Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in late morning session as funds and retail investors indulged in reducing positions on weak Asian cues amid fears over the growing crisis in Iraq. Sentiment on the street weakened further as the rupee weakened to 60 to a dollar in morning deals, its lowest in more than a month. Besides, a cautious approach adopted by traders ahead of wholesale inflation data for May to be released later in the day, also influenced the market sentiments. However, some support came in from reports that foreign institutional investors (FIIs) bought shares worth a net Rs 1,099.92 crore on June 13, 2014. Languishing in red, both Sensex and Nifty were trading below the crucial 25,150 and 7,550 levels respectively, with losses of over 0.40%. Meanwhile, broader indices too succumbing to selling pressure were trading with loss in the range of 1.41-1.50%. Shares of Oil & Gas counter were trading lower as the government is seeking certain changes in the oil & gas production contracts for faster resolution of legal disputes. On the flip side, stocks from Information Technology (IT) counter were trading higher on Rupee’s depreciation to month low level.

In scrip specific development, Shares of Tata Consultancy Services gained after the company kept its outlook on first-quarter margins and revenue unchanged on Friday. Moreover, shares of Idea Cellular were trading higher after the Reserve Bank of India (RBI) announced that foreign institutional investors (FIIs) can now purchase up to 49% stake in telecom operator. On the other hand, shares of Hero MotoCorp declined after US based private equity firm Bain Capital has sold 56.18 lakh shares of the company via bulk deals on the stock exchanges.

On the global front, most of the Asian equity indices were trading in red as crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports. Back home, traders were seen piling up positions in IT, Teck and Healthcare stocks, while selling was witnessed in Power, Capital Goods and PSU sector stocks. The market breadth on BSE was negative, out of 2335 stocks traded, 675 stocks advanced, while 1586 stocks declined on the BSE.

The BSE Sensex is currently trading at 25123.86 down by 104.31 points or 0.41% after trading in a range of 25268.41 and 25076.28. 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 1.41%, while Small cap index down by 1.50%.

The gaining sectoral indices on the BSE were, IT up by 1.25%, Teck up by 0.81%, Healthcare up by 0.45% and FMCG up by 0.31%. While, Power down by 2.23%, Capital Goods down by 2.08%, PSU down by 1.76%, Oil & Gas down by 1.31% and Consumer Durables down by 1.30% were the losing indices on BSE.   

The top gainers on the Sensex were TCS up by 1.88%, Bajaj Auto up by 1.64%, Infosy up by 1.43%, Sun Pharma up by 1.32% and Gail India up by 1.31%. On the flip side, Tata Power down by 2.51%, L&T down by 2.24%, Tata Steel down by 2.00%, Axis Bank down by 1.91% and RIL down by 1.84%.

Meanwhile, Concerned over the prevailing economic slowdown in the country, Finance Minister Arun Jaitley has asserted that fiscal disciplining is required to put the economy of the country back on track as India has witnessed two successive years of sub-five percent growth. Indian economy’s growth slowed down to decade low at 4.5 percent in FY13 and 4.7 percent in FY14.

Finance Minister further stated that present situation of the Indian economy is challenging and factors like high interest rates, rising inflation, low investments and slow execution of infrastructure projects are impeding the business sentiments in the country.  Therefore, there is a need to move towards an era of fiscal discipline with objective to reduce fiscal deficit, contain inflation and improve growth rate.

By adding further, Finance Minister highlighted that it has now become imperative to take fiscal decisions. However, in the short run, such measures may not go down well with general opinions, but will yielded results in the subsequent years. Prime Minister Narendra Modi also warned of ‘tough decisions’ over the next couple of years to improve the country's financial health.

The CNX Nifty is currently trading at 7,506.25 down by 35.85 points or 0.48% after trading in a range of 7,548.60 and 7,487.55. There were 15 stocks advancing against 35 declining on the index.

The top gainers of the Nifty were TCS up by 2.10%, Cairn up by 2.03%, Bajaj-Auto up by 1.70%, Gail up by 1.58% and Infosys up by 1.35%. On the flip side, PNB down by 2.66%, Tata Power down by 2.51%, L&T down by 2.25%, Bank of Baroda down by 2.13% and IndusInd Bank down by 2.08% were the major losers on the index.

Most of the Asian equity indices were trading in red; Nikkei 225 tumbled 1.41%, Hang Seng slipped by 0.10%, Jakarta Composite dipped by 0.42%, Straits Times declined by 0.01% and FTSE Bursa Malaysia KLCI was down by 0.18%. On the flip side, KOSPI Index was up 0.14% and Shanghai Composite was up by 0.19%.