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Markets close lower ahead of Fed outcome

By Faraan Tarique
Last updated on: March 18, 2015 16:29 IST
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The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.

Benchmark indices ended lower, amid a volatile trading session, as investors turned cautious and booked profits ahead of the conclusion of US Federal Reserve two-day policy meet that would signal its take on interest rates.

US Federal Reserve may discard its pledge to remain "patient" before hiking rates, reports suggest.

Fed chair Janet Yellen will also provide updated economic forecasts by Fed policymakers in a press conference following the two-day meeting.

The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.

The markets breadth in BSE ended negative with 1,585 declines against 1,264 advances.

"Participants remained on sidelines ahead of the outcome of the US Federal Reserve's stance on interest rates at its two-day policy meet that ends today. Sentiment also remained dampened as IMF chief has said that a possible interest rate hike by the US Fed could pose risks to market stability in emerging economies. However, losses remained capped on the buzz in the market with government approving the release of Rs 33,000 crore in tranches to states and Union Territories as CST (Central Sales Tax) compensation," said Jayant Manglik, President-retail distribution, Religare Securities in a post market note.

"Considering the current market scenario, it seems difficult for the Nifty to resume uptrend in near future. We suggest to adopt stock specific trading approach and utilise this phase to gradually accumulate fundamentally strong counters from private banking, auto, infra and capital goods space," he added.

Meanwhile, foreign portfolio investors were net buyers in equities to the tune of Rs 265.52 crore on Tuesday as per provisional stock exchange data.

BROADER MARKETS

Broader markets outperformed the benchmark indices as investors turned cautious and booked profits in large-caps ahead of the US Federal Reserve's policy decision on interest rates and were seen bargain hunting in select mid-cap and small-cap shares. Suzlon was among the top gainers in the mid-cap segment on the back of heavy volumes.

Since February 16, 2015, the stock rallied 55% from Rs 19.14, after Sun Pharmaceuticals promoter Dilip Shanghvi and family acquired 23% stake in Suzlon Energy for a total consideration of Rs 1,800 crore.

Jet Airways was up 4% on the back of further drop in global crude oil prices. Aviation turbine fuel comprises of 40% of the operational costs for airlines.

Other gainers include, HMT, Just Dial, SPARC, Finolex Industries, Prism Cement ended up 5.8-17.20% higher.

In the small-cap segment, Sonata Software ended up 3.2% after Goldman Sachs India Fund acquired 2.72 million equity shares through open market.

Logistics companies gained with huge volumes. Gati surged 6% on back of heavy volumes ahead of an extra ordinary general meeting (EGM) on March 20, 2015 to take shareholders approval for fund raising plans. Aegis Logistics surged 16% and Transport Corporation of India ended up 5.2%.

Diamond Power Infrastructure has surged 13%, extending its past two days rally on the National Stock Exchange (NSE) after the company received orders worth of Rs 332 crore from Assam and Nagaland governments.

Other small-cap gainers include, Orient Paper & Industries, Elecon Engineering and Excel Crop Care among others.

SECTORS & STOCKS

Six out of the 12 sectoral indices of BSE ended in red. BSE Power index down over 1% was the top loser followed by BSE IT index down 0.9% and BSE Auto and FMCG indices down 0.6% each.

BSE Oil & Gas index, up 0.7% was the top gainer followed by BSE Bankex up 0.5%.

Tata Motors declined over 2% after the company in its release said that global wholesales for Jaguar Land Rover for February 2015 were lower at 38,541 units compared to 39,011 units in February 2015.

Among other auto shares, Bajaj Auto declined 0.7%, M&M was down 1.7% while Hero Motocorp gained 0.6% and Maruti Suzuki ended flat.

Domestic two-wheeler sales have taken a hit following the drop in rural demand due to agrarian stressors such as unseasonal rains and hailstorms which have impaired the rural economy.

Last month, Hero MotoCorp reported a drop of eight per cent in sales and for Bajaj Auto in February, the motorcycle sales fell 26 per cent, according to data by the Society of Indian Automobile Manufacturers.

Among financials and bank stocks, HDFC was down over 1% and Axis Bank ended 0.1% lower while SBI was up 1.2%, HDFC Bank was up 0.7% and ICICI Bank was down 0.2%.

Information technology stocks were under pressure. Wipro declined over 2%, TCS and Infosys were down nearly 1% each.

A whistleblower from Indian IT giant Infosys has said that H-1B workers replacing Americans have minimal skills and little or no business knowledge and asked US lawmakers not to increase the number of much sought-after visas.

HCL Technologies, down 1.6% and Tech Mahindra, down 2.4% ended lower on the bourses ahead of the bonus issue. The stock of these two technology companies will turn ex-bonus tomorrow, March 19, 2015. Bharti Airtel ended over 1% lower.

Cellphone operators are snatching up precious bandwidth in a government sale, paying top dollar for spectrum to roll out high-speed coverage across India.

Sesa Sterlite ended flat paring early gains which came after the Goa government said that mining operations would resume in the State following the Centre's revocation on Tuesday of its earlier order that suspended all environmental clearances of mines.

Hindalco and Tata Steel ended nearly 1% lower. Among capital goods stocks, BHEL was down 2.5% and L&T was down 1%.

According to media reports, the government has firmed up a list of PSUs to be divested next fiscal, starting with BHEL in April, in a bid to meet the Rs 41,000 crore stake sale target for 2015-16.

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Faraan Tarique
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