It turned to be yet another tumultuous day of trade for the Indian stock markets which got thrashed for the sixth straight session to end with a cut of around three fourth of a percent, way below all crucial technical levels. Investors were trapped amid an assortment of cues, apart from the usual corporate earnings announcements, reports of Osama Bin Laden's assassination in Pakistan, followed by auto sales and cement dispatches figures while reports from the economic front too emerged. However, nothing proved decisive enough to turn the market sentiment around, which reeled under the fear that RBI will now be forced to bite the bullet and put the aggressive foot forward in its annual monetary policy review meet on May 3rd and hike key interest rates by 50 basis points. Meanwhile, the economic reports of India's manufacturing growing in April at the fastest pace in five months and reflecting the continued strength in business conditions despite the RBI hiking interest rates eight times since the start of 2010, failed to enthuse the markets. Moreover, the government said in a statement on Monday that India's exports surged to record high growth of 37.6% while imports rose by 22% in the fiscal year 2010/11 and the trade deficit was at $104.8 billion, marginally higher than the provisional forecast of $104.4 billion. On the global front, cues remained sanguine as some of the trading Asian markets closed with smart gains while the European markets too traded on a strong note. The wilt in crude prices also went largely unnoticed as local investors indulged only in stock specific activities. The NSE's 50-share broadly followed index Nifty, drifted around fifty points and shut shop at the crucial 5,700 support level while Bombay Stock Exchange's Sensitive Index, Sensex took another around hundred and fifty points blow to settle below the psychological 19,000 mark. The broader markets too failed miserably by the end of trade as they underperformed benchmarks by quite a margin. The midcap index plunged 0.94% while the smallcap index closed with 1.15% losses. On the sectoral front, the rate sensitive Bankex index got butchered by over 2% points as investors chose to square off positions from major lenders like SBI and ICICI Bank as they shaved off a massive 4.06% and 1.44% respectively. The other counter that took huge cut was the Consumer Durables which slipped by 1.76% after majors like Titan and Bajaj Electricals plummeted by 2.94% and 4.14% respectively. On the other hand there was some respite for the high beta Realty pocket which took the maximum beating in the month of April as it grabbed the top gainer's position and garnered 1.14% after majors like Unitech and DLF soared by 3.11% and 1.66% respectively. Cement stocks like ACC and Shiva cements slipped despite reporting growth in monthly dispatches numbers while Auto bellwethers like Maruti Suzuki, Bajaj Auto, TVS Motor Company, Tata Motors, too kept buzzing on the back of their monthly sales numbers. On the result front, stocks like Sintex Industries, Godrej Consumer, Alok Industries, IOB, Indiabulls Real Estate were commended by the investors in the session while shares of companies like SAIL, IDFC, Allahabad Bank, Marico, Century textiles, Amtek Auto got punished badly. Among individual draggers, RIL and ONGC slipped by 1.76% and 1.47%. PSU oil marketing companies like HPCL, BPCL and IOC surged by around a percent each after reports that the companies will hike prices this month after the conclusion of state elections.
On the global front, all Asian equity indices which were open for trade today traded with conviction and settled with smart gains. The South Korean benchmark grabbed top gainer's position after surging over one and half a percent. However, most markets in the region remained closed today on account of May Day and Labor Day holidays. The European equities too are mirroring the trend followed by Asian markets as France's CAC was advanced 0.27% and Germany's DAX surging 0.90%. On the other hand, the screen trading for US index futures too indicated that the Dow could open on a positive note on Monday.
Earlier on Dalal Street, the benchmark got off to an optimistic opening as leads from the Asian markets remained supportive since investors showed renewed fervor after reports that Al Qaeda's elusive leader Osama bin Laden is dead and his body was recovered by US authorities. But the frontline indices failed to keep their head above the water and slipped in the negative terrain in no time. Thereafter, the bourses showed some signs of recovery in the late morning session amid a slew of economic leads but failed to gain any kind of momentum and dived yet again and this time deeper into the red territory. The southbound journey concluded only with the close of trading session and with losses of around three fourth of a percent around the psychological 5,700 and 19,000 levels. Markets registered lower volumes of over Rs 1.16 lakh crore. The turnover for NSE F&O segment remained on the lower side compared to Friday day at over 1 lakh crore. Market breadth remained abysmal as there were 1032 shares on the gaining side against 1810 shares on the losing side while 106 shares remained unchanged.
Finally, the BSE Sensex plunged by 137.94 points or 0.72% to settle at 18,998.02 while the S&P CNX Nifty lost 48.20 points or 0.84% to end at 5,701.30.
The BSE Sensex touched a high and a low of 19,253.87 and 18,954.76 respectively. The BSE Mid-cap and Small-cap index declined by 0.94% and 1.15% respectively.
Tata Power up 2.43%, Cipla up 1.96%, DLF up 1.66%, Bharti Airtel up 1.36% and Infosys up 0.60% were the major gainers on the Sensex.
