal government remains committed to further strengthen its relations with India.

China-India bilateral trade declined to $66.5 billion last year as Indian trade continued to fall due to various reasons including reduced iron ore exports and high rupee depreciation. Both the countries have set $100 billion target by 2015, which is expected to benefit China more. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. More access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals can help India to reduce the imbalance in trade.

India VIX, a gauge for markets short term expectation volatility gained 3.03% at 17.04 from its previous close of 16.53 on Monday. (Provisional)

The CNX Nifty gained 5.30 points or 0.08% to settle at 6,588.80. The index touched high and low of 6,595.55 and 6,544.85 respectively. Out of the 50 stocks on the Nifty, 30 ended in the green, while 20 ended in the red.

The major gainers of the Nifty were BHEL up 4.23%, DLF up by 3.61%, Hero MotoCorp up by 3.07%, Jindal Steel up by 2.87% and Ranbaxy up by 2.48%.

The key losers were Reliance Industries down by 3.05%, Wipro down by 2.75%, Ambuja Cements down by 1.85%, SSLT down by 1.77% and M&M down by 1.48%. (Provisional)

The European markets were trading in green; France’s CAC 40 was up 1.09%, UK’s FTSE 100 was up 1.14% and Germany’s DAX was up by 1.18%.

The Asian markets concluded Tuesday’s trade mostly in red due to weak US manufacturing survey and worries over Ukraine crisis soured sentiment. New home transactions in Shanghai were little changed from a week ago while their average price fell due to higher sentiment in the mid- to low-end segment. The sales of new homes, excluding government-funded affordable housing, dipped 0.5% to 198,800 square meters last week while their average cost shed 11.4% to 25,097 yuan ($4,048) per square meter.

Hong Kong Trade Balance fell to a seasonally adjusted -53.7B, from -20.0B in the preceding month. Indonesia’s business sector continues to show optimism as regulatory reform and a strengthening rupiah is expected over the next five years. A survey by credit rating agency Fitch Ratings showed a positive and upbeat view on the economy and business environment this year despite elections that traditionally become a cause for caution.