Benchmarks trade lower on monsoon concerns

Snapping their three days winning streak, Indian equity benchmarks have made a sluggish start and are trading below their crucial 25,400 (Sensex) and 7,600 (Nifty) levels as traders remained concerned about report of poor monsoons, as weather officials highlighted that this year’s monsoon rains have been deficient so far and the rainfall between June and September could be between 90 and 96% of the long-term average. Meanwhile, President Pranab Mukherjee has said that the current economic situation is extremely difficult and expressed the government's commitment to put India back on high growth path, while containing inflation and making tax regime non-adversarial.

On the global front, the US markets ended modestly higher in last session, though the trade remained subdued amid lack of any major economic announcements but traders took heart from the positive cues across the globe. Asian markets too were trading mostly in the green at this point of time with some of them nudging three-year highs on rising optimism over global growth prospects and a record-run on Wall Street, helping lift Treasury yields and the dollar.

Back home, on the sectoral front software, healthcare and technology witnessed the maximum gains in trade, while realty, metal and power remained the top losers on the BSE sectoral space. The broader indices too were reeling under selling pressure in early deals, while the market breadth on the BSE was negative; there were 822 shares on the gaining side against 1,243 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex opened at 25706.35; about 126 points lower compared to its previous closing of 25580.21, and has touched a high and a low of 25711.11 and 25347.33 respectively. The index is currently trading at 25381.44, down by 198.77 points or 0.78%. There were 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a weak start with 38.74% stocks advancing against 58.58% declines. Moreover, the broader indices too were reeling under pressure; the BSE Mid cap and Small cap indices down by 1.57% and 1.79% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.28%, Healthcare up by 1.15% and TECk up by 0.80% while Realty down by 4.07%, Metal down by 2.38%, Power down by 2.36%, Infrastructure down by 2.30% and PSU down by 2.04% was the top losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 1.79%, Sun Pharma up by 1.72%, Infosys up by 1.63%, Dr Reddys up by 1.38% and TCS up by 1.03%. On the flip side, Tata Power was down by 3.61%, Hindalco was down by 3.40%, SSLT was down by 3.27%, BHEL was down by 3.10% and Tata Steel was down by 2.44% were the top losers on the Sensex.

Meanwhile, concerned over the rising trade deficit with China, Prime Minister Narendra Modi has stated that India need to focus on imparting skills to its young population, expand the scale of projects it undertook and improve the speed of execution in order to compete with China. India’s trade deficit with China averaged at around $35 billion during the past three years. During January-April’ 2014, the total volume between China and India amounted to $ 21.98 billion out of which India exported $6.57 billion and imported $15.41 billion, representing a trade deficit of $8.84 billion.

Emphasizing the need to focus more on skill, scale and speed, Prime Minister has said that it has become imperative to take benefit of country’s favorable demography, as 65 percent of population was below 35 years of age. By adding further, Narendra Modi said that skill development such as teaching, nursing and paramedics need to be a priority area and good teachers are one of the biggest needs of society. Further, universities should be actively involved in research and analysis of the developmental process, to contribute significantly for policy-related decisions.

Narendra Modi cited the three colours of the national flag to express views on the development of key sectors for overall economic growth of the country. Beginning with green, Prime Minister said that India needs to bring about a second green revolution focusing on increased agro-productivity, agro technology, value addition and decentralization of warehousing. Further, a white revolution must focus on increasing milk productivity and developing a support system for ensuring cattle health. While, the saffron colour represents energy and India needs a saffron revolution which will focus on renewable energy sources such as solar energy to meet India's growing energy demand.  Prime Minister further added that in infrastructure the focus needs to shift from highways to i-ways and optical fibre networks.

The CNX Nifty opened at 7,679.05; about 25 points lower as compared to its previous closing of 7654.60, and has touched a high and a low of 7,683.20 and 7,579.30 respectively.

The index is currently trading at 7,591.35, down by 63.25 points or 0.83%. There were 11 stocks advancing against 39 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 2.05%, Tec Mahindra up by 1.82%, Wipro up by 1.74%, Infosys up by 1.58% and Lupin up by 1.51%. On the flip side, DLF down by 4.31%, Tata Power down by 4.04%, Hindalco down by 3.63%, SSLT down by 3.22% and Grasim down by 3.19% were the major losers on the index.

Asian equity indices were trading mostly in the green; Hang Seng gained 91.06 points or 0.39% to 23,208.53, KOSPI Index strengthened by 13.97 points or 0.70% to 2,004.01, Jakarta Composite climbed 40.30 points or 0.82% to 4,925.38, Shanghai Composite soared 8.53 points or 0.42% to 2,039.03 and FTSE Bursa Malaysia KLCI was up by 2.30 points or 0.12% to 1,865.99.

On the flip side, Nikkei 225 tumbled by 88.62 points or 0.59% to 15,035.38 and Straits Times was down by 12.28 points or 0.37% to 3,292.92.