Markets trim losses; still continue to trade in negative territory

Local barometer gauges despite trimming some of its losses, continued trading into negative territory on the back of cautious start of European markets, which wobbled on the eve of interest rate decisions in Britain and the euro-zone. However, recovery in Auto and Information Technology aided benchmarks in reducing its early losses. Both, Sensex and Nifty despite slender loss of over one tenth of a percent, were holding above the crucial 24,750 and 7,400 levels respectively. Meanwhile, broader indices were shinning in trade and outperforming larger peers with gains of over 0.90%.

On BSE, Metal, Consumer Durable and Infrastructure counters were the prominent gainers of the session, while banking and Fast Moving Consumer Goods space were the only losers. In non-sectoral gauge activity, shares in fertilizer companies, Chambal Fertilisers and Chemicals and National Fertilizers were surging on hopes that new government will soon clear its 2013/14 outstanding subsidy payments for the sector. Additionally, cement stocks, Andhra Cement, India Cements, Heidelberg Cements and Dalmia Bharat were rallying on price hikes ranging from 3-30 percent across most regions. On the flip side, Sugar stocks, which were up on hopes that the Modi-led government would help revive the industry by encouraging ethanol blending in petrol and also hike import duty on the commodity to support local prices, were down on profit-booking. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1914:827; while 92 shares remained unchanged.

The BSE Sensex is currently trading at 24775.22 down by 30.61 points or 0.12% after trading in a range of 24831.79 and 24644.88. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading up; the BSE Mid cap index was up by 0.90%, while Small cap index up by 1.36%.

The top gaining sectoral indices on the BSE were Metal up by 1.95%, Consumer Durables up by 1.12%, Infrastructure and Power up by 0.83% each and Capital Goods up by 0.61%. While, Bankex down by 0.72% and FMCG down by 0.10% were the losing indices on BSE.   

The top gainers on the Sensex were SSLT up by 5.17%, Hindalco Inds up by 3.05%, Tata Steel up by 2.03%, Tata Motors up by 1.91% and Wipro up by 1.69%. On the flip side, HDFC Bank down by 1.87%, ONGC down by 1.17%, ICICI Bank down by 1.16%, Cipla down by 1.08% and ITC down by 1.00% were the top losers on the BSE.

Meanwhile, In order to make Indian retail market more competitive, the government is likely to ease FDI norms in e-commerce in July to allow foreign online retailers such as Amazon.com Inc to sell their own products in Indian retail market. 

The government is of the view that a more robust online retail sector would spur manufacturing and consumption, helping revive an Indian economy which has been growing a sub 5 percent over the past two fiscal years. The move will allow global onlilne retailers to partner with local manufacturers to source products not carried by other sellers on the marketplace, giving Indian consumers unique and wider choices at lower prices. Further, this initiative is likely to help small traders to grow their business, expand and reach out to a larger market.

Present market size of Indian retail sector stands at around $500 billion. E-commerce is expected to contribute around up to 4 percent to India’s economy by 2020 from under 1 percent now. On the other hand, retailers body CAIT is opposing the decision, saying that the government should not allow FDI in e-commerce retail as it would grant back-door entry to foreign players in the multi-brand retail. Further CAIT stated that permitting FDI in e-commerce retailing would be detrimental to the interests of more than six crore small shop-owners across the country. Currently, India's FDI policy restricts e-commerce companies from offering services directly to retail consumers. Though, India has allowed 100 percent FDI in business-to-business (B2B) e-commerce in the country, foreign investment is not allowed in retail trading. Global players like Amazon and eBay operate in India through the marketplace model but do not have their own warehouses or retail operations.

The CNX Nifty is currently trading at 7,415.00 down by 12.75 points or 0.17% after trading in a range of 7,418.15 and 7,360.50. There were 32 stocks advancing against 17 declining on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were SSLT up by 5.11%, Cairn India up by 3.90%, BPCL up by 3.26%, Hindalco Inds up by 2.74% and Jindal Steel up by 2.54%. On the flip side, HDFC Bank down by 1.68%, Cipla down by 1.23%, ITC down by 0.98%, ONGC down by 0.91% and IndusInd bank down by0.86% were the major losers on the index.

Asian equity indices were trading mixed; Taiwan Weighted up by 0.23%, Shanghai Composite up by 0.69% and Nikkei 225 up by 0.08%. While, Hang Seng down by 0.09%, Jakarta Stock Index down by 0.22% and Straits Times down by 0.09% were the losers on the index.  

European markets got off to a cautious start; with Germany’s DAX rising by 0.07%, France’s CAC 40  down by 0.06% and United Kingdom’s FTSE 100 sliding by 0.26%.