Markets enlarge losses; Sensex below 25450 mark

Indian equity benchmarks enlarged their losses in the late morning session as traders booked profits, while there was some cautiousness ahead of the consumer price index (CPI) inflation data for May and the Index of Industrial Production (IIP) data for April due on June 12, 2014. Sentiment on the street weakened further on concern about the report of poor monsoon, as the weather officials have said 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. Languishing in red, both Sensex and Nifty were trading below the crucial 25,450 and 7,650 levels respectively, with losses of over half a percent.  Meanwhile, broader indices too succumbing to selling pressure were trading with loss in the range of 1.12-1.15%.In scrip specific development, shares of Suzlon Energy surged on getting upgrade from foreign research houses. BEML was trading higher, extending its 17% rally in past three trading sessions, on hopes government will introduce new policies and liberalised foreign direct investment (FDI) in the defence sector.

On the global front, Asian markets were trading higher after China’s central bank announced new steps to increase lending by reducing the required reserve ratio, the amount of cash lenders must hold, by 0.5%. Moreover, the Dow and S&P 500 ended at record highs again on Monday as more deal news raised enthusiasm for stocks. Back home, traders were seen piling up positions in Healthcare, IT and Teck stocks, while selling was witnessed in Realty, Metal and Power sector stocks. The market breadth on BSE was negative, out of 2477 stocks traded, 1059 stocks advanced, while 1356 stocks declined on the BSE.

The BSE Sensex is currently trading at 25436.17 down by 144.04 points or 0.56% after trading in a range of 25711.11 and 25347.33. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.15%, while Small cap index down by 1.12%.

The gaining sectoral indices on the BSE were, Healthcare up by 1.73%, IT up by 1.35% and Teck up by 0.99%. While, Realty down by 3.69%, Metal down by 2.09%, Power down by 2.08%, India Infrastructure Index down by 1.84% and PSU down by 1.70% were the losing indices on BSE.   

The top gainers on the Sensex were Wipro up by 2.37%, Sun Pharma up by 1.96%, Dr Reddys Lab up by 1.59%, Cipla up by 1.55% and Bharti Airtel up by 1.47%. On the flip side, SSLT down by 3.76%, BHEL down by 3.67%, Tata Power down by 2.81%, Hindalco down by 2.72% and Tata Steel down by 2.61%.

Meanwhile, the NDA government led by Prime Minister Narendra Modi on Monday officially unveiled its ambitious roadmap to revive the struggling economy, which was presented by President Pranab Mukherjee in his address to the joint sitting of both Houses of Parliament. The speech outlined the priorities of the new government, which included extensive use of technology, policy predictability, measures to curb the menace of communal violence, reining in corruption and inflation and encouraging investment, both domestic and foreign.

On business front, the president, while underscoring the government’s commitment for liberalized Foreign Direct Investment (FDI), which would help in the creation of job and asset generation, added that the government would introduce long-pending Goods and Services Tax that will help in creating a conducive environment for investment.

He also asserted that government’s top priority to combat food inflation would end the rural-urban divide and also reverse the trend of hopelessness among farmers that leads to suicides. Further, making note of possible irregular monsoons due to ELNino that might have an impact on food inflation this year, Mukherjee assured that contingency plans were being prepared to tackle the situation.

On the foreign policy, the President underscored that while the government was committed to work towards building a peaceful, stable and economically inter-linked neighbor-hood, it would not hesitated from raising issues of concern at a bilateral level.

President further highlighted that the government will carry out reforms in defence procurement to increase efficiency and economy and encourage domestic industry, including the private sector, to have a larger share in design and production of defence equipment. While, for healthcare and sanitation the government would formulate a new Health Policy and National Health Assurance Mission, besides promoting yoga in AYUSH and establishment of AIIMS like institutions in all the states, adding IITs and IIMs will also be set up in every state.

The CNX Nifty is currently trading at 7,604.65 down by 49.95 points or 0.65% after trading in a range of 7,683.20 and 7,579.30. There were 13 stocks advancing against 37 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 2.26%, Wipro up by 2.13%, Tech Mahindra up by 1.96%, Lupin up by 1.73% and Dr. Reddy's Laboratories up by 1.64%. On the flip side, DLF down by 4.33%, SSLT down by 3.88%, BHEL down by 3.59%, Hindalco down by 3.21% and Ambuja Cements down by 3.08% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng gained 0.35%, KOSPI Index strengthened by 0.46%, Jakarta Composite climbed 0.86%, Shanghai Composite soared 0.46% and FTSE Bursa Malaysia KLCI was up by 0.09%.

On the flip side, Nikkei 225 tumbled by 0.77% and Straits Times was down by 0.32%.