Markets slip further near day’s low; broader indices continue to outperform

Continuing to show signs of fatigue after previous few sessions’ ferocious bull-run, Indian equity markets languishing at day’s low on profit-booking, were trading with cut of over quarter of a percent, below the crucial 23,800 and 7,100 levels respectively. Cautiousness which has gripped the street ahead of final results of elections on May 16 is likely to limit upside hereon, with investors hesitating to open any fresh bets and rather adopting a ‘Wait and Watch’ approach ahead of the crucial event. However, in the dismal session of trade, broader indices outperforming frontline indices were trading with gains of over 3 /4 of a percent.

On the global front, Asian pacific shares flirted with three-week highs on Wednesday on heightened speculation of more European Central Bank stimulus next month. However, investors continued to warily monitor the ongoing crisis in the Ukraine, where pro-Russian separatists ambushed Ukrainian troops on Tuesday, killing seven.

Closer home, with majority of the sectoral indices trading into positive terrain, stocks from Realty, Metal and FMCG counters were showing resilience. On the flip side, stocks from Capital Goods, Oil and Gas and Information Technology counters were the weak spells of trade. Meanwhile, state-run banks gained after a committee appointed by Reserve Bank of India (RBI) in its latest report proposed that the government to cut its holding in public sector banks to below 50 percent. State Bank of India, Oriental Bank of, Punjab National Bank (PNB) and Canara Bank surged in the range of 1%-2%. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1401:1214; while 120 shares remained unchanged.

The BSE Sensex is currently trading at 23787.20, down by 84.03 points or 0.35% after trading in a range of 23964.67 and 23753.36. 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 0.86%, while Small cap index up by 1.17%.

The gaining sectoral indices on the BSE were Realty up by 3.34%, Metal up by 1.49%, FMCG up by 0.56%, Consumer Durables up by 0.47%, and PSU up by 0.46%. On the flip side, Capital Goods down by 0.90%, Oil and Gas down by 0.78%, IT down by 0.36% and Auto down by 0.29% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 3.19%, Bajaj Auto up by 2.22%, Hindalco Inds up by 1.90%, ITC up by 1.14% and Cipla up by 1.11%. On the flip side,  Dr Reddy’s Lab down by 2.42%,  M&M down by 2.32%, BHEL down by 2.29%, L&T down by 1.39% and Reliance Industries down by 1.16% were the top losers on the index.

Meanwhile, while the economy and the government may have found solace in rupee’s appreciation, the same has turned out to be a cause for concern for exporters, as per engineering exporters Engineering Export Promotion Council (EEPC). According to the nodal agency, strengthening of rupee sub 60 levels is certainly not good news for the exporters as this will dent competitiveness of Indian products in a tough global market, where Chinese have maintained their competitive edge by calibrating their currency.

In view of this, EEPC has requested Reserve Bank of India (RBI) to buy dollars and build reserves to ensure that domestic currency does not appreciate too much. This is perhaps one of the reasons as to why the Indian currency has not appreciated beyond the 59/$ mark.

Engineering, which contributes the highest to the country's total outbound shipments, exports recorded a growth of 21.25% at $ 5.72 billion during the first month of the current fiscal.

The CNX Nifty is currently trading at 7,089.80, down by 18.95 points or 0.27% after trading in a range of 7,142.25 and 7,085.45. There were 25 stocks advancing against 25 declining on the index.

The top gainers of the Nifty were Bank of Baroda up by 4.46%, DLF up by 2.89%, Tata Steel up by 2.86%, PNB up by 2.60% and Jindal Steel up by 2.46%. On the flip side, M&M down by 3.27%, BHEL down by 2.63%, Dr Reddy’s Lab down by 2.56%, HCL Tech down by 2.24% and Reliance down by 1.65% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng spurted 0.96%, Taiwan Weighted advanced 0.65%, Straits Times surged 1.13% and Jakarta Composite gained 0.93%. While, Shanghai Composite down by 0.14% were the top losers on the index.

European shares got off to a mostly positive start; with France’s CAC 40 index gaining by 0.25%, Germany’s DAX rising by 0.54% and United Kingdom’s FTSE 100 index surging 0.13%.