Markets continue to trade in red in afternoon session

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen on account of buying witnessed in metal, auto and consumer durables stocks. Though most of the sectoral indices were trading in green, sharp selling witness in defensive sectors stock such as IT, teck and FMCG dragged the market lower. The concerns like increasing crude oil prices owing to the prevailing crises in Iraq, fear of high inflation owing to hike in railways fares and weak monsoon and depreciation in rupee value against the dollar weighed on the sentiment. Further, the report that foreign direct investment (FDI) in India declined by 26 percent to five-month low at $1.70 billion in the month of April as compared to $2.32 billion in April 2013 also aided to the pessimistic sentiments. Cement manufacturers' shares were trading down by around 0.5% after the government announced a steep 6.5% hike in rail freight effective June 25.  On the other hand, metal was the top gainer on BSE up by 1.37% on hopes of better demand after a preliminary HSBC survey showed activity in China's factory sector expanded in June for the first time in six months. Suger stocks were on buyer's radar after the report that Indian government to discuss sugar cane dues on Monday.

Shares of ITC were under pressure, down by around 3% to Rs 326 amid concerns that the government may increase tax on cigarettes. Alternatively, Ceat, extending its Friday’s 10% rally, has surged around 6% to Rs 618 after the overseas investor has bought equity shares worth of Rs 13 crore of the company though open market.

On global front, Asian equity indices were trading in green with Straits Times up by 0.07% and  Nikkei up by 0.13% to 15,369.28. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,500 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,555 stocks traded, 1,234 stocks advanced, while 1,206 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,037.46 down by 68.05 points or 0.27% after trading in a range of 25,197.50 and 25,980.81. There were 29 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46%, while Small cap index up by 0.33%.

The gaining sectoral indices on the BSE were Metal up by 1.37%, Auto up by 0.87%, Consumer Durables up by 0.57%, Oil and Gas up by 0.35% and Capital Goods up by 0.27%. On the flip side, FMCG down by 2.52%, IT down by 1.13%, Teck down by 0.81% and Power down by 0.02% were the losing indices on BSE.  

The top gainers on the Sensex were Hero MotoCorp up by 2.34%, SSLT up by 2.28%, Hindalco Inds up by 1.65%, ONGC up by 1.63% and Tata Steel up by 1.49%. On the flip side, ITC down by 4.03%, Infosys down by 1.77%, HUL down by 1.22%, Wipro down by 1.17% and Cipla down by 0.97% were the top losers on the BSE.

Meanwhile, assuring the global investors about Indian economy’s growth, Finance Secretary Arvind Mayaram has stated that policies of the new government will deepen the reform process to put Indian economy back on high growth path which is in line with the G20 objective of strong, sustainable and balanced growth. India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14.

Arvind Mayaram has asserted that as per the priorities of the new elected government, India has started strengthening growth strategies. Mayaram further added that global scenario has become challenging and less supportive for emerging economies growth prospects. Emerging markets are going through a phase of tepid economic activity, with some of them witnessing significant negative output gaps mainly due to the external factors especially increased volatility with unwinding of unconventional policies. Referring to prevailing crisis in Iraq, Mayaram has stated that recent developments in Iraq have created huge uncertainties over the global economy and the volatility in petroleum prices has put pressure on countries like India.

Iraq is India's second largest crude oil supplier after Saudi Arabia. It met over 13% of India's oil need in 2013-14, supplying about 25.1 million tonnes (MT) of oil. The same level of imports was projected to be maintained in current fiscal. The price of the Indian crude basket has soared from $106.88 on June 2 to $111.94 on June 19. At the same time, Indian rupee has weakened against the dollar and is now hovering at Rs 60.20 as compared to Rs 58.50 per dollar early this month. Every dollar increase in the oil price raises the import bill by Rs 7,500-8,000 crore. High crude oil price can increase inflation as well as trade deficit in India.

The CNX Nifty is currently trading at 7,486 down by 25.45 points or 0.34% after trading in a range of 7,534.80 and 7,469.05. There were 29 stocks advancing against 21 declining on the index.

The top gainers of the Nifty were Hero Motocorp up by 2.28%, SSLT up by 2.24%, Jindal Steel up by 2.07%, ONGC up by 1.59% and M&M up by 1.53%. On the flip side, ITC down by 4.10%, Kotak Bank down by 2.99%, Infosys down by 1.80%, BPCL down by 1.37% and HUL down by 1.35% were the major losers on the index.

Asian equity indices were trading in green; Straits Times up by 0.07% to 3,261.09, Nikkei up by 0.13% to 15,369.28, Jakarta Stock Index up by 0.09% to 4,851.86, Shanghai Composite up by 0.14% to 2,029.45 and Hang Seng up by 0.19% to 23,237.24. While, Taiwan Weighted down by 0.49% to 9,228.35