Markets Fall On News Of Macquarie Hedge Fund Exit

The news of the exit by Macquarie Hedge Fund stunned the markets today. The markets reacted with a fall of 277 points on BSE Sensex and that of 90 points on Nifty. The reports of Infosys facing inquiry from US Department of Homeland Security for potential visa misuse in USA, dragged the Infosys stock down by 3.92%. If company is found guilty then it will attract fines and penalty as reported by Business Standard.

The global cues remained negative today which also played its part in creating the negative sentiment. The Asian markets closed negative with Hang Seng and Shanghai facing heavy sell offs. Nikkei remained 0.20% down on the news that Bank of Japan will extend the maturity of the bonds that it purchased. The European markets have extended the morning losses. 

The exit of the hedge fund from the short positions in Indian stock futures has come in response of proposed tax rules with retrospective impact.

The rupee with the current trend seems to be going towards 53 per dollar mark and hence the worries of expensive imports would be a matter of big concern for the markets.

Back home no sectoral index ended in the green zone by the end of the day. Oil and Gas which was up by morning was largely supported by RIL. RIL by the end of the day closed with 0.64% intraday gains. TCS which will announce its March quarter financial performance by the end of the day was swinging between green and red, it saw an intraday high of Rs 1102.45 while low of Rs 1046.55. Its latest shareholding pattern indicates increased FII holding in the scrip.

Among the Sensex stocks Sun Pharma was the major gainer with 1.07% gains. ONGC, RIL, NTPC and HDFC were the other Sensex stocks which were in green.

Among the individual stocks scrip of Suzlon energy failed to hold the morning gains despite winning a big ticket European order. Cairn India went down by 1.64% after the forex loss in March quarter dragged its profits down by 11%. ACC was up over 1% while Ambuja cements was down over 1%. Both companies have come up with the quarterly results in the last week.

Financial shares of Asian Paints were up 3.67% by the end of the day. The scrip is at a new peak. Max India, Glenmark Pharma, Ashok Leyland were also up among the ‘A’ group stocks.

AP Paper was up 16.44 on the news of delisting. Other Paper stocks such as JK Paper, Orient paper, Tamil Nadu Newsprint & Papers, West Coast Paper Mills, Ballarpur Industries etc were also up by the end of the day.

Top turnover was seen in SBI, Infosys, RIL, Tata Steel Gravita India etc. High volumes were seen in Gateway Distriparks, Core Projects, NTPC, Hexaware etc.

The market sentiment remained negative where 65% stocks declined while 32% stocks advanced. 3% stocks remained unchanged.

The exit of hedge fund is seen very negatively by the markets. With the GAAR coming in picture foreign direct investment would be at risk. This would have some impact on the volumes in the markets. Besides the rupee has remained very weak which is big worry for the markets. We believe the results of TCS would guide the IT stocks tomorrow but it won’t provide any clear indication of progress of the markets. We believe that the negative closing has set the tone of the market in this week. Investors may remain stock specific rather than betting on sectors.