Benchmarks continue to reel under pressure; broader indices outperform

Local equity markets in absence of any positive triggers continued trading weak, with both Sensex and Nifty nursing loss of close to half a percent, hanging a little above the psychological 22,400 and 6700 levels respectively. Nonetheless, the session clearly belongs to broader indices, which outperforming larger peers are trading with gains of around half a percent.

Profit-booking in most blue-chip stocks after shares hit their ninth consecutive record high on Thursday and caution ahead of key U.S. jobs data later in the day has led to second consecutive down session at Dalal Street. Additionally, squaring off position by market-participants ahead the general elections scheduled to start next week, also added to the underlying cautious undertone.

On the global front, Asian markets were settling for a subdued session on Friday as investors counted down the hours to the U.S. jobs report, while European shares managed to get to mostly positive start after the European Central Bank opened the door to more aggressive easing, albeit not just yet.

Closer home, in the subdued session of trade, while most of the sectoral indices were languishing in red, stocks from Realty, Consumer Durables and Metal were outperforming. Nevertheless, stocks from Capital Goods, Auto and Oil & Gas counters were the weak spells of trade. Among non-sectoral guage, Shares in sugar companies, Bajaj Hindusthan, Balrampur Chini Mills and Shree Renuka Sugars, among others were trading higher after a spike in sugar prices which is likely to boost manufacturers’ margins. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1091:736; while 39 shares remained unchanged.

The BSE Sensex is currently trading at 22411.23, down by 97.84 points or 0.43% after trading in a range of 22,525.21 and 22369.20. There were 9 stocks advancing against 20 stocks declining on the index, while 1 stock remained unchanged.

The broader indices too edged higher; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.76%.

The gaining sectoral indices on the BSE were Realty up by 1.57%, Consumer Durables up by 0.84%, Metal up by 0.23%, Bankex up by 0.19% and Healthcare up by 0.09%. While, Capital Goods down by 1.05%, Auto down by 0.78%, Oil and Gas down by 0.74%, Power down by 0.61%, FMCG down by 0.60% and Auto down by 0.13% were the losing indices on BSE.   

The top gainers on the Sensex were Cipla up by 1.01%, Hindalco inds up by 0.95%, Tata Steel up by 0.65%, Wipro up by 0.46% and Axis Bank up by 0.30%. On the flip side, BHEL down by 2.29%, Gail India down by 1.93%, Bharti Airtel down by 1.44%, ONGC down by 1.32%, and Bajaj Auto down by 1.26%.

Meanwhile, the Reserve Bank of India (RBI) Governor Raghuram Rajan expressed need for India to match China in accumulating foreign exchange reserves. RBI’s Governor has asserted that the economy cannot be said to be insulated from external shocks, unless foreign domestic exchange reserves rise to the level of China.

Raghuram Rajan stressed that India’s current level of forex reserves are probably not enough to feel safe. Presently, the central bank has $300 billion foreign reserves whereas China's foreign exchange reserves stood at staggering $3.66 trillion as of end 2013, making it the largest in the world. Since Raghuram Rajan assumed office on September 4, the RBI reserve has increased by $25 billion to $300 billion as of March 31. The reserves had surged to an all-time high of $322 billion in September 2011.

The Governor further emphasized that the central bank's intervention in the foreign exchange market is only to curb volatility caused by the higher inflows or outflows and to intervene perfectly the central bank need plenty of reserves. Besides building forex reserves, there is also need to focus on creating policy environment which boosts investor confidence adding that RBI has been taking measures to boost confidence.

The CNX Nifty is currently trading at 6,708.80, down by 27.30 points or 0.41% after trading in a range of 6,741.85 and 6,696.80. There were 21 stocks advancing against 29 declining on the index.

The top gainers of the Nifty were PNB up by 1.61%, DLF up by 1.22%, Cipla up by 0.97%, Tata Steel up by 0.88% and NMDC up by 0.82%. On the flip side, BHEL down by 2.51%, Gail down by 1.88%, Asian Paints down by 1.62%, ONGC down by 1.43% and Bajaj Auto down by 1.38% were the major losers on the index.

Asian equity indices were trading in red; Jakarta Composite down by 0.88%, Hang Seng down by 0.18%, Nikkei 225 down by 0.05% and Straits Times was down by 0.25%. While, Shanghai Composite up by 0.69%.

European shares got off to a mostly positive start; with CAC 40 edging higher by 0.42%, DAX  gainning 0.06%, however FTSE100 get off to a weak start was trading lower by 0.15%