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Benchmark indices closed lower for the second straigth session dragged primarily by the losses in FMCG, information technology, select financials and auto stocks as traders offloaded positions in view of of the expiry of April series of derivatives contracts.
Provisionally, the 30-share Sensex ended 147 points lower at 27,078 and the 50-share Nifty was down 33 points at 8,207.
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(updated at 2:30PM)
Benchmark indices remain under pressure even after trimming some of the losses on sustained weakness in FMCG, information technology and select auto and financials as investors have remained risk-averse in view of the expiry of April series of derivatives contracts.
Worries over government's combative stance on capital gains tax, delay in passage of key reform-centric legislative proposals, weak Q4 corporate earnings and gloomy monsoon forecast which is likely to further dent rural demand have kept the risk-appetite under check.
At 2:32PM, the 30-share Sensex was down 128 points at 27,098 and the 50-share Nifty was down 33 points at 8,206.
The issue of capital gains tax took a new turn when five foreign portfolio investors (FPIs) filed a writ petition against income-tax department’s minimum alternate tax (MAT) demand in Bombay High Court today. The matter will now be heard on May 6.
Continued selling by foreign institutional investors (FIIs) amid tax concerns has cost India the most favoured emerging market (EM) tag in April. Foreign flows into Indian stocks so far this month are $1.8 billion, much lower as compared to peers South Korea ($3.9 bn), Taiwan ($3.4 bn) and Brazil ($2.3 bn), show data from Bloomberg.
The markets are shut on Friday on account of Maharashtra Day.
In the broader market, both the BSE Midcap index trading flat and Smallcap index, down 0.3% have performed better than the front-liners. Market breadth in BSE is negative with 1,385 declines against 1,159 advances.
Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 718.31 crore on Wednesday, as per provisional stock exchange data.
Buzzing Stocks
Except two all the 12 sectoral indices of BSE are trading lower. BSE FMCG and IT indices down 1.2% and 0.8% each are the top losers followed by BSE Auto and Capital Goods indices, down 0.7% and 0.6% each. BSE Consumer Durables index up 0.5% is the top gainer.
Axis Bank is among the biggest gainers in today’s session and is up 3.5%. Axis Bank has extended its previous day's gains after the bank’s net profit grew 18% to Rs 2,181 crore on the back of a 20% in net interest income and 21% increase in other income.
RIL has gained over 1% and ONGC is up 0.4% on government’s decision to ease the norms of gas field development as this move is likely to benefit the oil and gas exploration companies.
Among pharma stocks, Cipla has gained 0.8%, Sun Pharma is trading flat and Dr Reddys Lab is down nearly 2%. In its clarification to BSE, Sun Pharma has neither substantiated nor confirmed the media reports which said that the pharma major is considering spending upto seven billion dollars on mergers and acquisitions.
Housing finance major, HDFC has lost over 2% extending losses since yesterday after it posted marginal 8% growth in standalone net profit for the March quarter at Rs 1,862 crore. HDFC Bank is down 0.8% and ICICI Bank is down 0.4%.
SBI has lost 0.8%. SBI has signed an MoU with National Insurance Company to roll out accidental death and disability cover for savings bank holders covered under the Pradhan Mantri Suraksha Bima Yojana.
FMCG majors, ITC and HUL have shed around 2% too while the selling-pressure on IT stocks has grown in strength after US economy grew at a surprisingly low rate of 0.2% in the first quarter. The US is the major market for frontline IT companies.
BHEL has successfully commissioned the first 500 MW unit at the 2x500 MW Chandrapur Super thermal Power Project of Maharashtra State Power Generation Company Limiied in Maharashtra. The stock is down nearly 1%.
Bharti Airtel has shed 2.2% after the consolidated net profit fell 12.6% to Rs 1255.3 crore in the March quarter compared with Rs 1436.5 crore in the December quarter.
Auto stocks like Tata Motors, falling for second straight day and M&M have shed 1.6% each. Media reports have cited CEO of Italy's Pininfarina saying that the car design company is yet to reach an accord with M&M over a possible sale.
Global Markets
Globally, equity markets have come under pressure after the first-quarter growth data in US came below expectations adding to the persisting nervousness about global economic growth. Risk aversion was already building up on the signs of a definite slowdown in the Chinese economy and concerns over Greece fate as it continues to fight to avoid bankruptcy.
Japan's Nikkei slumped 2.8%, extending losses after the Bank of Japan kept monetary policy unchanged. The decision had been expected, but disappointed some participants who had bet it may ramp up its already massive stimulus programme.
European markets have opened on a cautious note with FTSE 100 and DAX indices trading higher by 0.2% and CAC 40 index trading flat.
