Benchmarks turn red after a promising start

Indian equity benchmarks, after getting a promising start, slipped into negative terrain and are trading with a cut of around half a percent in early deals on Tuesday. The un-enthusing set of cues from the Asian markets seemed to have weighed on the sentiment on Dalal Street. Asian markets were trading mixed at this point of time eyeing the development in Ukraine, where United States slapped sanctions on seven Russian government officials and 17 companies linked to Russian President Vladimir Putin. Though, the US markets closed mostly higher in last session, the upbeat corporate and economic news effect was weighed down by lingering worries about Ukraine.

Back home, mining stocks remained under pressure in early deals on report that the Supreme Court may go for a Goa-like mining ban in Odisha for a period of three months to allow the state government to sort out illegalities in the mining sector and grant fresh leases. On the sectoral front realty, healthcare and software witnessed the maximum gain in trade, while metal, capital goods and banking remained the top losers on the BSE sectoral space. The broader indices too were trading in the red terrain, while the market breadth on the BSE was positive; there were 757 shares on the gaining side against 811 shares on the losing side while 57 shares remain unchanged.

The market breadth on BSE remains negative with advances to declines in the ratio of 627:730. BSE Sensex and NSE Nifty were trading near their psychological 22,500 and 6,700 levels respectively.

The BSE Sensex is currently trading at 22546.90, down by 84.71 points or 0.37% after trading in a range of 22681.89 and 22470.43.There were 7 stocks advancing against 22 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.01% and Small cap index down by 0.02%.

The top gaining sectoral indices on the BSE were, Realty up by 0.29%, Health Care up by 0.22%, IT up by 0.20% and TECK up by 0.17%, while Metal down by 1.18%, Bankex down by 0.72%, Capital Goods down by 0.68%, FMCG down by 0.50% and Power down by 0.45% were the top losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 0.63%, Mahindra & Mahindra up by 0.44%, Sun Pharma up by 0.43%, Infosys up by 0.37% and BHEL up by 0.13%. On the flip side, Tata Steel was down by 2.28%,  ICICI Bank was down by 1.43%, Hindalco Inds was down by 1.24%, Bajaj Auto was down by 1.09% and  Axis Bank was down by 1.06% were the top losers on the Sensex.

Meanwhile, planning commission is unlikely to suggest any cut in 8 percent annual average growth target for the 12th Plan despite the fact that Indian economy performed below average in the first two years of this period. Meanwhile, in order to achieve annual average growth of 8 percent in the 12th Plan period, domestic economy will have to grow at over 12 percent in 2015-16 and 2016-17 which is difficult.

Planning Commission's internal meeting to be headed by Prime Minister Manmohan Singh on April 29 would deliberate on the draft mid-term appraisal document for the 12th Plan and may refrain from suggesting any cut in growth target set for 12th Five Year plan. The mid-term review of 12th Plan will be conducted in the end of this year and the new government formed after general elections will bear the onus of revising the growth target. The term of Commission will also expire with the present government, and new government will constitute the new Planning Commission.

Presently, Indian economy is struggling with slowdown and its growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The factors like high interest rate, low investments and slow execution of infrastructure projects have been impacting economy’s growth.  The Central Statistics Office (CSO) expects the Indian economy to grow at 4.9 percent in FY14. Reserve Bank projected Indian economy growth at 5-6 percent during FY15. 

The CNX Nifty is currently trading at 6,735.00 down by 26.25 points or 0.39% after trading in a range of 6,779.70 and 6,711.10. There were 12 stocks advancing against 37 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were DLF up by 1.59%, Sun Pharma up by 1.08%, Wipro up by 0.79%, IDFC up by 0.74% and Bharti Airtel up by 0.47%. On the flip side, Tata Steel down by 2.16%, Jindal Steel down by 2.16%, Hindalco down by 1.66%, HUL down by 1.39% and Bajaj-Auto down by 1.30% were the top losers on the index.

Asian equity indices were traded mixed; Shanghai Composite increased by 0.16%, Hang Seng was up by 0.42%, KLSE Composite increased 0.09% and Taiwan Weighted was up by 0.53%.

On the flip side, Jakarta Composite dropped 0.06%, Nikkei 225 shed 0.98%, Straits Times was down by 0.37% and KOSPI slipped by 0.26%.