End Session Commentary

Nifty hits three-week closing low
(18-Apr-2017, 17:00 Hours IST)  

Key benchmark indices settled with modest losses in a volatile session of trade as a strong intraday rally was derailed by sell-off in late trade. Weakness in European stocks caused reversal in intraday gains. The barometer index, the S&P BSE Sensex, fell 94.56 points or 0.32% to settle at 29,319.10. The Nifty 50 index dropped 34.15 points or 0.37% to settle at 9,105.15. The Sensex hit its lowest closing level in over three weeks. The Nifty hit three-week closing low. Key indices declined for the fourth day in a row today, 18 April 2017.

Reliance Industries, Sun Pharmaceutical Industries and L&T dropped. Metal and mining stocks fell as copper prices declined in global commodity markets. Bank stocks were mixed.

After seeing a gap-up opening triggered by positive Asian stocks, the key benchmark indices extended gains and hit fresh intraday high in morning trade. Indices hovered in a tight range in positive terrain till early afternoon trade. Key benchmark indices pared intraday gains in afternoon trade as lower opening in European stocks pulled local indices off their highs. Market sunk in negative zone and hit intraday low in late trade.

The Sensex fell 94.56 points or 0.32% to settle at 29,319.10, its lowest closing level since 27 March 2017. The index gained 287.53 points or 0.97% at the day's high of 29,701.19, its highest level since 12 April 2017. The index lost 127.28 points or 0.43% at the day's low of 29,286.38.

The Nifty shed 34.15 points or 0.37% to settle at 9,105.15, its lowest closing level since 28 March 2017. The index gained 78.60 points or 0.86% at the day's high of 9,217.90, its highest level since 12 April 2017. The index fell 43.85 points or 0.48% at the day's low of 9,095.45.

The BSE Mid-Cap index shed 0.63%. The BSE Small-Cap index dropped 0.74%. The fall in both these indices was higher than the Sensex's decline in percentage terms.

The breadth, indicating overall health of the market was weak. On the BSE, 1,771 shares declined and 1,112 shares rose. A total of 143 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (down 0.45%), the S&P BSE Energy index (down 1.04%), the S&P BSE Capital Goods index (down 0.69%), the S&P BSE Industrials index (down 0.75%), the S&P BSE Realty index (down 3.48%), the S&P BSE Basic Materials index (down 0.84%), the S&P BSE Consumer Durables index (down 0.73%), the S&P BSE Healthcare index (down 0.94%), the S&P BSE Metal index (down 1.81%), the S&P BSE Teck index (down 0.38%), the S&P BSE Telecom index (down 0.94%), the S&P BSE Auto index (down 0.75%), and the S&P BSE Consumer Discretionary Goods & Services index (down 0.63%), underperformed the Sensex.

The S&P BSE Utilities index (up 0.27%), the S&P BSE Bankex (down 0.02%), the S&P BSE Finance index (down 0.19%), and the S&P BSE Power index (up 0.03%) outperformed the Sensex.

The S&P BSE IT index fell 0.32% and the S&P BSE FMCG index shed 0.32% and matched with the Sensex's fall in percentage terms.

The total turnover on BSE amounted to Rs 4294.72 crore, higher than the turnover of Rs 3478.74 crore registered during the previous trading session.

Metal and mining stocks dropped as copper prices declined in global commodity markets. Vedanta (down 2.42%), JSW Steel (down 3.68%), Steel Authority of India (Sail) (down 1.87%), Hindustan Zinc (down 1.87%), Jindal Steel & Power (down 2.02%), NMDC (down 0.94%), Hindustan Copper (down 1.82%) edged lower. Hindalco Industries (up 1.24%) and National Aluminium Company (up 1.8%) rose.

Copper edged lower in the global commodities market. High Grade Copper for May 2017 delivery was currently off 1.6% at $2.5545 per pound on the COMEX.

Tata Steel lost 2.55% after the company said its board meeting will be held on 20 April 2017, to consider a proposal for fund raising. The announcement was made after market hours yesterday, 17 April 2017.

