Benchmarks Magnify losses; Nifty slips below 6750 mark

Indian bourses Magnifying losses, continued to trade in red in the late morning session, with the Sensex losing over 100 points and Nifty traded below the 6750 level, weighed down by banks, FMCG, capital goods and metals stocks. Sentiment weakened as foreign investors sold index futures, worth Rs 11.70 billion ($193.21 million) over the previous two sessions. The markets has begun the proceedings on a promising note, with the benchmark indices actually making modest gains, but were unable to latch on to the gains. Moreover, the trade is expected to turn choppy as the session progresses as foreign institutional investors remain on sidelines ahead of election verdict.

On global front, Asian markets were trading mixed ahead of the Federal Reserve’s monthly meeting. Investors are forecasting the US central bank to cut another $10 billion from its monthly bond purchases, keeping in line with its objective of winding down the stimulus by the end of this year. Wall Street indices ended in the green as investors weighed continuing deal frenzy in the pharmaceuticals sector against the possible impact of tougher sanctions on Russia.

Back home, IRB Infrastructure is trading higher after it got an order worth Rs 3200 crore from the National Highways Authority of India (NHAI). Moreover, Fulford (India) is locked in upper circuit for a second consecutive day up 20% at Rs 988 on the BSE after its promoter Dashtag propose a voluntary delisting of the company’s equity shares from the Indian sock exchange. Aditya Birla Money, Alstom T&D India, Federal Bank, Dabur India, TVS Motors and Bharti Airtel will be in focus on account of March quarter earnings announcement.

The market breadth on BSE was positive, out of 2034 stocks traded, 977 stocks advanced, while 961 stocks declined on the BSE. The BSE Sensex is currently trading at 22522.12 down by 109.49 points or 0.48% after trading in a range of 22681.89 and 22470.43. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index gained 0.20%.

The top gaining sectoral indices on the BSE were IT up by 0.34% and Teck up by 0.26%. While, Metal down by 1.86%, Bankex down by 0.97%, Power down by 0.67%, Auto down by 0.65% and FMCG down by 0.62% were the losing indices on BSE.   

The top gainers on the Sensex were Wipro up by 1.31%, Sun Pharma up by 0.74%, Bharti Airtel up by 0.33%, Infosys up by 0.32% and TCS up by 0.23%. On the flip side, Tata Steel down by 3.30%, Bajaj Auto down by 1.83%, Hindalco down by 1.81%, Hindustan Unilever down by 1.52% and Cipla down by 1.32%.

Meanwhile, the new foreign trade policy (FTP) to be introduced this year will focus on measures to boost India's exports and reduce dependence on imports. Additional Director General of Foreign Trade (DGFT) Sumeet Jerath has asserted that India being a part of World Trade Organization (WTO) cannot ignore supporting import substitution and the focus of the new policy would be to strongly promote both exports and imports with significantly substantial focus on exports. The five-year FTP (2009-14) ended on March 31 and the new government after the general election will introduce new FTP for the period 2014-19.

Jerath further asserted that under the new FTP, old regulations and procedures governing exporters will be changed and pruned to suit the exports requirements of the modern times so that the realistic targets are made achievable. He also informed that DGFT will soon issue a report which will suggest way forward as to how the new government should tackle the issues relating to higher transaction cost to enable exporters achieve the desired level of exports to both developed and developing economies. New FTP will be aimed to enhance India’s exports share in global trade to over 5 percent from current level of 2 percent.

The policy may also review the current schemes which are not in compliance with the World Trade Organization (WTO) norms. According to global exports norms, India cannot provide export subsidies to a sector if outbound shipments from those particular segment crosses 3.5 percent share in the global market.

It has become imperative to boost country’s exports which have been hovering near $300 billion over the last three fiscal years. In FY14, India's exports grew marginally by 3.96 percent to $312.35 billion, which was below the set export target at $325 billion.

The CNX Nifty is currently trading at 6,729.60 down by 31.65 points or 0.47% after trading in a range of 6,779.70 and 6,711.10. There were 16 stocks advancing against 34 declining ones on the index.

The top gainers of the Nifty were Wipro up by 1.27%, Grasim up by 0.86%, Ambuja Cements up by 0.80%, ACC up by 0.80% and DLF up by 0.71%. On the flip side, Jindal Steel down by 4.07%, Tata Steel down by 3.29%, Hindalco down by 1.95%, Bajaj-Auto down by 1.90% and Hindustan Unilever down by 1.66% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng was down by 0.11%, Jakarta Composite dropped 0.19%, Nikkei 225 shed 0.98%, Straits Times was down by 0.41% and KOSPI slipped by 0.27%. On the flip side, Shanghai Composite increased by 0.18%, KLSE Composite increased 0.02% and Taiwan Weighted was up by 0.75%.