Global sell-off casts shadow on D-Street

After trading flat for most part of the session, markets closed the first trading day of the week on a desolate note tracking a sell-off in European markets after mixed US economic data raised uncertainty over global growth.

The S&P BSE Sensex closed at 24,287, down by 329 points while the Nifty50 ended at 7,387, down by 102 points.

According to Kunal Bothra, "After another recovery on Friday, the markets sold off start of the week. Repeating the phenomena of last week. The strength sector was Bank Nifty which managed to hold the markets extremely strong till first half, with a smart recovery in many PSU banks as well as Pvt banks."

He added, "However, in the end, it was a broad based selling, with many stocks closing at the low point of the day. The jump in IndiaViX could indicate that there would be one more round of volatility which could be due in the near term." 

Until the government unveils its Union Budget for FY16/17 on February 29, global factors would continue to impact the local equities. 

Further, investors have put a cautious foot forward ahead of the announcement of key macro-economic data that includes December quarter gross domestic data (GDP), consumer inflation data (CPI) for the month of January.

Investors would also take cues from corporate earnings of the remaining companies that will conclude this week.

In an announcement, the government has set a minimum import price for steel products to check dumping from countries such as China and South Korea.

GLOBAL MARKETS

US markets plunged on Friday amid a sharp decline in technology shares and as mixed US employment data rekindling concerns that the Federal Reserve may hike interest rates this year.

The Dow Jones Industrial Average fell 1.3% while the NASDAQ Composite index cracked 3.25%.

Meanwhile in Asia, Singapore, Hong Kong and mainland China benchmark indices are shut on account of Lunar New Year holiday. Japan’s Nikkei is trading 0.6% lower taking cues from the Wall Street.

European equities have come under selling pressure as mixed US employment data has casts uncertainty over the US Fed stance. DAC, CAC, FTSE are all trading below 2% each.

KEY STOCKS

IT shares weakened tracking the sharp decline in technology shares on the Nasdaq. TCS, Infosys, and Wipro all dropped between 2-3% each.

Promius Pharma LLC, a subsidiary of Dr Reddy’s Laboratories Limited, has received an approval from the US Food and Drug Administration (US FDA) for Sernivo (betamethasone dipropionate) Spray. The stock, however, weakened by 1.2%.

Tata Motors has declared a lockout at its bus manufacturing plant in Karnataka's Dharwad, following a continued strike by workers. The stock slid 4%.

Crude oil prices slipped in Asia today as worries about the on-going supply glut offset news that the oil ministers of Saudi Arabia and Venezuela had held talks on stabilising the beleaguered market. ONGC and RIL dropped between 1-2% each.

The steel sector gained momentum after the government set a minimum import price for steel products to check dumping from countries such as China and South Korea. However, the weakness in local equities impacted steel shares. JSW Steel and Tata Steel gained between 0.1-1% each while Jindal Steel and SAIL ended lower.

Banks gained on improving credit demand after the government set a minimum import price for steel products to check dumping from countries such as China and South Korea.

Axis Bank, SBI, ICICI Bank gained between 0.1-3% each while HDFC twins dropped 2% each.

Tata Power ended down by 1% after the consolidated net plunged a whopping 88% to Rs 24 crore in the three months to December due to an exceptional loss of Rs 187 crore arising from falling global coal prices.

Among other shares, Jet Airways (India) rallied 4% after the company reported a record quarterly profit of Rs 467 crore for the third quarter ended December 31, 2015 (Q3FY16) aided by low fuel costs.

The company had recorded a profit of Rs 63 crore in December 2014 quarter.

Procter & Gamble Hygiene and Health Care (P&G) surged 7% on the BSE after the company posted a strong 62% year on year (YoY) jump in net profit to Rs 148 crore for the second quarter ended December 31, 2015.