On the flip side, SBI down 4.06%, Sterlite Industries down 2.26%, Maruti Suzuki down 2.16%, Bajaj Auto down 2.09% and RIL down 1.76% were the major losers on the index.
The textile ministry is all set to take up the issue of excise duty on branded garments with the finance ministry at an official level. The finance ministry had earlier slapped a 10% excise duty on branded garments and there has been a massive protest against the move in textile players, particularly in wake of already surging cost of production.
Finance Minister Pranab Mukherjee had proposed in the FY-12 General Budget that a 10% excise duty be applicable on branded apparels. This was applicable with a 45% abatement that would have meant an effective tax of 10% on 55% of the MRP. Following the opposition from the industry, finance ministry Pranab Mukherjee while replying to the debate on finance bill increased the rate of abatement from 40% to 55%, this brought down the effective rate of duty to 4.5% of MRP.
The industry however continues to protest given the difficult operating atmosphere in which textile players are currently operating. The industry is facing a lot of cost escalation as cotton prices have increased significantly in last 3-4 quarters and continue to remain close to the higher range seen in recent months. Other costs including labour and energy costs too have increased significantly. This has been putting pressures on textile companies' margins.
The industry contends that at a time when cost of production is already surging, the additional duty has further added to its woes. Although the textile sector has seen a good recovery over last one year or so, margins remain thin owing to overall rise in costs. Besides, the industry is also worried that the abatement given by the government for now would be reduced in future and hence effective duty will rise. As such, textile players continue to demand for a dropping the duty altogether and ministry of textile is now set to take up the matter with Mukherjee.
Realty up 1.14%, Health Care up 0.40%, TECk up 0.25%, Power up 0.20%, IT up 0.12% were major gainers in the BSE sectoral space. Bankex down 2.08%, Consumer Durables (CD) down 1.76%, Oil & Gas down 1.34%, PSU down 1.15% and Metal down 1.04% were major losers in the BSE sectoral space.
The S&P CNX Nifty touched a high and a low of 5,775.25 and 5,687.70 respectively.
The top gainers on the Nifty were Tata Power up 2.73%, Dr Reddy up 1.72%, Power Grid up 1.58%, Cipla up 1.58% and DLF up 1.53%.
The top losers on the index were SBI down 4.16%, Kotak Bank down 4.09, IDFC down 3.85%, Ambuja Cement down 3.10% and PNB down 2.97%.
The Index of Six infrastructure industries having a combined weight of 26.7% in the Index of Industrial Production (IIP) has registered a growth of 7.4% as compared with 6.8% growth seen in the same month a year ago. Average growth in the core sector over the fiscal year 2010-11 stands at 5.9% as against 5.5% seen during the previous fiscal.
Crude oil production led the performance, registering a growth of 12.1% in March 2011 compared to a growth rate of 3.5% in March 2010. Growth in FY11 in crude production has worked out to be 11.9% as against just 0.5% during the previous fiscal. Petroleum refinery production also registered a strong growth of 8.5% in March 2010 compared with contraction of 1.1% in the year-ago period.
Steel was another sector that recorded a strong performance with total production increasing by 9.9% in March 2011 compared to 7.7% in March 2010. The alloy has seen a growth of 8.2% during April-March 2010-11 compared to an increase of 5.4% during the year-ago period. Cement production in the month under review increased by 6.5% as compared with 7.8% in the same month a year ago. Over the last fiscal, cement production grew by 4.5% against 10.5% during 2009-10.
Electricity generation in the country increased by 7.6% year-on-year in March 2010 while over the last fiscal, it has seen an increase of 5.6% as compared 6.2% growth seen in FY10. However, coal production saw a decline of 1.2% in March 2011 compared to growth of 8.0% in March 2010. Over FY11, coal production was nearly flat compared with 7.9% growth seen in the previous financial year.
Good growth in core sector has raised hopes that the IIP will also show better growth for March 2011. The IIP has been showing bleak numbers in last few months as capital goods production showed substantial slowdown amidst high inflation and rising interest rates. In February 2010, IIP had registered a growth of 3.6% while in January the index had expanded by 3.7% on year-on-year basis.
European markets were trading in mix note. France's CAC 40 was up by 0.21%, Germany's DAX gained 0.77% and Britain's FTSE 100 was trading higher by 0.03%.
All the Asian counterparts who were opened today for the trade finished the trade in the positive terrain on Monday as corporate earnings from US companies beat the market expectation. The sentiments also remained positive on President Barack Obama announcement that Al Qaeda leader Osama bin Laden has been killed. Moreover, Japanese Nikkei closed above its crucial 10,000 mark for the first time since March 11 -- the day of the country's devastating earthquake.
Jakarta Composite rose 29.68 points or 0.78% to 3,849.30, Nikkei 225 surged 154.46 points or 1.57% to 10,004.20, Seoul Composite jumped 36.60 points or 1.67% to 2,228.96.
Stock markets in China, Hong Kong, Malaysia, Singapore and Taiwan remained shut for the trade today on account of Labor day holiday. While Japanese markets will be closed from Tuesday to Thursday amid the country's annual Golden Week holiday
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