Benchmarks trade in red; Nifty slips below 6700 mark

Indian equity benchmarks have given up their gains to trade in red on account of selling in frontline blue chip counters. Though, the market started the trade on firm note but caution prevailed after Chinese Academy of Social Sciences (CASS), one of Beijing’s top government think tanks, revised its 2014 GDP growth forecast down to 7.4%, below the official 7.5% target, and added that growth could slow to as low as 7%. Traders were seen piling positions in Oil & Gas and FMCG stocks, while selling was witnessed in Realty, Capital Goods and Power sector stocks. In scrip specific development, Indian Overseas Bank was trading firm after it reported over four-fold jump in net profit at Rs 268.33 crore for the last quarter of FY2013-14 year-on-year, driven by cyclical and floating provision inflow of Rs 324.2 crore. Dabur India was trading in green after the company’s sales volumes growth beat rivals for the January-March quarter despite a challenging macro environment.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,700 and 22,400 levels respectively. The market breadth on BSE was trading in red in the ratio of 926:1674 while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 22395.26, down by 70.93 points or 0.32% after trading in a range of 22,680.46 and 22,349.37. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices too have pared gains; the BSE Mid cap index was down by 1.23%, while Small cap index was down 1.55%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.36% and FMCG up by 0.04% while, Realty down by 4.96%, Capital Goods down by 2.04%, Power down by 2.02%, Metal down by 2.01% and Consumer Durables down by 1.66% were top losing indices on BSE.   

The top gainers on the Sensex were Gail India up by 2.45%, Dr. Reddy’s Lab up by 1.37%, M&M up by 0.94%, Hero MotoCorp up by 0.75% and SBI up by 0.74%.

On the flip side, SSLT down by 3.97%, Tata Power down by 2.78%, Hindalco Industries down by 2.66%, Tata Steel down by 2.34% and L&T down by 2.16%.

Meanwhile, as monsoon rainfall is likely to be weak this year, the agriculture ministry is making unprecedented preparations to make sure that food production will not badly hit by the weather. At Present, chief officials of the Agriculture Ministry are on state tours and are consulting with farmers on drought preparedness. However, in the previous year, agriculture ministry did not take any action even after the month of June went without rain. The Ministry is working hard to counter impact of weak monsoon rains amid concerns that inflation may remain sticky in the current financial year as a possible El Nino effect on the monsoon is likely to push up food prices and geopolitical uncertainties are also expected to pump up global commodity rates.

The Agriculture Ministry has also planned to make more states and suggest farmers to use of seeds that are less water intensive as well as contingency plans. Agriculture Commissioner JS Sandhu has asserted that Ministry’s plan include recommending short-duration crops in some regions and planting of Basmati, which needs lesser water than regular grades of rice. Further, he added that states will be recommended to coordinate with different departments like irrigation and power to ensure supply of canal water and electricity.

Over the past four months, retail prices of pulses and rice have already risen 10% to 27% from a year earlier due to unseasonal rain and hailstorms.  On commodity wise, prices of urad dal has increased from Rs 41,000 per tonne to Rs 45,000 per tonne in last four months, while prices of yellow peas have gone up to Rs 30,000 per tonne from Rs 26,500 per tonne.

The CNX Nifty is currently trading at 6,692.80, down by 22.45 points or 0.33% after trading in a range of 6,780.15 and 6,677.95. There were 18 stocks advancing against 32 declining ones on the index.

The top gainers of the Nifty were Gail India up by 2.82%, Dr. Reddy’s Lab up by 1.33%, Asian Paints up by 1.19%, M&M up by 0.91% and SBI up by 0.85%.

On the flip side, DLF down by 7.97%, SSLT down by 4.04%, Tata Power down by 3.46%, Hindalco Industries down by 2.59% and Ambuja Cement down by 2.32% were the major losers on the index.

Asian equity indices were trading mostly in green; Straits Times was up by 0.75%, Shanghai Composite up by 0.30%, Jakarta Composite up by 0.27% and Nikkei 225 was up by 0.11% while, Hang Seng declined by 1.42%, Taiwan Weighted dropped 0.91%.

The European markets were trading on mixed note; France’s CAC 40 was down 0.21%, Germany’s DAX lost 0.02% and UK’s FTSE 100 gained 0.07%.