Shares of public sector bank stocks were mixed. Union Bank of India (down 0.65%), Punjab National Bank (down 1.73%), Syndicate Bank (down 1.04%), Andhra Bank (down 1.26%), Oriental Bank of Commerce (down 0.3%), and Dena Bank (down 0.26%) declined. State Bank of India (SBI) (up 0.17%), Canara Bank (up 0.55%), Bank of India (up 3.03%), Indian Overseas Bank (up 0.72%), Bank of Baroda (up 0.03%), and Indian Bank (up 0.35%) gained.

Shares of private sector banks were also mixed. IndusInd Bank (down 0.63%), Kotak Mahindra Bank (down 0.99%) and Yes Bank (down 0.31%) declined. HDFC Bank (up 0.68%) and ICICI Bank (up 0.46%) gained.

Axis Bank lost 0.89%. The bank announced that it has retained the marginal cost of funds based lending rates (MCLR) at the same levels across tenors. The bank's MCLR for overnight loans will be 7.9%, for one month will be 7.9% and for three months will be 8.05%.

The MCLR on 6-month loans will be 8.15% and for one-year loans the rate would be 8.25%, the bank said. MCLR for two-year loans would be at 8.3% and loans with three-year maturity would carry an MCLR of 8.35%, the bank said. The new loans will be priced at the published internal benchmark MCLRs as mentioned above with effect from 18 April 2017. The announcement was made after market hours yesterday, 17 April 2017.

DCB Bank surged 2.37% to Rs 177.35 on reports that a domestic brokerage has maintained add rating on the stock for a target of Rs 190. Shares of DCB Bank had declined 3.56% to settle at Rs 173.25 yesterday, 17 April 2017, after the bank reported weak Q4 March 2017 results on Friday, 14 April 2017. The stock market was shut on that day for a holiday.

DCB Bank's net profit declined 24% to Rs 52.86 crore on 20.2% increase in total income to Rs 612.64 crore in Q4 March 2017 over Q4 March 2016. The bank's provisions and contingencies rose 24.5% to Rs 33.93 crore in Q4 March 2017 over Q4 March 2016.

The market declined for the fourth straight day today, 18 April 2017. The Sensex has fallen 469.25 points or 1.57% in four trading sessions from its close of 29,788.35 on 31 March 2017. It has fallen 301.40 points or 1.01% in this month so far (till 18 April 2017). The barometer index has gained 2,692.64 points, or 10.11% in the calendar year 2017 (till 17 April 2017). From a 52-week low of 25,057.93 hit on 6 May 2016, the barometer index has risen 4,261.17 points or 17%. From a 52-week high of 30,007.48 hit on 5 April 2017, the barometer index is off 688.38 points or 2.29%. The Sensex is off 705.64 points or 2.35% from a record high of 30,024.74 hit on 4 March 2015.

Meanwhile, India Meteorological Department (IMD) in its first stage forecast of southwest monsoon for 2017, today, 18 April 2017, said that quantitatively, the monsoon seasonal rainfall is likely to be 96% of the long period average (LPA) with an error of ± 5%. Forecast assessment suggests 38% of probability for near normal monsoon rainfall, it added. IMD will issue the update forecasts in early June, 2017, as a part of the second stage long range forecast of monsoon rainfall.

Overseas, most European stocks were trading lower with commodity shares struggling and investors were nervous ahead of the first round of voting in France's presidential election on Sunday, 23 April 2017.

Meanwhile, in a surprise move, UK Prime Minister Theresa May has announced plans for an early general election on 8 June 2017. In an unscheduled speech delivered today, 18 April 2017, May said an election is needed because other parties in parliament are opposed to the Conservative-led government's Brexit plans.

Most Asian stocks gained. US stocks rose the most in six weeks yesterday, 17 April 2017 as investors turned their attention to first-quarter corporate earnings.

Geopolitical tensions, notably those between the US and North Korea, have heightened worries about aggressions escalating into a nuclear confrontation. Over the weekend, North Korea put on a massive military parade, followed by a failed missile launch. In an unannounced visit to the Korean Peninsula's demilitarized zone, US Vice President Mike Pence yesterday, 17 April 2017 warned North Korea not to test the resolve of President Donald Trump or the military strength of the US.

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