Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions amid a weak trend in global markets.  However, traders got some support after Reserve Bank of India (RBI) Governor Raghuram Rajan expressed optimism on India’s growth rate going beyond the 5 percent mark soon. Overseas investors, who have been the biggest driver of the current rally, continue to be net buyers in the cash market. However, the momentum has come down sharply over the last few days. FIIs bought equities worth Rs. 46 crore on Tuesday. Traders were seen piling positions in Consumer Durables, Capital Goods and HealthCare stocks while selling was witnessed in IT, Tech and Metal sector stocks.

In scrip specific development, shares of Vijaya Bank fall as much as 1.94% after reporting a 39.39% decline in net profit to Rs 135.84 crore for the quarter ended March 31, 2014. While, shares of Titan Company was trading firm after it reported 11.3% jump in its net profit to Rs.206 crore for the quarter ended March 31, 2014. Moreover, Gujarat Pipavav Ports was trading at Rs 95.65, up 7% from its previous close after it reported 114% jump in its net profit to Rs.77.06 crore for the quarter ended March 31, 2014.

On the global front, Asian shares fell to a one-month low and the safe-haven yen hovered just below a multi-month high against the dollar in early trade on Wednesday as the heightened possibility of Ukraine slipping into civil war dampened risk sentiment. US stocks closed lower, with AIG pulling financial shares lower after disappointing earnings and as a slide in Twitter took down other names in the technology and internet space. Back home, Allahabad Bank, Kajaria Ceramics, Lupin, Procter and Gamble Hygiene and Health Care and Syndicate Bank on account of March quarter earnings announcement.

The market breadth on BSE was positive, out of 1991 stocks traded, 1011 stocks advanced, while 868 stocks declined on the BSE.

The BSE Sensex is currently trading at 22459.74 down by 48.68 points or 0.22% after trading in a range of 22532.82 and 22455.49. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.55%, while Small cap index up by 0.41%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.45%, Capital Goods up by 0.82%, Healthcare up by 0.69%, Power up by 0.48% and PSU up by 0.31%. While, IT down by 0.68%, Teck down by 0.60%, Metal down by 0.48% and Bankex down by 0.19% were the losing indices on BSE.   

The top gainers on the Sensex were Sun Pharma up by 1.31%, BHEL up by 1.03%, Cipla up by 0.91%, L&T up by 0.67% and ONGC up by 0.49%. On the flip side, Bharti Airtel down by 1.35%, Wipro down by 1.28%, Hindalco down by 1.19%, HDFC down by 1.01% and Bajaj Auto down by 0.86%.

Meanwhile, expressing optimism on India's economic growth, the Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that Indian economy’s growth rate will pick up in the near future. The Governor added that Indian economy, which has been growing at a flat growth rate at around 5 percent over the past two fiscal years will witness beyond 5 percent growth soon.

Reiterating his views that long term economic growth is linked with the curbing inflation, Raghuram Rajan emphasized that stimulating growth and controlling inflation are not opposed to each other. The RBI had already said that prevailing high inflation in the country continue to pose challenge to economic growth over the medium to long term through impacting people savings. Only in case of low and stable inflation level, the monetary policy can contribute significantly to revive consumption and investment in the country.

The Reserve Bank of India (RBI) has raised lending rate three times since September’13 to tame price rise through cooling demand. Although tight monetary stance helped to quell some prices pressure, the apex bank’s move is adversely impacting the country’s economic growth. At present, Indian economy is struggling and its growth has slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The Central Statistics Office (CSO) has expected that Indian economy to grow at 4.9 percent in FY14.

The CNX Nifty is currently trading at 6,703.85 down by 11.45 points or 0.17% after trading in a range of 6,718.75 and 6,699.10. There were 26 stocks advancing against 24 declining on the index.

The top gainers of the Nifty were Lupin up by 1.24%, BPCL up by 1.18%, Sun Pharma up by 1.10%, HCL Tech up by 1.05% and BHEL up by 0.87%. On the flip side, Hindalco down by 1.48%, Wipro down by 1.36%, Bharti Airtel down by 1.24%, Ultratech Cement down by 1.13% and HDFC down by 1.07% were the major losers the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped 0.48%, Hang Seng slipped 1.14%, KLSE Composite contracted by 0.08%, Nikkei 225 tumbled by 2.47%, Straits Times declined 0.47%, Seoul Composite dipped by 0.79% and Taiwan Weighted was down by 0.27%. On the flip side, Jakarta Composite was up by 0.24%.