The 30-share Sensex dropped 155 points to end at 27,735 and the 50-share Nifty shed 31 points to close at 8,398.
Markets ended lower on Thursday despite the clarification on minimum alternate tax by the government while a weak monsoon forecast raised concerns about an uptick in inflation.
Further, investors turned cautious ahead of fourth quarter earnings from Infosys while worries about Greece also dampened sentiment.
Meanwhile, rating agency Moody's today said emerging economies in Asia Pacific region, including India, have a high degree of immunity to external shocks, but will face challenges when the US Federal Reserve begins raising interest rates.
The 30-share Sensex dropped 155 points to end at 27,735 and the 50-share Nifty shed 31 points to close at 8,398.
MARKET VIEW
“The last 6 out of 7 days, we have witnessed an extreme bout of selling in the key indices and stocks.
Every rise getting sold and Bulls coerced to give in recently, with key supports breached.
Today, was no different day, where volatility was extreme. We believe that the approach to the market remains cautious.
If the indices break the previous low and close below that (i.e. 8270), then it could trigger a short term correction.
Else, this could very well be termed as a bounce off the support levels. However, for a new trend to begin, Banknifty has to break 19000 levels. ” said Kunal Bothra, Head -Advisory, LKP. ECONOMY
The clarification from the Indian government that it would honor tax treaties while making a demand of Minimum Alternate Tax (MAT) at the effective rate of 20 per cent came as a relief for favorable treaty nations. But, dilemma still hangs over funds from other nations whose treaties do not grant an exemption from capital gains.
The first monsoon forecast by the Indian Metrological Department (IMD) has predicted below normal rainfall during the season for the second straight year in 2015 primarily due to the build-up of El Nino conditions in the Pacific Ocean.
Disruptions in the normal rainfall is likely to put further pressure on the agriculture sector which is already reeling under the impact of unseasonal rains that have damaged crops in parts of country and may lead to higher food inflation making further rate-cuts by Reserve Bank of India less likely.
KEY STOCKS
On the sectoral front, BSE Healthcare, Auto, Capital Gods, Oil & Gas, Realty and Power indices are trading lower up to 1%.
However, BSE Consumer Durables and Metal indices are trading higher by 1% each. Metal stocks ended firm in today’s trade after Bank of America-Merrill Lynch said the sector's return on equity will double by FY17 end. The research house reinstated coverage on Indian steel makers, with "buy" ratings on Tata Steel, SAIL, JSW and Jindal Steel and Power.
Tata Steel gained 5%. Vedanta (earlier known as Sesa Sterlite) climbed nearly 0.5% and Hindalco was up 0.2%. Coal India advanced 1.3% after Brokerage firm CLSA maintained its 'buy' rating on the stock.
YES Bank ended higher by 7% on the National Stock Exchange (NSE) on back of heavy volumes after the private sector lender said that its board approved a proposal to increase foreign institutional investor (FII)/foreign portfolio investors (FPI) limit to 74% from the existing limit of 49% of the paid-up share capital.
According to media reports, Maruti Suzuki has plans of launching a series of new cars for the Indian market in 2015.
Unveiled at the 2015 Geneva Motor Show, the Maruti Suzuki YRA model will be named as 'Fronx' for the Indian market.
The stock was up 1%. TCS ended the session with marginal gains after the company teams up with Solace Systems team to deliver digital Reimagination solutions and services.
Select IT shares remained under pressure for the seventh straight session over concerns about quarterly earnings. Infosys shed over 0.7% ahead of the quarterly earnings due tomorrow and Wipro lost nearly 2%.
According to reports, M&M is planning to invest Rs 2,500 crore in expaniding its existing auto manufacturing facility in Telangana., which will increase its capacity to 1.5 lakh vehicles per year.
The stock slipped over 1%. On the concern of poor monsoons ahead of the June-to-September monsoon season, auto, financials and FMCG stocks ended lower. ITC was down 0.3%,
Tata Motors lost over 2%, Hero motocorp shed 1%, HUL slipped 0.6%, SBI dropped 2.4%, Axis Bank and ICICI Bank dipped 0.3% each. HDFC Bank lost 0.4%. HDFC Bank posted a 20.6% rise in net profit in the fourth quarter ended March 31, 2015 due to a higher loan growth.
The bank had a net profit to Rs 2806.91 crore for Q4 compared to Rs 2,326.52 crore in same quarter previous fiscal.
The number of new launches in residential real estate has come down by 55 per cent in the first quarter this year owing to subdued sales, according to a report.
From the realty pack, Unitech, IB Realty, Godrej, Anantraj, HDIL and NBCC were down up to 2%. In the broader market, BSE Midcap index outperformed the peers and was up 0.6%.
However, BSE Smallcap index lost 0.2%. Market breadth ended lower with 1,434 declines versus 1,377 advances.
