Markets extend southward journey for the second day in a row

Extending their previous session’s southward journey, Indian equity benchmarks ended Friday’s trade in the red with a cut of over half a percent, with market participants squaring off their positions ahead of the 9-phase Lok Sabha elections starting from April 7, 2014. Domestic bourses, throughout the session, traded in the red and ended the session near intraday lows, below their crucial 22,400 (Sensex) and 6,700 (Nifty) levels, as sentiments remained dampened on International Monetary Fund’s report stating that India’s declining economic growth, which has touched a decade’s low of 4.5 percent in 2012-13, is mainly due to internal factors. In its World Economic Outlook, it said that External factors have generally been much less important compared with internal factors for relatively large or closed economies such as China, India and Indonesia.

Global cues too remained dismal with the US markets ending modestly lower in last session ahead of the release of monthly jobs report on Friday. Sentiments remained down-beat on account of the report showing a bigger than expected increase in weekly jobless claims. Moreover, most of the Asian markets ended lower, awaiting US payrolls data. However, European markets made a positive opening and CAC, DAX and FTSE all were trading with mild profits in early deals.

Back home, weakness in Indian rupee too weighed down sentiments. The rupee was trading at 60.27 at the time of equity markets closing versus its previous close of 60.16/17, tracking weakness in local shares. Dollar demand from importers also hurt. Most other Asian currencies were trading weaker compared with the dollar. Caution also prevailed ahead of US jobs data due post market close. Meanwhile, stocks related to auto space tumbled on profit-booking after two consecutive sessions of gains.

On the flip side, shares of real estate companies remained in demand on back of heavy volumes in otherwise weak market. Housing Development and Infrastructure (HDIL), Ajmera Realty, Kolte Patil Developers, Unitech, Indiabulls Real Estate, D B Realty, Prestige Estates, Anant Raj, DLF, Oberoi Realty and Sobha Developers all edged higher in the day’s trade. Additionally, shares in sugar manufacturer continued their northward moment after the India Ratings revised its FY15 outlook on the sector and the companies within the sector to ‘negative to stable’ from negative.

The NSE’s 50-share broadly followed index Nifty declined by over forty points to end below the psychological 6,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around one hundred and fifty points to finish below the psychological 22,400 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,648 shares on the gaining side against 1,135 shares on the losing side while 147 shares remain unchanged.

Finally, the BSE Sensex plunged by 149.57 points or 0.66%, to settle at 22359.50, while the CNX Nifty lost 41.75 points or 0.62% to settle at 6,694.35.

The BSE Sensex touched a high and a low of 22525.21 and 22339.40, respectively. The BSE Mid cap index was up by 0.37%, while the Small cap index gained 0.80%.

The top gainers on the Sensex were Cipla up by 1.98%, Tata Steel up by 0.84%, SBI up by 0.47%, Hindalco Inds up by 0.44% and Coal India up by 0.41%, while BHEL down by 1.95%, NTPC down by 1.95%, Bharti Airtel down by 1.74%, Tata Motors down by 1.50% and Gail India down by 1.48% were the top losers in the index.

On the BSE Sectoral front, Realty up by 3.37%, Metal up by 0.25%, Consumer Durables up by  0.21% and PSU up by 0.08% were the only gainers, while Auto down by 1.00%,  IT down by 0.95%, Teck down by 0.92%, Power down by 0.83% and Capital Goods down by 0.74% were the top losers in the space.

Meanwhile, according to RBI’s fortnightly data, bank deposits grew by 14.64 per cent year-on-year to Rs 7,739,387 crore as on March 21, higher than credit which grew by 14.31 per cent year-on-year at Rs 6,013,085 crore in the same period against Rs 5,260,459 crore in the same period last year.

Deposits at commercial banks stood at Rs 6,750,454 crore during the same period last year. This growth is more or less in line with the RBI's estimate of the credit and deposits growth of 15% and 14% respectively for the current fiscal, 2013-14.

Meanwhile, out of the total deposits, the Time deposits grew by 15.28 percent at Rs 7,018,585 crore as against Rs 6,088,155 crore in the same period last year, while Demand deposits rose 8.83 percent to Rs 7,20,800 crore from Rs 6,62,299 crore in the year ago periodThe CNX Nifty touched a high and low of 6,741.85 and 6,685.15 respectively.

The top gainers of the Nifty were DLF up by 2.18%, Cipla up by 2.17%, PNB up by 1.64%, IndusInd Bank up by 1.13% and Tata Steel up by 1.08%. On the other hand, BHEL down by 2.32%, NTPC down by 2.20%, Power Grid Corporation of India down by 2.02%, HCL Technologies down by 1.88% and United Spirits down by 1.81% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.27%, Germany's DAX was up by 0.38% and United Kingdom's FTSE 100 was up by 0.47%.

The Asian markets concluded Friday’s trade mostly in red with investors treading cautiously ahead of the US jobs report scheduled to be released later in the day. Taiwan markets remained shut for the trade today on account of Children’s Day holiday. Indonesia’s central bank is expected to leave the benchmark policy rate unchanged when its board of Governors will meet on Tuesday, as pressure has eased on both the current-account deficit and the rupiah. The street is projecting that Bank Indonesia (BI) would keep the policy rate unchanged at 7.50% for a fifth consecutive month.

Chinese commercial banks saw their non-performing loans jump by more than 20% to 592 billion yuan (almost $95 billion) in 2013. Likewise, the ratio of non-performing loans to total lending has also edged up to 1% of banks’ total portfolio in 2013, up from 0.95% in 2012. Malaysia’s trade balance rose more-than-expected last month. Malaysian Trade Balance rose to 10.40B, from 6.40B in the preceding month. Philippines CPI fell to a seasonally adjusted annual rate of -0.1%, from 0.1% in the preceding quarter.