Benchmarks trade flat with negative bias in early deals

Indian equity benchmarks are trading flat with negative bias in early deals on Wednesday, tracking weak global cues. Sentiments also remained dampened on report which showed that India has slipped to its lowest position in over a decade in the foreign direct investment confidence index. Traders also remained on sidelines ahead of Finance Minister’s pre-Budget talks with apex industry chambers and trade sector representatives on Friday. However, losses remained capped on report that foreign institutional investors (FIIs) bought shares worth a net Rs 575.09 crore on June 3, 2014, as per provisional data from the stock exchanges.

Global cues remained somber as the US markets ended modestly lower after experiencing a relatively lackluster performance throughout the session. However, the downside were capped by a report showing a bigger than expected increase in US factory orders. Asian markets too were trading mostly in the red at this point of time with investors awaiting a report on US jobs and a decision from the European Central Bank on monetary policy.

Back home, on the sectoral front, consumer durables, realty and metals witnessed the maximum gains, while software, technology and fast moving consumer goods remained the few losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1316 shares on the gaining side against 498 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 24909.03; about 45 points higher compared to its previous closing of 24858.59, and has touched a high and a low of 24925.90 and 24805.17 respectively. The index is currently trading at 24836.55, up by 22.04 points or 0.09%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a strong start with 70.45% stocks advancing against 26.66% declines. However, the broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices up by 0.96% and 0.97% respectively. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.56%, Realty up by 0.94%, Metal up by 0.78%, Capital Goods up by 0.76% and Infrastructure up by 0.72% while, IT down by 1.20%, TECk down by 0.84% and FMCG down by 0.36% were the few losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 2.38%, Tata Steel up by 2.30%, Bajaj Auto up by 2.27%, Tata Motors up by 1.56% and BHEL up by 1.44%. On the flip side, TCS was down by 1.92%, M&M was down by 1.17%, Wipro was down by 1.07%, ITC was down by 0.88% and ONGC was down by 0.84% were the top losers on the Sensex.

Meanwhile, the government has slashed the import tariff on gold to $408 per 10 gram from $424 and silver to $617 per kg from $650 per kg, in line with global rates of the precious metals, which could lead to some softening in the prices. Tariff value or the base price is set to determine the customs duty on the precious metal and to prevent under invoicing. The government revises import tariff value on a fortnightly basis taking into account the volatility in global metal prices.

During the recent months, global gold prices have been declining as positive US economic data backed the latest Federal Reserve’s move to keep on reducing monetary stimulus which has dimmed the precious metal's appeal. Taking global cues, domestic gold rates in the national capital Delhi declined to 11-month low at Rs 27,400 per 10 grams.

Gold is the second largest import item for India after crude oil. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Gold and silver imports fell by 40.02% to $33.46 billion in FY14 due to these stern Government’s norms. Low gold imports also helped India to contain current account deficit (CAD) at 1.7 percent of GDP or $32.4 billion in FY 14 as compared to $87.8 billion, or 4.7 percent of GDP in FY13.

The CNX Nifty opened at 7,417.55; about 2 points higher as compared to its previous closing of 7,415.85, and has touched a high and a low of 7,433.30 and 7,399.10 respectively.

The index is currently trading at 7,415.75, down by 0.10 points. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were NMDC up by 2.74%, Bajaj Auto up by 2.34%, Hindalco up by 2.29%, Tata Steel up by 2.22% and Grasim up by 1.85%. On the flip side, HCL Tech down by 1.51%, TCS down by 1.34%, M&M down by 1.24%, Wipro down by 0.96% and Coal India down by 0.93% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped by 19.08 points or 0.94% to 2,019.22, Hang Seng declined 129.61 points or 0.56% to 23,161.43, Jakarta Composite slipped by 11.97 points or 0.24% to 4,930.19, KLSE Composite tumbled 7.76 points or 0.41% to 1,864.79, Straits Times was down by 14.71 points or 0.45% to 3,281.96. On the flip side, Nikkei 225 soared 36.54 points or 0.24% to 15,070.79 and Taiwan Weighted was up by 9.35 points or 0.10% to 9,132.81.

South Korea market remained shut for the trade today for regional elections in that country.