Sensex extends 2014 retreat to fifth consecutive day

After opening in the green, Indian equity markets fell on on Tuesday, extending their weak start to the year to a fifth consecutive session, as software stocks including Infosys dropped on caution ahead of its October-December earnings results on Friday.

Infosys provisionally fell 1.7 percent, while Tata Consultancy Services ended 1.4 percent lower.

The BSE Sensex endeddown 94.06 points at 20693.24, and the Nifty closed at 6162.25, down 29.20 points. The BSE Sensex has lost about 480 points in the last five trading sessions.

Amidst across the board selling pressure, only stocks from Consumer Durables, Capital Goods and Healthcare staged resilience. On the flip side, Metal, Realty and Oil & Gas counters were the worst hit of the session.

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Telecom stocks, viz Bharti Airtel and Idea Cellular rang loud in trade ahead of outcome of Telecom Commission’s ongoing meeting on uniform spectrum usage.

On the global front, Asian markets were mixed on Tuesday, with bargain-hunting lifting some bourses but Tokyo dropped again following heavy losses in the previous session due to a stronger yen. The mood remained largely cautious ahead of weak US economic data and week’s key risk events. However, European shares continued to trade in green, with investors now looking ahead to Wednesday’s release of minutes from the Fed’s recent policy meeting, policy decisions from the European Central Bank and Bank of England on Thursday, and finally, Friday’s closely-watched December US non-farm payrolls report.

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According to John-Paul Smith, Global Emerging Market Equity Strategist, Deutsche Bank, markets will end 2014 with positive returns, but lower than 2013.

He expects emerging markets to do worse than developed markets and sees emerging market equities falling by about 10 percent in absolute terms in 2014. Smith expects volatility to continue this year too on the back of elections and also due to the structural problems plaguing the corporate sector in India - the high levels of debt in some key areas such as the utility and industrial sectors.

“There is also the question on whether we will see a shake up or the beginnings of a shake up in terms of ownership and control of some of the Indian corporates,” he said in an interview with CNBC-TV18.

With inputs from Reuters