5th April, 2013 : Sell-off continues; Sensex, Nifty lie low

iiflThe crack gets bigger and bigger for the Indian equity markets as the downfall further extended to third straight trading session on Friday. Reports stated that continues offloading by the India-focused exchange-traded funds (ETFs) further dragged the benchmark indices lower. These funds were reportedly facing strong redemption pressure. The NSE Nifty has now dropped over ~200 points in last three trading session.

Another dampener was that on the currency front the Indian Rupee was seen depreciating against the US Dollar. The USDINR April future was seen hitting an intra-day low of 55.03 in mid afternoon trades.

Today’s decline was led by FMCG, Capital Goods, Power and the Banking stocks. Index heavy weights like ITC, NTPC, HDFC, Ambuja Cement, M&M, ACC and ICICI Bank were among the top laggards in the index.

Finally, BSE Sensex closed at 18450, down 59 points over the previous close. It had earlier touched a day’s high of 18525 and a day’s low of 18389. It opened at 18493.

The NSE Nifty closed at 5,553, down 21 points over the previous close. It earlier touched a day’s high of 5,577 and a day’s low of 5534. It opened at 5,568.

“A combination of domestic and overseas headwinds continues to play havoc with the markets’ sentiment. Upcoming, Q4 results season could keep investors on the sidelines. On Friday, Infosys will announce its quarterly and yearly numbers. Investors will hope it can spring a surprise last quarter. The guidance will be closely tracked. A wait and watch approach may seem prudent to tide over the current turbulence,” says Amar Ambani, Head of Research, IIFL.

RIL, Tata Power, ONGC, Maruti Suzuki, Jindal Steel, Hero MotoCorp, Bajaj Auto, Gail India, Hindalco Inds, Dr Reddys Lab, Coal India, HUL, Sun Pharma were among gainers in Sensex and Nifty.

Surprisingly the advance decline ratio was in favour of bulls. 1422 stocks advanced against 1306 declining stocks, while 138 stocks remained unchanged.

The INDIA VIX surged 2% to close at 16.16. It hit a day’s high of 16.47 and day’s low of 15.23.

Stocks which hit 52-week high during the week were Nilachal Refractories, Dhanleela Inv, Grandma Trad, SHRSHA TEX and Lifeline Drugs.

Stocks which hit 52-week low during the week were Banco Products, First Leasing, Hero MotoCorp, Jain Irrigation and Sesa Goa.

Stocks in News

ITC increased cigarette prices by 14-18% stated reports. The hike was in line after the government announced an increase in the excise duty on cigarettes in Budget 2013. Shares of ITC declined by 3% to close at Rs290.

The Cabinet Committee on Economic Affairs has given a much-needed boost to India’s Rs 80,000 crore sugar industry. Sugar prices will now be market-linked but state controls like distance between sugar mills, sugarcane area reservation and setting of cane prices (over and above the government’s fair & remunerative price will continue to remain.

Income tax department has slapped Rs39bn tax order on AV Birla Group on two group entities, Idea Cellular and Aditya Birla Telecom Limited (ABTL), according to reports. Shares of Idea declined by 3.5% to close at ~Rs102.

GMR Infrastructure gained by 3.2% to close at Rs22 after Megawide Construction said it would jointly bid GMR Group to for the development of Mactan-Cebu International Airport (MCIA) in Philippines.

Reliance Industries gained by 1.5% to close at Rs779 after reports stated that it is in talks with banks to raise $2bn, according to reports.