Benchmarks continue to sulk in red on sustained selling pressure

Languishing at day’s low, benchmark equity indices continue to sulk in red with loss of over half a percent in late morning deals on continued selling pressure from both fund and retail investors in absence of any supportive global cues. Besides, cautious approach of market-participants, ahead of Index of Industrial Production (IIP) data today and Retail inflation data early next week, also is adding to bourses’ losses. Losses in today’s trading session are led by IT stocks, while Capital Goods and Metal counters too are making substantial contribution to the downside. Additionally, banking stocks too have been on downhill trajectory since early deals after a Reserve Bank of India (RBI) panel recommended a slew of measures, including potentially changing how lending rates are set for the sector, raising worries about overall profitability.

Despite trading at day’s low, local equity markets are in comparatively better space than global peers, with Sensex and Nifty trading above the crucial 22,550 and 6,750 levels, albeit with loss of close to half a percent. On the flip side, broader indices yet again outdoing their larger counters are trading with gains of over half a percent.

On the global front, Asia's markets slumped on Friday following hefty plunges on Wall Street as United States technology stocks suffered another sell-off, while China released data showing inflation picked up in March but was still below forecasts

Back home, the BSE Sensex is currently trading at 22,573.39 down by 141.94 points or 0.62% after trading in a range of 22,642.05 and 22,548.74. There were 5 stocks advancing against 25 stocks declining on the index. The market breadth on BSE was positive, out of 2,069 stocks traded, 1086 stocks advanced, while 879 stocks declined on the BSE.

The broader indices were trading in green; the BSE Mid cap index was up by 0.61%, while Small cap index up by 0.59%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.19%, Healthcare up by 1.17% and Realty up by 0.70%, while IT down by 0.95%, Metal down by 0.81%, Capital Goods down by 0.79%, Teck down by 0.70% and FMCG down by 0.58% were the top losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 2.14%, Cipla up by 1.01%, Dr Reddys Lab up by 0.90%, Tata Motors up by 0.28% and Bharti Airtel up by 0.22%. On the flip side, SSLT down by 2.02%, HDFC down by 1.92%, Mahindra & Mahindra down by 1.90%, Maruti Suzuki down by 1.65% and Gail India down by 1.47%.

Meanwhile, the oil ministry has shunned the plan to form an inter-ministerial committee to determine gas prices every quarter based on the C Rangarajan committee formula and has decided to utilize its own expertise to compute new rates. With this development, the ministry now wants its number-crunching wing, the Petroleum Planning & Analysis Cell (PPAC), to approve and notify gas prices calculated on the basis of the complex formula every quarter.

The formula was notified in January and the new system to determine gas prices was to be adopted starting April 1, but since the model code of conduct for elections restricted the government from taking any policy decision, the Election Commission held back the ministry from implementing the new system.

Initially, the ministry wanted the committee to be led by the PPAC's director-general, while other members were to be the financial adviser to the integrated finance division, Gail India's marketing director, Petronet LNG's commercial director and a Customs official. But later it was observed that no committee was required and the prices could be fixed by the ministry after obtaining data.

With this, Oil ministry has now requested the PPAC to determine gas prices three weeks before the beginning of every quarter after obtaining data subscriptions and manpower from Gail, which has expertise in gas marketing. Post to which, PPAC could notify the prices on a quarterly basis based on the procedure approved by the Cabinet Committee on Economic Affairs (CCEA) and by obtaining the data from standard sources.

The CNX Nifty is currently trading at 6,754.15 down by 42.25 points or 0.62% after trading in a range of 6,773.55 and 6,743.15. There were 14 stocks advancing against 36 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 1.88%, NMDC up by 1.47%, Ambuja Cement up by 1.18%, Dr. Reddy's Laboratories up by 1.16% and Cipla up by 0.96%. On the flip side, HDFC down by 2.17%, IndusInd Bank down by 2.10%, SSLT down by 1.92%, Maruti Suzuki down by 1.77% and M&M down by 1.53% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 0.59%, Hang Seng slipped by 0.84%, Nikkei 225 tumbled 2.30%, Straits Times shed by 0.12%, KOSPI Composite dropped by 0.12% and Taiwan Weighted was down by 0.74%. On the flip side, Jakarta Composite was up by 0.44%.