Benchmarks add losses; IT, TECK drag

Indian equity benchmarks enlarged losses to continue their weak trade in the late afternoon session in absence of any positive upside trigger. The sentiments were on pessimistic mood after data showed that foreign funds were net sellers of Indian stocks on Wednesday i.e. May 28, 2014. Traders were seen piling up positions in HealthCare, FMCG and Auto stocks, while selling was witnessed in IT, TECK and Oil & Gas sector stocks. In scrip specific development, Infosys was trading weak after its President and Board Member B.G. Srinivas, seen by some investors as a candidate to take over as CEO, resigned, becoming the latest senior manager to leave the company. Unitech was trading in red after posting a wider-than-expected Rs 51.55 crore loss in the January-March quarter. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. May 2014 series to next month i.e. June 2014 series. The near month May 2014 derivatives contract will expire today i.e. May 29, 2014.

On the global front, the Asian markets were trading on a mixed note, while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,300 and 24,400 levels respectively. The market breadth on BSE was negative in the ratio of 1365:1455 while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 24374.92, down by 181.17 points or 0.74% after trading in a range of 24,528.20 and 24,327.79. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap was up by 0.16% while Small cap was down by 0.04%.

The gaining sectoral indices on the BSE were HealthCare up by 0.41%, FMCG up by 0.07% and Auto up by 0.06% while, Information Technology (IT) down by 2.69%, TECK down by 2.14%, Oil & Gas down by 0.82%, Metal down by 0.80% and Infrastructure Index down by 0.66% were the losing indices on BSE.   

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.90%, NTPC up by 1.16%, M&M up by 1.09%, SBI up by 0.85% and TCS up by 0.78%.

On the flip side, Infosys down by 7.13%, Wipro down by 2.23%, Coal India down by 1.41%, HDFC Bank down by 1.38% and SSLT down by 1.23% were the top losers on the index.

Meanwhile, industry chamber Assocham’s has stated that delay in key central sector projects have led to steep cost over-runs during the previous fiscal year. Assocham, in its latest report, has noted that the cost over-runs, which had been worked out at Rs 94,800 crore in about 285 Central projects till March 2013 would easily exceed Rs 1 lakh crore by March 2014.

According to Assocham's report, railways sector is estimated to be most affected with maximum escalation in costs which were up nearly three times to Rs 73,500 crore by March 2014 from the original estimates of Rs. 27,900 crore in March 2013. Among other sectors, petroleum, power, and steel have also witnessed steep rise in costs due to delays. The industry body further said that the new government should take immediate measures to monitor and revive investment cycle in these central sector projects, report added.

The infrastructure development is a most critical prerequisite to boost the economic growth. To boost infrastructure development in the country, India's Government has proposed an investment of $1 trillion for the sector during the 12th Five Year Plan, with 50 percent of the funds coming from the private sector. At present, Indian infrastructure sector is under pressure and the factors like slow reforms, worse land acquisition procedure and delay in environment and forest clearance have been impeding the business sentiments in the country which in turn adversely impacting investments in the sector.

The CNX Nifty is currently trading at 7,287.80, down by 41.85 points or 0.57% after trading in a range of 7,325.40 and 7,272.30. There were 27 stocks advancing against 23 declining on the index.

The top gainers of the Nifty were Ultratech Cement up by 3.05%, Dr. Reddy’s Lab up by 1.76%, Bank of Baroda up by 1.65%, PNB up by 1.58% and SBI up by 1.17%.

On the flip side, Infosys down by 2.63%, Wipro down by 2.58%, Cairn India down by 1.70%, SSLT down by 1.59% and Jindal Steel down by 1.58% were the major losers on the index.

Asian equity indices were trading on a mixed note; Nikkei 225 up by 0.07%, Jakarta Index advanced 0.44%, Straits Times surged 0.92%. On the other hand, Hang Seng lost 0.30%, Shanghai Composite down by 0.47% and Taiwan Weighted down by 0.14% were the losers amongst Asian pack.

The European markets were trading mostly in red, with France’s CAC 40 was down by 0.20% and Germany’s DAX down by 0.06%, while UK’s FTSE 100 gained 0.34%.