Benchmarks surrender to selling pressure after flattish start

After making a flat but positive start, benchmark equity indices have now slipped into negative territory and were trading with slender loss, as investors turned cautious and booked profits at higher levels. Sentiment weakens further as Organisation for Economic Cooperation and Development saying that India, China and other major emerging economies are expected to see weak growth even as momentum remains stable in the developed world. However, gains in realty, metal and consumer durables stocks have restrained the market to extend losses.  Indices ended at record closing highs yesterday for the third straight trading session as exit polls showed that the BJP-led NDA is set to form a stable government and set the reforms process in motion to stimulate growth. However, traders turned cautious as any disappointment will see the markets react sharply on the downside on May 16 and over the next few months as well. Meanwhile, State-run banks on watch after a committee appointed by Reserve Bank of India proposed on Tuesday the Indian government should cut its stakes in state banks to below 50 percent.

On the global front, US stocks has ended flat as the benchmark S&P 500 retreated after climbing over the 1,900 mark, while an index of European shares ended at a six-year high on solid corporate earnings and bets of more European Central Bank stimulus. Back home, Bajaj Finserv, Asian Paints, ICRA, Mphasis, Tech Mahindra, Usher Agro and Tata Steel will be in focus on account of March quarter earnings announcement. The market breadth on BSE was positive, out of 2,186 stocks traded, 1,216 stocks advanced, while 869 stocks declined on the BSE.

The BSE Sensex is currently trading at 23826.60 down by 44.63 points or 0.19% after trading in a range of 23,964.67 and 23,800.64. 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 0.72%, while Small cap index up by 0.95%.

The top gaining sectoral indices on the BSE were, Realty up by 2.18%, Metal up by 1.53%, Consumer Durables up by 0.66%, Healthcare up by 0.32% and Power up by 0.25%, while Oil & Gas down by 0.67%, Capital Goods down by 0.58%, IT down by 0.37%, Auto down by 0.32% and Teck down by 0.21% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 3.68%, Bajaj Auto up by 2.12%, Hero MotoCorp up by 1.73%, Hindalco up by 1.09% and NTPC up by 0.94%. On the flip side, Mahindra & Mahindra was down by 2.49%, BHEL was down by 1.97%, Dr Reddys Lab was down by 1.90%, ONGC was down by 1.63% and Maruti Suzuki down by 1.25% were the top losers on the Sensex.

Meanwhile, The Organisation for Economic Cooperation and Development (OECD) in its latest report has stated that major emerging economies including India are expected to witness weak growth even as momentum remains stable in the developed world. The agencies’ composite leading indicators (CLIs), designed to anticipate turning points in economic activity, point to growth below trend in Brazil, China, India and losing momentum in Russia.

India's CLI stood at 97.7 in March, unchanged from the preceding month. The CLI for China and Brazil declined to 98.8 and 98.4 in March from 98.9 and 98.5 in the previous month respectively. While for Russia, CLI fell to 99.2 in March from 99.4 in February. Among developed economies, the CLI of the US remain unchanged at 100.4 in March, whereas CLI in Japan stood at 101.0 in the reported month as compared to 101.1 in the previous month. The CLI indicated positive change in momentum in Euro area with the reading increasing to 101.2 in March from 101.1 in the February.

Presently, Indian economy is struggling with slowdown and the factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting economy’s growth. Indian economy’s growth slowed down to 4.6 percent during the first three quarter of FY14 and is likely to remain at sub-5% level in FY14

The CNX Nifty is currently trading at 7,104.60 down by 4.15 points or 0.06% after trading in a range of 7,142.25 and 7,096.15. There were 30 stocks advancing against 20 declining on the index.

The top gainers of the Nifty were Tata Steel up by 3.75%, Jindal Steel up by 3.38%, Bajaj-Auto up by 2.45%, PNB up by 2.44% and Bank of Baroda up by 2.29%. On the flip side, M&M down by 2.75%, BHEL down by 2.01%, ONGC down by 1.70%, Dr. Reddy's Laboratories down by 1.67% and HCL Tech down by 1.22% were the major losers on the index.

Most of Asian equity indices were trading in green; Hang Seng increased 0.88%, Jakarta Composite added 0.91%, KLSE Composite gained 0.47%, Straits Times soared 1.1%, Seoul Composite jumped by 1.00% and Taiwan Weighted was up by 0.44%. On the flip side, Shanghai Composite declined 0.08% and Nikkei 225 was down by 0.25%.