Markets off day’s low; continue to languish into negative territory

Despite being off the day’s low, local equity markets continued to languish into negative territory amidst bouts of selling pressure witnessed since morning deals after Narendra Modi named his cabinet, which was seen having potential for policy conflict between ministers wanting faster economic growth and the Reserve Bank of India, which wants to tame inflation.  Off day’s low, both Sensex and Nifty were trading above the psychological 24,550 and 7,300 levels respectively, with loss of close to 3 /4 of a percent.

On the global front, Asian stocks eased slightly in a timid session on Tuesday, while the euro steadied but remained vulnerable after overnight comments from the European Central Bank chief heightened expectations of easing steps in the euro zone.

Closer home, stocks from Information Technology, Technology and Healthcare counters were restricting bourses’ losses, while those from Oil & Gas, Power and Realty counters were the adding to the weak undertone of the markets. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1731:947; while 100 shares remained unchanged.

The BSE Sensex is currently trading at 24534.42 down by 182.46 points or 0.74% after trading in a range of 24,777.31 and 24,422.33. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.10%, while Small cap index down by 1.21%.

The few gaining sectoral indices on the BSE were IT up by 0.58%, Teck up by 0.28% and Healthcare up by 0.28%. While, Oil and Gas down by 2.35%, Power down by 2.31%, Realty down by 2.08%, Metal down by 1.27% and Auto down by 1.16% were the top losing indices on BSE.   

The top gainers on the Sensex were Infosys up by 1.88%, Wipro up by 1.24%, Bajaj Auto up by 1.22%, L&T up by 1.14% and HDFC Bank up by 0.90%. On the flip side, Gail India down by 6.43%, BHEL down by 4.63%, M&M down by 3.29%, ONGC down by 2.74% and SSTL down by 2.54%.

Meanwhile, newly-appointed Finance Minister Arun Jaitley, taking over the post at a time when India’s economic growth has a hit a decade low sub 5% levels, underscored his three priorities, including, fiscal consolidation, curbing inflation and balancing act on managing inflation without hurting growth. While expressing his gratitude to the Prime Minister, Jaitley highlighted that mandate of government had an inbuilt hope and change of the government would send out a strong signal to global community, who for some time now have preferred being on sidelines amidst political uncertainty.

Jaitley, a top corporate lawyer, who would be handling both the finance and defence ministry in the new administration of Prime Minister Narendra Modi, would be inheriting an economy that is growing at snail's pace, struggling with higher interest rates, high inflation, high fiscal deficit and is on the verge of a sovereign downgrade by ratings agencies.

Also, the newly appointed minister assured of expediting the decision making processes at a time when investment cycle has stalled and many key reforms have been shelved due to lack of political consensus. The country's finances continue to be precarious and Jaitley will have to walk a tightrope between growth and cutting deficit.

The CNX Nifty is currently trading at 7,307.85 down by 51.20 points or 0.70% after trading in a range of 7,372.95 and 7,274.75. There were 19 stocks advancing against 31 declining on the index.

The top gainers of the Nifty were Infosys up by 1.79%, Jindal Steel up by 1.28%, Bajaj Auto up by 1.14%, Ultratech Cement up by 1.06% and HDFC Bank up by 1.02%. On the flip side, Gail India down by 6.42%, BHEL down by 4.77%, M&M down by 3.15%, Ambuja Cement down by 2.83% and ONGC down by 2.76% were the major losers on the index.

Asian equity indices were trading mostly lower; Shanghai Composite down by 0.34% to 2,034.57, Hang Seng down by 0.13% to 22,933.32, Jakarta Index down by 0.18% to 4,963.92, Kospi down by 0.63% to 1,997.63 and Straits Times down by 0.18% to 3,276.84. While Nikkei 225 up by 0.23% to 14,636.52, Taiwan Weighted up by 0.21% to 9,055.29 and KLSE Composite up by 0.17% to 1,865.94.