Weak global cues drag benchmarks lower in early deals

Indian equity benchmarks have made a flat start and slipped into negative terrain as investors continued profit booking in cyclicals after sharp gains recently. Sentiments also remained cautious tailing weakness in the global markets. Overnight, the US stocks ended lower on talks that the Federal Reserve would hike policy rates sooner-than-expected and weak earnings from retailers. Sentiments also remained down due to disappointing quarterly results from retailers. Asian shares were trading mixed at this point of time. The Bank of Japan has kept its key policy rates unchanged.

Back home, there is some positive news as well, National Council of Applied Economic Research (NCAER) in its latest release has said that the business confidence in last quarter of 2013-14 improved further on expectations of a new electoral mandate that influenced the overall sentiments. The BCI in March quarter rose by about 3.8 per cent from the previous quarter to 127 points. Meanwhile, foreign institutional investors (FIIs) sold shares worth a net Rs 104.53 crore on May 20, 2014, as per provisional data from the stock exchanges.

On the sectoral front, consumer durables, realty and power witnessed the maximum gain in trade, while metal, healthcare and banking remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1105 shares on the gaining side against 282 shares on the losing side while 36 shares remain unchanged.

The BSE Sensex is currently trading at 24384.62, up by 7.74 points or 0.03% after trading in a range of 24419.54 and 24329.53. There were 18 stocks advancing against 12 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.02% and Small cap index gained 1.09%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.44%, Realty up by 0.92%, Power up by 0.70%, Auto up by 0.66% and Auto up by 0.66%, while Metal down by 0.60%, Health Care down by 0.26%, Bankex down by 0.09% and Capital Goods down by 0.04% were the top losers.

The top gainers on the Sensex were Bajaj Auto up by 2.60%, RIL up by 1.05%, NTPC up by 0.81%, Infosys up by 0.54% and Mahindra & Mahindra up by 0.20%. On the flip side, SSLT was down by  1.83%, Coal India was down by 1.83%, Tata Power was down by 1.69% , L&T was down by 1.54% and BHEL was down by 1.48%  were the losers on the Sensex.

Meanwhile, overseas direct investments by Indian companies rose to $5.58 billion in April from $5.23 billion in the previous month. However, the investment was much lower from $15.24 billion during the same month of previous year. The investments made by domestic corporate include equity, debt and bank guarantees. 

Total foreign direct investments from India in April included $1.15 billion in equity, $268.16 million in loans and $4.16 billion were through issuance of guarantees. Telecom major Bharti Airtel, Elder Pharmaceuticals, Haldia Coke and Serum Institute were among the major companies that made high investment in foreign markets in the month.

Elder Pharmaceuticals had raised $1.3 billion in the form of loans in its wholly owned subsidiary in the United Arab Emirates. Bharti Airtel issued guarantees of $2.11 billion and $55 million in its joint venture and a wholly-owned unit in the Netherlands and Singapore respectively. Among others, Haldia Coke and Chemicals had overseas investment of $2.14 billion by way of raising loans in its wholly owned unit in the US. While Serum Institute of India raised guarantees of $71.96 million in the company's wholly owned subsidiary in the Netherlands. Furthermore, Alok Industries had garnered $247.61 million in three different tranches in a mix of loans and guarantees.

The CNX Nifty is currently trading at 7,253.45 down by 22.05 points or 0.30% after trading in a range of 7,287.15 and 7,246.00. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Bajaj-Auto up by 2.58%, Asian Paint up by 2.34%, HCL Tech up by 1.80%, NTPC up by 1.02% and MC Dowell-N up by 1.01%. On the flip side, SSLT down by 3.42%, NMDC down by 1.88%, Ultra Cement down by 1.85% L&T down by 1.83% and Tata Power down by 1.79% were the top losers on the index.

Most of Asian markets were trading in red; Hang Seng slipped by 20.47 points or 0.09% to 22,814.21, Jakarta Composite declined 12.24 points or 0.25% to 4,883.72, KLSE Composite decreased by 4.06 points or 0.22% to 1,877.10, Nikkei 225 tumbled by 100.16 points or 0.71% to 13,975.09, Straits Times crumbled 6.15 points or 0.19% to 3,259.32, Seoul Composite dipped by 5.05 points or 0.25% to 2,006.21 and Taiwan Weighted was down by 8.53 points or 0.10% to 8,879.26.

On the flip side, Shanghai Composite was up by 2.84 points or 0.14% to 2,010.96.