Indian markets make gap down start on profit booking

After a jubilant previous session’s run, the Indian equity markets have made a gap down start as investors booked their profits recorded in the previous sessions amid a weak trend in other Asian markets. The US markets managed to make a flat closing with a positive bias overnight while, all the Asian peers barring Jakarta Composite were trading in the negative terrain at this point of time, indicating somber investors’ sentiment. Back home, BSE’s Sensex declined below 15,600 level in opening trade as funds and retail investors locked in gains recorded in the previous session amid a weakening trend overseas. On the sectoral front fast moving consumer goods and healthcare remained the only gainers while, software, technology and metal witnessed the most selling pressure, dragging down the Sensex. Meanwhile, IT stocks like Infosys, TCS, Wipro and HCL Tech edged lower after dismal results from Oracle Corp, the world's No.3 software maker, stoke renewed fears of a slowdown in global technology spending. Capital goods pivotals declined on worries that new order flows will be hit adversely in a slowing economy. However, FMCG pivotals -- Hindustan Lever and ITC rose on defensive buying. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 416 shares on the gaining side against 909 shares on the losing side while 54 shares remained unchanged. 

The BSE Sensex opened at 15,546.66; about 139 points lower compared to its previous closing of 15,685.21, and has touched a high and a low of 15,589.35 and 15,491.80 respectively.

The index is currently trading at 15,535.09 down by 150.12 points or 0.96%. There were 6 stocks advancing against 24 declines on the index.

The overall market breadth has made a negative start with 30.17% stocks advancing against 65.92% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined by 0.79% and 0.66% respectively.

The few gaining sectoral indices on the BSE were, FMCG up by 0.72% and HC was up by 0.03%. While, IT down by 2.01%, TECk down by 1.95%, Metal down by 1.51%, Bankex down by 1.23% and Realty down by 1.17% were the top losers on the index.

The top gainers on the Sensex were HUL up by 1.30%, Cipla up by 0.66%, ITC up by 0.59%, NTPC up by 0.59% and ONGC up by 0.58%.

On the flip side, ICICI Bank was down by 2.43%, Jindal Steel was down by 2.20%, Infosys was down by 2.12%, Wipro was down by 2.11% and Bharti Airtel was down by 1.95% were the top losers on the Sensex.

Meanwhile, Global credit ratings agency Moody's Investor Service has lifted India’s local currency debt rating by one notch to the lowest investment grade, in-line with the foreign currency bond ratings at Baa3 with a stable outlook. The global rating agency highlighted that India’s stable outlook indicates Moody’s medium-term assessment of Asia’s third largest economy’s growth, fiscal, and balance of payments outlook, relative to other countries.

The rating agency had earlier rated rupee denominated sovereign debt at the highest junk grade of Ba1 while the foreign currency bond rating remained at Baa3 previously as well.  Though the agency acknowledged the fact that India's economic growth will continue to slow over the next two quarters, however it was convinced that the GDP growth rate for Asia’s third largest economy will remain above the average for similarly rated countries.

The US-based Moody’s also has not ruled out the chances of upgrading India’s credit rating as it said that the rating can be considered for an upgrade provided Indian government finances improve, investment climate enhances and infrastructure bottlenecks reduce. The rating agency has forecasted that India’s GDP growth will ease to below 7% in the fiscal year ending March 2012 while it expects the nation’s budget deficit to widen to about 7.6% of GDP in the period.

Moody’s highlighted that credit strengths that led to stable outlook for India’s rating are large, diversified economy, robust medium-term growth prospects and a strong domestic savings pool that aids the financing and refinancing of the government's relatively high debt burden. However, the credit challenges that face the nation are wide and persistent fiscal deficits, a policy process often hamstrung by domestic politics, susceptibility to inflationary pressures, and the limitations that poor social and physical infrastructure place on growth.

The S&P CNX Nifty opened at 4,636.90; about 57 points lower compared to its previous closing of 4,693.15, and has touched a high and a low of 4,670.30 and 4,634.00 respectively.

The index is currently trading at 4,652.25, lower by 40.90 points or 0.87%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 1.38%, Ranbaxy up by 1.31%, HUL up by 1.21%, BPCL up by 1.06% and ACC up by 0.62%.

On the flip side, RCom down by 3.32%, Sesa Goa down by 2.99%, ICICI Bank down by 2.41%, Jindal Steel down by 2.27% and Infosys down by 2.14%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 9.63 points or 0.44% to 2,181.52, Hang Seng was down 98.06 points or 0.53% to 18,318.39, Nikkei 225 was down 48.74 points or 0.58% to 8,411.24, Straits Times was down 9.85 points or 0.37% to 2,663.47, Seoul Composite was down 4.26 points or 0.23% to 1,844.15 and Taiwan Weighted was down by 7.78 points or 0.11% to 6,958.70.

On the flip side, Jakarta Composite was up by 3.87 points or 0.10% to 3,798.14 remained the lone gainer among the Asian pack.