Resuming their southward journey, Indian equity benchmarks ended the session slightly in the red on Tuesday as investors opted to book some of their profit after a huge rally in previous session. In the choppy session of trade, benchmarks after trading in a tight range for first part of the session witnessed sharp selling pressure in the second half and the indices even went on to test important psychological 27,350 (Sensex) and 8,300 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed their losses from thereon as investors continued hunt for fundamentally strong stocks. Sentiments remained down-beat on a private report that the level of optimism about business environment among chief financial officers in the country declined in April-June period largely owing to slower pace of reforms than initially expected and weak profit level of the corporates. Traders were also cautious regarding development in the parliament, where important bills like GST and Real Estate Regulatory Authority Bill will be up for debate. The fall in domestic stocks were partially also on worries that the remaining January-March quarterly earnings may not meet market expectations. Notably, January-March would mark the fourth straight quarter of disappointing results with low signs of on-the-ground revival in the economy since the election of Narendra Modi as Indian Prime Minister in May 2014. On the global front, Asian markets ended mostly in the red, led by over 4% fall in Chinese market as media reports of crackdown on margin financing added to already existing worries about the slowing economy and the prospect of new initial public offerings sucking liquidity out of the market. However, European markets, after a cautious start, were trading in green in early deals on Tuesday. Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 63.47 per dollar at the time of equity markets closing compared with its previous close of 63.42 per dollar. Meanwhile, selling in infra stocks too dampened the sentiments with Finance Minister Arun Jaitley scouting bigger engagement of Asian Development Bank (ADB) and saying that in addition to supporting conventional infrastructure projects, deeper engagement on development of Smart Cities, Industrial Corridors, Rail transport and manufacturing is needed. On the other hand, stocks related to realty space extended their previous session’s gains triggered by clarity on tax issue related to Real Estate Investment Trusts and Infrastructure Investment Trusts. Moreover, the metal pack, including Vedanta, Hindustan Zinc and Tata Steel have gained around 5% each, extending their previous day’s gains on the bourses, after LMEX index hit four-month high on Friday. The decision of the ministry of finance to cut export duty on iron ore (for 58% fe grade and below) from 30% to 10% with effect from June 1, 2015 seems to have boosted the sentiment on metal counter. The NSE’s 50-share broadly followed index Nifty declined by around ten points to end below the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over fifty points to end below its crucial 27,450 mark. Broader markets however, outperformed benchmarks and ended the session in green with a gain of around half a percent. The market breadth was evenly divided, as there were 1375 shares on the gaining side against 1370 shares on the losing side while 116 shares remain unchanged. Finally, the BSE Sensex declined by 50.45 points or 0.18% to 27440.14, while the CNX Nifty lost 7.15 points or 0.09% to 8,324.80. The BSE Sensex touched a high and a low of 27603.71 and 27338.23, respectively. The BSE Mid cap index was up by 0.60%, while Small cap index up by 0.08%. The top gainers on the Sensex were Vedanta up by 6.64%, Tata Steel up by 4.95%, Hindalco up by 4.65%, ONGC up by 4.35% and Hindustan Unilever up by 2.19%. On the flip side, Mahindra & Mahindra down by 2.27%, HDFC down by 1.88%, SBI down by 1.86%, Cipla down by 1.71% and Bajaj Auto down by 1.45% were the top losers. The gaining sectoral indices on the BSE were Metal up by 2.86%, Oil & Gas up by 0.95%, Realty up by 0.93%, Healthcare up by 0.52% and PSU up by 0.39%, FMCG up by 0.37% while, Power down by 0.84%, Consumer Durables down by 0.60%, INFRA down by 0.42%, TECK down by 0.25% and Bankex down by 0.17% were the losing indices on BSE. Meanwhile, a private survey by analytics firm Dun & Bradstreet (D&B) has stated that the level of optimism about business environment among chief financial officers (CFOs) in the country declined in April-June period largely owing to slower pace of reforms than initially expected and weak profit level of the corporates. According to the survey, the Composite CFO Optimism Index for April-June period of 2015 declined by around 4.9 percent on quarter-on-quarter basis but rose by about 24.5 per cent on year-on-year basis. Majority of CFOs expect level of financial risks on the company's balance sheet and risk appetite to remain unchanged during April-June quarter of 2015. While the optimism level of both services and industrial sectors moderated during the second quarter of 2015, the optimism level of the services sector moderated strongly than the industrial sector. The survey opined that “Slower pace of reforms than initially expected, weak profit level of the corporates, non-revival in the demand conditions, policy logjam in upper house coupled with a tepid global recovery have led to the weak sentiment among the CFOs.� The CNX Nifty touched a high and low of 8,355.65 and 8,280.60 respectively. The top gainers on Nifty were Kotak Mahindra Bank up by 6.40%, Sesa Sterlite up by 6.12%, NMDC up by 5.12%, Tata Steel up by 5.03% and Hindalco Industries up by 4.51%. On the flip side, Cairn India down by 2.35%, Mahindra & Mahindra down by 2.15%, Housing Development Finance Corporation down by 1.96%, Cipla down by 1.72% and State Bank of India down by 1.68 % were the top losers. Most of European Markets were trading in the green; France's CAC was up by 0.14% and UK’s FTSE was up by 0.40%, while Germany's DAX was down by 0.01%. The Asian markets closed mostly in red on Tuesday, with Chinese exchange making the biggest drop since January 19, and the seventh biggest fall over five years, amid reports that domestic stockbrokers are pulling back from lending clients money to buy shares, as regulators become increasingly concerned about the fierce nature of a recent stock-market rally. Japanese stock exchange was closed today on account of ‘Greenery Day’ holiday while South Korea exchange was closed on account of ‘Children’s Day’ holiday. The fierce rally on the Shanghai Composite is worrying domestic regulators, in part, because many investors’ gains have been achieved with leverage. The China Securities Regulatory Commission has issued several warnings about stock market risks. There were additional fears that liquidity will be sucked from the market by a spate of IPOs and the weakness spilled over into Hong Kong. Hong Kong Retail Sales fell to a seasonally adjusted annual rate of -2.9%, from 14.9% in the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.2%, from -0.1% in the preceding quarter while Taiwanese CPI fell to a seasonally adjusted annual rate of -0.13%, from 0.55% in the preceding quarter. Indonesia’s economy grew at the slowest pace in more than five years in the first quarter, feeling the effects from weak exports and lower crude oil prices. Gross domestic product rose 4.71% in the January-March period from the same quarter in 2014. Growth slowed from 5.01% in the fourth quarter of last year and was the weakest since the 4.12% pace in the third quarter of 2009. On a quarter-on-quarter basis GDP rose 0.18%. Finance Minister Bambang Brodjonegoro stated that the country is introducing a tax amnesty this month to boost revenues as slowing economic growth puts pressure on the government to increase spending. The amnesty will last until the end of the year and allows citizens to avoid penalties if they pay five years of unpaid taxes.

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