Markets continue to trade in negative territory

Indian equity benchmarks continued to trade in red in afternoon session as investors continue profit booking in cyclical stocks after sharp gains recently, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in consumer durables, realty and power stocks. Though most of the sectoral indices were trading in green, sharp selling witnessed in capital goods and banking stocks gripped the major indices in negative territory. Weak global cues and depreciation in rupee also dented the investors’ sentiments. However, NCAER's latest report, which noted that the Business Confidence Index (BCI) in March quarter rose by about 3.8 percent from the previous quarter to 127 points provided support to the domestic markers. Consumer durables was the top gainer on BSE up by around 0.82% whereas capital goods index was trading down by 0.96%. Broader indices continue to outperform the major indices as investors search for stocks that are likely to benefit from a turnaround in the economy post the new regime at the Centre.

Gati has rallied around 7% to Rs 103 after Macquarie Bank, a unit of Australia's Macquarie Group, acquired a stake of over 1% in the company for Rs 10 crore through an open market purchase. VIP Industries has soared around 7% at Rs 114 after the company's consolidated net profit rose 300% in the fourth quarter ended March 31, 2014. On the other hand, Punj Lloyd was trading down around 9% to Rs 38.85 after reporting a consolidated net loss of Rs 382 crore for Q4FY14 on the back of a decline in income and deferment of claim settlement on some overseas projects.

On global front, major Asian equity indices were trading in red with Straits Times down by 0.24% and Nikkei 225 down by 0.28%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,200 and 24,300 levels respectively. The market breadth on BSE was negative, out of 1,480 stocks traded, 1,141 stocks advanced, while 296 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,333.37 down by 43.51 points or 0.18% after trading in a range of 24,419.54 and 24,278.39. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index up by 1.50%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.82%, Realtly up by 0.56%, Power up by 0.55%, Auto up by 0.53% and IT up by 0.29%. On the flip side, Capital Goods down by 0.96%, Bankex down by 0.35% and Healthcare down by 0.24% were the losing indices on BSE.   

The top gainers on the Sensex were Bajaj Auto up by 3.41%, Hindalco Inds up by 2.99%, NTPC up by 2.03%, SSLT up by 0.94% and Coal India up by 0.67%. On the flip side, Sun Pharma down by 1.59%, Dr Reddy’s Lab down by 1.46%, BHEL down by 1.39%, L&T down by 1.36% and Hero Motocorp down by 1.31%.

Meanwhile, Economic think-tank the National Council of Applied Economic Research (NCAER), in its latest report, has noted that the business confidence in last quarter of 2013-14 improved further on expectations of a new electoral mandate that buoyant the overall sentiments. The Business Confidence Index (BCI) in March quarter rose by about 3.8 percent from the previous quarter to 127 points, showing a second successive improvement in business sentiments. In line with the BCI, the Political Confidence Index (PCI) also showed improvement to 136.6 points in April 2014 from 112.9 points in January 2014.

The NCAER’s report further highlighted that the macroeconomic and sectoral level improvements also helped to boost the business sentiments in the country. Moderating inflation rate, shrinking current account deficit and appreciation in rupee value against the dollar have all aided positive sentiments. During FY14, the CAD is likely to improve at around 2% of GDP level as against the record high at 4.8% of GDP in FY13 on the back of improved trade deficit figure. The expectation of improvement financial position of corporates was the main factor behind the increase in overall confidence, the report added. However, the lower ratings on investment climate remain the area of concern in the present survey.

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 7,258.05 down by 17.45 points or 0.24% after trading in a range of 7,287.15 and 7,246.00. There were 16 stocks advancing against 34 declining on the index.

The top gainers of the Nifty were Bajaj Auto up by 3.79%, Mcdowell up by 2.86%, Hindalco up by 2.56%, NTPC up by 2.88% and NMDC up by 2.27%. On the flip side, Ultratech Cement down by 3.13%, Sun Pharma down by 1.67%, L&T down by 1.54%, Kotak Bank down by 1.52% and BHEL down by 1.48% were the major losers on the index.

Asian equity indices were trading in green; Straits Times down by 0.24% to 3,259.05, Nikkei 225 down by 0.28% to 14,035.72, Jakarta Index down by 2.27% to 4,882.15 and Taiwan Weighted down by 0.29% to 8,862.42. While, Hang Seng up by 0.03% to 22,841.14 and Shanghai Composite up by 0.36% to 2,015.15