Post Session: Quick Review

Last trading session of the week turned out to be a major disappointment for Indian equity markets, which ended with loss of close to a percent, below the crucial 21,100 (Sensex) and 6,300 (Nifty) levels respectively. ‘Profit-booking was rampant throughout the day’s trading session, which typically is the case ahead of weekend. In the lackluster session of trade, benchmarks after getting a subdued start kept on losing ground and ended near day’s lowest point. Meanwhile, weakness witnessed was broad-based in nature as broader indices ended with hefty losses of over percent and half in the backdrop of negative regional counterparts. Concerns over the earnings of blue chip stocks, namely ITC and Tata Consultancy Service (TCS) mainly weighed on the sentiment. Additionally, caution ahead of earnings of index heavyweight, Reliance Industries (RIL), after market hours, also contributed to the downside of bourses. Nevertheless, sentiment remained downbeat right from the start of the trade after global rating agency, Moody’s underscored that India's economic recovery is likely to be slow in the second half of 2014.

Meanwhile, on the global front, Asian pacific shares ended in sea of red on Friday, following a negative lead from Wall Street after a disappointing set of corporate results and soft economic data. On the flip side, European equities were higher in early trade, receiving a boost from the FTSE 100 after better-than-expected retail sales data in the U.K. offset a profit warning from oil giant Royal Dutch Shell.

Closer home, amidst across the board selling pressure, stocks from Oil & Gas, Auto and Information Technology counters outperformed. On the flip side, Realty, IT and Banking counters were the worst performers of the session. TCS’ shares, which plunged over 5% to record its worst percentage loss since October 17, dragged the entire pivotal lower after IT major’s December quarter profit when adjusted for other income, as well as operating margin, were seen lagging expectations. Additionally, ITC ‘s stocks too slipped over quarter of a percent after Tobacco major’s operational performance fell short of expectation. Company’s Earnings before interest, tax, depreciation and amortization (EBITDA) jumped 14.7% to Rs 3,181 crore and margin expanded 50 basis points to 36.9 percent in the December ended quarter.

Besides, banking shares also plummeted after the industry body Assocham underscored that the growth of Indian banking industry is likely to remain under pressure with gross non-performing assets (NPAs) expected to touch 5 percent of total loans by March this year. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 895: 1732, while 155 scrips remained unchanged. (Provisional)

The BSE Sensex lost 187.51 points or 0.88% to settle at 21077.67. The index touched a high and a low of 21270.11 and 21015.61 respectively. Among the 30-share Sensex, 12 stocks gained, while 18 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 1.25% and 1.55% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 0.19% and FMCG up by 0.10% were the top gainers, while Realty down by 2.40%, IT down by 2.30%, Teck down by 2.12%, Bankex down by 1.45% and Consumer Durables down by 0.97% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Cipla up by 1.84%, Hindustan Unilever up by 1.31%,  Bajaj Auto up by 1.26%, BHEL up by 1.03% and Dr Reddys Lab up by 0.63%, while, TCS down by 5.59%,  Wipro down by 2.65%, HDFC down by 2.58%, ICICI Bank down by 2.40% and Axis Bank down by 2.37% were the top losers in the index. (Provisional)

Meanwhile, concerned over acute liquidity crunch faced by the Indian fertiliser sector, The Fertiliser Ministry has sought an additional subsidy of Rs 20,000 crore. Non-allocation of subsidy fund to fertilizer industry on time has left it with no money to pay subsidy bills for the third and fourth quarters in the current financial year.

So far this fiscal, the government has allocated Rs 70,586 crore funds to Department of Fertiliser (DoF) as against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Commodity wise, a subsidy of Rs 41,158.85 crore was allocated for urea and Rs 29,426.88 crore for P&K fertilisers. The DoF has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally, while for non-urea fertilizers, it can pay subsidy only till this month.

Meanwhile, in order to help fertiliser companies tide over the cash crunch, The Finance Ministry has approved a special banking arrangement of Rs 9,000 crore. Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF).

Backlog of Rs 32,000 crore for the year 2012-13 has to be paid from this year's allocations. The government has agreed to bear interest of 8 per cent per annum with 2.7 per cent interest to be borne by the industry. For this repayment, Finance Ministry provided a cash outgo of Rs 2,000 crore as additional subsidy in the second supplementary demand for grants approved in December.   India VIX, a gauge for markets short term expectation of marginally lost 0.90% at 15.41 from its previous close of 15.54 on Thursday. (Provisional)

The CNX Nifty lost 49.45 points or 0.78% to settle at 6,269.45. The index touched high and low of 6,327.10 and 6,246.35 respectively. Out of the 50 stocks on the Nifty, 18 ended in the green, while 31 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were BPCL up 2.89%, Cipla up by 1.68%, Bajaj-Auto up by 1.29%, Hindustan Unilever up by 1.28% and M&M up by 1.05%. The key losers were TCS down by 5.57%, DLF down by 4.19%, PNB down by 3.22%, Wipro down by 2.65% and Axis Bank down by 2.60%. (Provisional)

The European markets were trading in red; France’s CAC 40 was up 0.44% and Germany’s DAX was up 0.33%, while UK’s FTSE 100 was down 0.01%.

The Asian markets, barring Hang Seng and Straits Times concluded Friday’s trade in red following a negative lead from Wall Street on disappointing set of corporate results and soft economic data. The Malaysian market remained shut for the trade today in observance of Thaipusam.  Japan and China accumulated record amounts of US Treasurys in November, a sign that demand for the US debt among those economic giants remains robust even as interest rates rise. China’s foreign direct investment expanded 3.3 percent in December compared with the same month a year earlier, picking up from November’s 2.35 percent and extending growth for the 11th straight month. Foreign investors channeled US$12.08 billion into China last month, bringing actual inbound foreign direct investment to US$117.58 billion for 2013, up 5.25 percent on an annual basis.

The volume of Hong Kong’s goods re-exports increased 3.6% year-on-year for November, while that of domestic exports dropped 10.4%. Taken together, the volume of total goods exports increased 3.4%, while the volume of goods imports rose 4.8%. Goods re-exports’ prices rose 2.7% year-on-year, whereas those of domestic exports dipped 0.1%. Taken together, total goods exports’ prices increased 2.6%. Concurrently, goods imports prices rose 1.7%. Japanese Household Confidence remained unchanged at a seasonally adjusted annual rate of 0.0, from 42.5 in the preceding month.