Weakness in global stocks takes shine off Indian markets

The BSE Midcap and Smallcap indices underperformed the largecaps and ended over 1% lower.

Markets finished lower amid a volatile trading session weighed down by weakness in global stocks even as a stellar third quarter earnings from Infosys helped capped further downside.

The S&P BSE Sensex lost 81 points to close at 24,773 and the Nifty50 shed 26 points to end at 7,537.

Meanwhile, BSE Midcap and Smallcap indices underperformed the largecaps and ended over 1% lower each. Market breadth ended lower with 1,883 declines and 805 advances on the BSE.

Brent oil stayed below $30 a barrel as prices remained weak in Asia today after US crude and fuel inventories rose, adding further anxiety over a global supply glut.

On the currency front, the rupee again breached the 67-mark to trade at 67.22 against the US dollar depreciating 32 paise due to strong demand for the American unit from importers and banks amid weakness in the local equities.

Meanwhile, the wholesale price index (WPI)-based deflation persisted for the 14th straight month in December with the index dropping 0.73% compared to 1.99% in November.

KEY STOCKS

Shares of Infosys surged 5% and emerged as the star performer after the company reported a better-than-expected 1.98% quarter on quarter (q-o-q) growth in consolidated net profit at Rs 3,465 crore for the third quarter ended December 31, 2015 (Q3FY16).

Revenues grew 1.7% at Rs 15,902 crore on sequential basis. It raised its revenue guidance for FY16 backed by strong volume growth of 3.1% for the October-December quarter, perceived traditionally as a seasonally weak quarter.

Additionally, healthcare stocks soared in today’s trade with Lupin, Cipla and Dr Reddy’s Lab ending higher between 0.7%-3% on fresh buying interest at lower attractive valuations.

On the flip side, Tata Steel dipped 3% after the rating agency Standard & Poor's downgraded the long-term corporate credit rating by a notch to 'BB-' from 'BB', citing weak financial performance and high debt leverage.

Meanwhile, weakness in the commodity space pushed the metal stocks lower with Hindalco, SAIL, JSW Steel, Jindal Steel, Vedanta down between 0.5%- 7%. 

Another stock that cracked today was Tata Motors ending 2.5% lower. GenX Nano, launched by Tata Motors in May last year to push up sagging sales of the country’s cheapest car, has not been able to deliver yet.

Sales volume of Nano, though more than the previous year, is much lower than most of the early years.

Further, the company announced that a meeting of the board of directors of the company will be held on 18 January 2016 to consider and approve buyback of unsecured non-convertible debentures aggregating Rs 200 crores due to mature on 30 November 2018.

Shares of four oil exploration and production firms declined further as crude oil prices extended losses. ONGC, Cairn India, Reliance Industries and Oil India closed between 1%-2%.

Other prominent losers include Axis Bank, BHEL, SBI, L&T, GAIL and Hero Motocorp down between 1.5%-4%.

GLOBAL STOCKS

World equities sank across the board tracking a fall in the Wall Street amid sustained weakness in oil prices and commodities that raised concerns about the health of the global economy.

Japan’s Nikkei, Hong Kong’s Hang Seng dived between 1%-2%. However, China’s Shanghai Composite index bucked the trend and gained 2%.

Meanwhile, in the European peers, the benchmark indices FTSE, CAC 40 and DAX mirrored the trend and are trading lower between 2%-2.5%.