In a highly volatile trade, the benchmark BSE Sensex today fell by 24 points to 26,813.42 amid sustained foreign fund outflows triggered by deficient monsoon forecast, RBI’s cautious stance on economic recovery and rupee slumping to 20-month low.
Sentiment remained weak after the Met department projected monsoon this year to be “deficient”, triggering fears of a drought that may negatively impact corporate earnings and fuel inflation, traders said.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Expectation for FY16E at 1st January 2015 was about Rs1800 and new consensus is Rs1550, implying a downgrade of -8%. Latest earnings estimates for FY16 project 15% YoY growth. But now confidence regarding the same is low, corporate commentary is deteriorating and guidance is shaky. One-year-fwd P/E for Sensex stands at P/E of 17.3x, which is above the long-term average valuation of 15.5x. Hence it is important to improve business confidence to provide better outlook in FY17. Now, trigger is on Government spending to improve business confidence and outlook. This is a good time to be in consolidation and strategy should be to add on dips as support evolves in the global and domestic market.
Tata Steel was the top loser on Sensex by tumbling 2.58 per cent largely on weak metal prices in global markets and sluggish domestic demand.
Vedanta fell by 1.89 per cent to Rs 184 and Hindalco by 0.66 per cent to Rs 121.25.
Of 30-Sensex shares, 19 ended lower, while 11 others, led by RIL, Wipro, HDFC and HDFC Bank ended higher to cap index’s losses.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Investors were gripped with panic at the beginning of the day as plunging SGX Nifty triggered fears of a meltdown. Nifty opened with a marginal downside and later it tested a low at 8056.75, and finally closed at 8130.65 down by 0.05%. Sensex and Nifty both recovered from afternoon weakness to end the slightly lower than the previous closing.
Nifty closed 8130 down around 7 points. But the market breadth stood negative as there were seen 1270 stocks advancing against 1387 stocks declining. The Nifty volatility index, India VIX stood at 18.1225 up around 7.74%.
The mid-cap index closed up around 0.17% whereas as the small-cap index closed down around 0.04%.
The sectorial gainers for the day were Realty and Capital goods which ended up around 0.82% and 0.59% respectively whereas the major losers were the Metal and Healthcare which ended down around 1.11% and 0.77% respectively.
In the stocks’ front, the major gainers were BPCL and Reliance which closed up around 3.59% and 2.17% respectively whereas the selling was seen in NMDC and PNB closed down around 4.44% and 3.60% respectively.
The FIIs were sellers in the cash market segment on 03 June 2015, Tuesday, sold shares worth Rs 727.61 crore. The DIIs on the other hand were buyers on 03 June, bought shares worth Rs 412.66 crore in the capital markets segment.
The European markets were trading lower on the news of another round of debt deal talks of Greece and its creditors failed. The US index futures were also trading lower.
Market View by Mr. Anand James, Co Head Technical Research Desk, Geojit BNP Paribas – June 4, 2105
Nifty bounced back from the psychological level of 8000, as investors weighed in the impact of weaker rainfall and today’s positive close is indicative that investors are looking for bargain buying, deeming the recent steep falls as overdone. However, there is hardly any catalyst for domestic market at the moment and the focus should shift outside in the week ahead. With the first of the several Greece debt payment deadlines lined up for this month, scheduled for tomorrow, buyers are unlikely to chase prices much higher.
The BSE barometer opened higher at 26,940.64 and touched a high of 26,948.84 on buying in badly beaten down blue-chip stocks of the past two sessions, but on profit-booking it surrendered most of early gains to touch a low of 26,551.97.
A round of late buying in select blue-chip stocks, however, helped Sensex to recover to close at 26,813.42 points, down by 23.78 points or 0.09 per cent over its.
The gauge has now lost 1,035.57 points in three sessions.
Market View by Gaurav Jain, Director, Hem Securities
Indian markets shut the day on a flat note after recent carnage in the last few trading sessions. Investors continue to stay sidelines with keeping an eye on Greece debt repayment outcome scheduled tomorrow. Tough, late recovery was witnessed on the back of value based buying and the strengthening of rupee which opened lower.
The NSE Nifty after slipping below the 8,100-mark to touch the day’s low of 8,056.75, staged a strong comeback to wipe off most losses on value-buying towards the fag-end and settled the day 4.45 points or 0.05 per cent down at 8,130.65.
The rupee breached the crucial 64-mark to touch a 20-month low of 64.25 against the dollar (intra-session).
Sectorwise, the BSE metal index suffered the most by falling 1.11 per cent, followed by healthcare 0.77 per cent, consumer durables 0.75 per cent and auto 0.70 per cent.
BSE smallcap fell by 0.04 per cent, while mid-cap ended up by 0.17 per cent.
Globally, Asian markets ended mixed, while European markets were trading lower in their opening trade as the region’s bonds extended a drop and another round of talks failed to end a Greek debt stalemate.
China shares sink, euro rides high as yields spike
Reuters – The euro continued riding high on Thursday thanks to a spike in euro zone debt yields, while in Asian equities volatile Chinese shares slid and tempered risk sentiment.
China’s CSI300 index lost 3.5 percent while the Shanghai Composite Index dropped 3.6 percent as signs that more brokerages are starting to tighten margin trading also spoiled sentiment. The country’s equities have also sagged recently on concern that waves of new share offerings will sap liquidity in other stocks.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2 percent.
Japan’s Nikkei edged down 0.1 percent while Australian shares lost 1.3 percent.
Risk appetite warmed in some quarters after Greece’s international creditors signalled on Wednesday they were ready to compromise to avert a default.
Still, with the debt situation murky at best, spreadbetters forecast a lower open for Britain’s FTSE, Germany’s DAX and France’s CAC.
In foreign exchange, the European common currency rode the momentum gathered overnight when the European Central Bank raised its inflation forecast for 2015, in line with recent data suggesting deflationary pressures were not as pronounced as feared.
ECB President Mario Draghi followed up by saying the central bank saw no reason to adjust its monetary policy stance following the recent surge in European bond yields.
The prospect of the ECB not front-loading its bond purchases pushed euro zone yields up and propelled the euro higher.
The benchmark German 10-year Bund yield climbed to within a hair’s breadth of 0.90 percent overnight, from around 0.50 percent at the start of the week.
The euro was steady at $1.1268, having rallied about 2.5 percent so far this week.
“Unless there is a very big upside surprise in Friday’s U.S. labor market report, the EUR/USD should make its way towards $1.15. The road may be bumpy and the rally could stall at the May high of 1.1466 but the path of least resistance for the EUR/USD is higher,” wrote Kathy Lien, managing director of FX strategy for BK Asset Management.
U.S. Treasury yields rose in tandem with their European counterparts and while the dollar lost ground against the euro, higher yields helped it rebound modestly against the yen.
The dollar was up 0.1 percent at 124.36 yen after pulling away from the previous day’s low of 123.79. The currency had climbed to a 13-year high above 125 yen on Tuesday when the dollar enjoyed a broad rally on upbeat U.S. economic indicators.
In commodities, crude oil struggled after sliding overnight on concerns generated by a big build-up in distillates and with OPEC expected to reject output cuts at its meeting on Friday.
Brent crude fell 0.1 percent to $63.74 a barrel after plunging 2.6 percent the previous day.