If today’s low holds, the Nifty may make a laboured attempt to reach 5,850
The lacklustre Union Budget which proposed higher taxes on corporates and individuals saw the market paring its early gains and crashing by over 2% from the day’s high. If today’s low holds, the Nifty may make a laboured attempt to reach 5,850. The National Stock Exchange (NSE) recorded a high volume of 141.50 crore shares on account the expiry of the February F&O derivatives contract and advance decline ratio of 350:1167.
The market opened higher on supportive global cues. US stocks closed higher for the second day on Wednesday as Federal Reserve chairman Ben Bernanke reiterated to support the bond-buying initiative. Markets in Asia were higher in morning trade on positive sentiments from the US and a successful bond auction in Italy. However, domestic investors were focussed on the Union Budget, to be announced by finance minister P Chidambaram later in the day.
The Nifty opened 37 points higher at 5,834 and the Sensex resumed trade at 19,265, up 113 points over its close on Wednesday. Gains in capital goods, PSU, realty and oil & gas sectors led the benchmarks to their intraday highs in initial trade itself. The Nifty went up to 5,850 and the Sensex touched 19,322 at their respective highs.
Profit booking at the highs resulted in the market paring a small part of its early gains with the indices moving sideways till the presentation of the budget. The benchmarks began a slow descent as the finance minister began his budget speech. Concerns about the fiscal deficit and the ongoing slowdown of the economy weighed on investors.
The hike in excise duty on the auto sector and cigarettes pushed the market into the red in noon trade. However, the market emerged into the positive for a short while as the finance minister concluded his budget speech.
Selling in capital goods, banking, oil & gas and metal sectors led the market lower in subsequent trade. The decline gathered momentum in the post-noon session as higher taxes on corporates in the budget proposals failed to enthuse investors. Heavyweights led by State Bank of India, Tata Steel, Jindal Steel and Power and ICICI Bank led the sell-off.
The market collapsed to its low in the last half hour of trade with the Nifty going down to 5,672 and the Sensex tumbling to 18,794. The benchmarks closed near the low point of the day as the budget failed to get the investors’ support.
The Nifty settled 104 points (1.79%) down at 5,693 and the Sensex declined 291 points (1.52%) to finish trade at 18,862.
The broader indices were badly hit, as the BSE Mid-cap index tumbled 2.46% and the BSE Small-cap index tanked 1.97%.
The sectoral gainers were BSE Consumer Durables (up 0.85%); BSE IT (up 0.47%) and BSE TECk (up 0.11%). Among the losers were BSE Power (down 4.29%); BSE Bankex (down 3.59%); BSE Capital Goods (down 3.39%); BSE Metal (down 2.95%) and BSE PSU (down 2.81%).
Five of the 30 stocks on the Sensex closed in the positive. The main gainers were TCS (up 2.14%); Bharti Airtel (up 0.62%); Tata Motors (up 0.49%); Sun Pharma (up 0.40%) and Bajaj Auto (up 0.35%). The major losers were State bank of India (down 5.80%); Tata Steel (down 4.04%); ICICI Bank (down 3.86%); Maruti Suzuki (down 3.74%) and Larsen & Toubro (down 3.17%).
The top two A Group gainers on the BSE were—Opto Circuits (up 4.19%) and MCX (up 2.39%).
The top two A Group losers on the BSE were—Suzlon Energy (down 33.81%) and Reliance Communications (down 11.82%).
The top two B Group gainers on the BSE were—Gennex Laboratories (up 20%) and Intec Capital (up 15.15%).
The top two B Group losers on the BSE were—Plethico Pharma (down 19.99%) and Punjab Communications (down 19.95%).
Of the 50 stocks on the Nifty, 11 ended in the green. The key gainers were TCS (up 2.53%); Bharti Airtel (up 1.01%); Bajaj Auto (up 0.96%); HCL Technologies (up 0.71%) and Kotak Mahindra Bank (up 0.69%). The top losers were Reliance Infrastructure (down 9.44%); SBI (down 5.08%); Ranbaxy Laboratories (down 4.95%); Bank of Baroda (down 4.64%) and IDFC (down 4.49%).
Markets in Asia closed in the positive on hopes that the new governor of the Japanese central bank would initiate fresh measures to boost the country’s economy. Optimism from the US and Europe also boosted sentiments.
The Shanghai Composite jumped 2.26%; the Hang Seng climbed 1.96%; the Jakarta Composite surged 1.68%; the KLSE Composite advanced 0.83%; the Nikkei 225 jumped 2.71%; the Straits Times gained 0.27%; the Seoul Composite was up 1.12% and the Taiwan Weighted rose 0.22%.
At the time of writing, the key European markets were trading with gains of up to 0.50% and the US stock futures were marginally higher.
Back home, foreign institutional investors were net buyers of shares totalling Rs106.36 crore on Wednesday. Similarly, domestic institutional investors were net buyers of equities amounting Rs 24.69 crore.
The board of directors of Clariant Chemicals (India) at its meeting has recommended a final dividend of Rs17.50 per equity share of the face value of Rs10 each. The stock fell 0.16% to close at Rs545 on the NSE.
Tata Consultancy Services announced that it has been designated as a Leader in Life Science Drug Safety Services (DSS) by the prominent global market intelligence firm IDC. Among the attributes that earned TCS its leadership position in the “IDC MarketScape: Worldwide Life Science Drug Safety Services 2013 Vendor Assessment” are the company’s significant industry expertise, strong drug safety IT and KPO delivery capabilities and investment in drug safety specific IP assets. The key criteria for defining excellence included: breadth of service offerings, diversity of resources and infrastructure-supporting services delivery, project experience in the Life Sciences DSS outsourcing market, customer service strategy and customer satisfaction, pricing model, go-to-market capabilities and commitment to growth and innovation in the R&D DSS space. The stock rose 2.53% to close at Rs 1,520.70 on the NSE.