Benchmarks continue to trade listless; positive European markets start may reverse losses

Benchmark equity indices continue to trade listless in absence of any positive trigger, which could lift the spirits at Dalal Street. This combined with prevailing caution ahead of few prominent earnings, like Hindustan Unilever, Idea Cellular among others also was underpinning market-participants to remain on the side lines. Sulking at day’s low, while Sensex was trading below the crucial 22, 700, Nifty was oscillating above the crucial 6750 bastion, with losses of over quarter of a percent. Meanwhile, broader indices acting contrary to larger counterparts were trading with gains in the range of 0.25%-0.50% respectively. However, benchmarks may recoup in its loss with positive start of European counterparts going further in the session.

On the global front, Asian shares were beaten blue on Monday after an uninspiring performance on Wall Street and amid increasing tension in Ukraine, which kept risk appetite in check and helped bolster the safe-haven yen. Pro-Russian rebels paraded European monitors they are holding in eastern Ukraine on Sunday, freeing one but saying they had no plans to release another seven as the United States and Europe prepared new sanctions against Moscow. On the flip side, European equities bounced back in early trading on Monday, with AstraZeneca surging after U.S. drugmaker Pfizer confirmed it made a bid approach for Britain's second biggest drugs group.

Closer home, selling, mostly of a profit-booking nature, by participants at current levels amid forecast of below normal monsoon this year, influenced the trading sentiments. While, stocks from FMCG and Capital Goods and Auto counters were the major pockets of weakness, those from Healthcare, Power and Technology were restricting the downside of the markets.

So far the earnings that were reported disappointed the street, while IDFC plummeted over 2% on reporting 50.93% fall in its Q4 Consolidated net profit at Rs 257.94 crore for the quarter ended March 31, 2014, Cera Sanitaryware dropped 0.35% despite reporting 38.84% rise in its net profit at Rs 19.34 crore for the quarter ended March 31, 2014. The overall market breadth on BSE continues to remain in the favour of declines which thumped advances in the ratio of 1226:1184; while 125 shares remained unchanged

The BSE Sensex is currently trading at 22645.27, down by 42.80 points or 0.19% after trading in a range of 22721.36 and 22597.19. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices contrary to larger counterparts went on adding ground; with BSE Mid cap index trading higher by 0.51% and Small cap index gaining 0.26%.

The gaining sectoral indices on the BSE were Healthcare up by 1.57%, Power up by 0.13%, TECK up by 0.10%, Oil and Gas up by 0.80% and Information Technology up by 0.07%. While, FMCG and Capital Goods were down by 0.58% each, Auto down by 0.51%, PSU down by 0.38% and Realty down by 0.36% were the losing indices on BSE.   

The top gainers on the Sensex were Cipla up by 2.41%, Dr Reddys Lab and Sun Pharma were up by 1.54%, Wipro up by 0.91% and SSLT up by 0.88%. On the flip side, Gail India down by 1.99%, BHEL down by 1.57%, Hero Motocorp Coal India were down by 1.43% each and  Tata Motors was down by 1.23%

Meanwhile, buoyant over the improving macro-economic situation of the country, Finance Minister P Chidambaram has asserted that Indian economy will strengthen in future on the back of recent measures taken by the government. The CAD will be brought down significantly to around $32 billion as compared to record high of $88.2 billion or 4.8% of GDP in FY13. Finance Minister added that CAD has not only been fully and safely financed but $ 28.5 billion has also been added to the reserves during the previous fiscal year.

Chidambaram stated that India’s fiscal deficit will be contained within the target at 4.6% of GDP during FY14. Attributing the latest rally in capital market to improving domestic economy Finance Minister stressed that investors are becoming more confident about the stability and strength of India's economy. Regarding the tax collections, Chidambaram added that there has been shortfall in overall tax collection in the last fiscal. The government has collected about Rs 5,500 crore direct taxes more than the revised estimate of Rs 6,41,835 crore during FY14. However, there has been a shortfall of indirect tax of about Rs 17,000 crore due to less collection of Central Excise and Service Tax segments.

Finance Minister further asserted that the Cabinet Committee on Investment (CCI) has speeded up implementation of large infrastructure projects. So far, the CCI has considered 169 big infrastructure projects out of which 108 have cleared and fresh loans to the extent of Rs. 1,02,292 crore have been released to the project promoters.  The government expects Indian economic growth to improve around 5.5-6% in the FY15.

The CNX Nifty is currently trading at 6,764.55, down by 18.20 points or 0.27% after trading in a range of 6,783.20 and 6,750.30. There were 16 stocks advancing against 34 declining on the index.

The top gainers of the Nifty were Cipla up by 2.35%, Sun Pharma up by 1.77%, Tech Mahindra up by 1.68%, Dr Reddy’s Lab up by 1.49% and Lupin up by 1.34. On the flip side, Ambuja Cement down by 3.90%, IDFC down by 2.32%, ACC down by 2.28%, Gail down by 2.17% and Asian Paints down by 1.98% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng down by 0.39%, Shanghai Composite down by 1.42%, Straits Times was down by 0.20%, Nikkei 225 down by 0.98% and Jakarta Composite plunged 1.03%. On the flip side, only Taiwan Weighted was up by 0.41%.

European shares, however got off to a positive start, with CAC 40 adding 0.45%, DAX rising by 0.49% and FTSE 100 gaining 0.41%.