Markets end first trading session of 2016 on a tepid note

The S&P BSE Sensex closed at 26,190, up by 43 points and Nifty50 settled above 7,950 to end at 7,963, up by 17 points

Markets ended the first day of the New Year on a tentative note as selling pressure in IT shares limited the gains across the bourses.

The S&P BSE Sensex closed at 26,190, up by 43 points and Nifty50 settled above 7,950 to end at 7,963, up by 17 points.

Indian equities were directionless today as most of the world financial markets were closed on account of New Year.

According to Kamlesh Rao, CEO, Kotak Securities said, “We expect to see a gradual rise in markets backed by greater confidence in corporate earnings in FY17 coupled with robust economic growth. We expect the India Inc. bottom line to start improving over the next few months. We expect private sector capex to rise as demand sustains, capacity utilization expands and balance sheet stress reduces either through asset sales or better cash-flows and the overall confidence in long term growth of the economy increases.”

He further said, “We are positive on Private Sector Banks. Sectors such as Roads, Railways and Defence are in a sweet spot as government spending is expected to pick up. We expect some action in Power and related sectors, IT, Pharma and Auto.”

Among macro data, the combined index of eight core industries comprising nearly 38 per cent of the weight of items included in the index of industrial production (IIP) fell 1.3 per cent in November 2015 over November 2014. This further dampened the sentiments at the D-Street.

Meanwhile, Foreign Portfolio Investors were net sellers to the tune of Rs 258 crore on Thursday as per provisional stock exchange data. However, they were net buyers in Indian equities to the tune of Rs 17,269 crore in 2015 till December 29, 2015.

Rupee

Continuing its slide, the rupee depreciated by 5 paise to trade at 66.20 against the US dollar on the first trading day of 2016 due to fresh buying of the American currency by banks and importers.

Marking the fifth consecutive year of depreciation, the rupee ended 2015 with a yearly loss of 312 paise, or 4.95 per cent, against the US dollar on heavy funds outflows.

Key stocks

Automobile companies started releasing their December sale figures today. The country's largest car maker, Maruti Suzuki, reported a 13.5 per cent increase in domestic sales for December 2015. The stock gained 0.4 per cent.

Mahindra & Mahindra reported a rise of 4 per cent in their sales for December. The stock, however, finished nearly 1 per cent lower.

HDFC dropped 0.5 per cent after the mortgage lender announced that profit on sale of investments plunged by 50 per cent to Rs 57 crore for the quarter that ended December.

Tata Group chairman Cyrus Mistry is positive about new growth opportunities across continents after substantially deploying the $35 billion capital expenditure he had earmarked about two years ago. Tata Motors soared 2.7 per cent.

Petrol price was cut by 63 paise per litre and diesel by Rs 1.06 a litre as global crude oil prices continue to retreat. OIL, IOC, HPCL, and BPCL gained between 1-3 per cent each.

Aviation stocks flew high today on reports about a cut in Aviation Turbine Fuel (ATF) prices. Jet Airways (India), InterGlobe Aviation and SpiceJet hit their fresh 52-week highs on back of heavy volumes as they gained between 7-8 per cent each.

In change of leadership event, Atul Sobti is the new as chairman and managing director (CMD) of state-owned power equipment maker BHEL as he assumed charge today. The stock gained 1 per cent.

Cadila Healthcare after slumping 15 per cent on receiving a warning letter from the US Food and Drug Administration (US FDA) for its two facilities in Gujarat finished up 1 per cent as investors bought the stock at attractive valuations.

China’s activity in the manufacturing sector contracted for a fifth straight month in December, suggesting the government may have to step up policy support to avert a sharper slowdown. However, metal pack finished mixed with Vedanta Coal India, NMDC, finishing over 1 per cent while Tata Steel, Jindal Steel, JSWSteel, ending between 1-2 per cent each.

Technology pack also took a beating with Infosys, TCS and Wipro dropping between 0.1-1 per cent each as US initial jobless claims climbed to 287,000, an increase of 20,000 from the previous week's unrevised level of 267,000.