Benchmarks add losses; Oil & Gas, Realty drag

Indian equity benchmarks enlarged losses in the late afternoon session on account of selling in frontline counters, taking cues from European counterparts. India receiving 45% less rainfall compared to the average during the first spell of the monsoon, which may lead to drought-like conditions added pessimism on the street. The Indian Meteorological Department (IMD) has reported that only 43.4 mm of rainfall was recorded between June 1 and 17, as against the normal rain of 78.8 mm. Traders were seen piling up positions in Capital Goods, Consumer Durables and HealthCare while selling was witnessed in Oil & Gas, Realty and PSU sector stocks. Oil & Gas sector was trading weak as the government clarified that currently there is no proposal to hike LPG and kerosene prices. Capital Goods was the leading gainer among indices as the government extended duty concessions on Capital Goods and Automobile sector by six months. In scrip specific development, Essar Oil was locked at upper circuit limit after the company announced floor price for a proposed offer to delist it from the stock market. The Indian markets may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. June 2014 series to next month i.e. July 2014 series. The near-month June 2014 F&O contract expires today i.e. June 26, 2014.

On the global front, the Asian markets were trading in green, while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,550 and 25,200 levels respectively. The market breadth on BSE was negative in the ratio of 1393:1469 while 95 scrips remained unchanged.

The BSE Sensex is currently trading at 25136.05, down by 177.69 points or 0.70% after trading in a range of 25309.33 and 25117.82. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.15%, while Small cap index down by 0.11%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.98%, Consumer Durables up by 0.73%, HealthCare up by 0.39%, Auto up by 0.37% and TECK up by 0.34% while, Oil & Gas Index down by 3.45%, Realty Index down by 2.34%, Public Sector Undertaking (PSU) down by 1.81%, Metal Index down by 0.75% and India Infrastructure Index down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.44%, Dr. Reddy’s Lab up by 1.34%, Larsen & Toubro up by 1.25%, Wipro up by 0.94% and Bajaj Auto up by 0.78%. On the flip side, ONGC down by 5.53%, Reliance Industries down by 3.27%, NTPC down by 2.55%, HDFC down by 1.82% and GAIL India down by 1.58% were the top losers.

Meanwhile, the government has given an in-principle approval to a memorandum of understanding (MoU) allowing China to set up industrial parks in the country. The industrial parks are expected to include special economic zones (SEZs) and manufacturing zones. Uttar Pradesh, Haryana and Andhra Pradesh are possible states where the parks could come up. The move came ahead of the five-day visit of Vice-President Hamid Ansari to China from June 26.

China had already established five industrial parks in ASEAN countries like Vietnam, Cambodia and Indonesia and is keen to set up similar industrial parks in India. The move is likely to enhance the Chinese investment in the country. The government wants to make India a manufacturing hub like China. Since 1991 when India opened up its economy, the investment from China remained sluggish at mere $469 million till now as compared to $16-17 billion from Japan.

The bilateral trade between China and India declined from around $75 billion in 2011 to $65.45 billion in 2013. Furthermore, India has huge trade deficit with China at average around $35 billion. During FY 14, India imported goods worth $51 billion from China, and exported goods worth $14.86 billion back to China. Both the countries have set $100 billion target by 2015. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. Better access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals could help India to reduce the imbalance in trade.

The CNX Nifty is currently trading at 7519.10, down by 50.15 points or 0.66% after trading in a range of 7570.20 and 7514.30. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab was up by 1.60%, HCL Technologies up by 1.41%, BHEL up by 1.36%, L&T up by 1.19% and Bajaj Auto up by 0.84%. On the flip side, ONGC down by 5.48%, Reliance Industries down by 3.42%, DLF down by 2.53% NTPC down by 2.52% and BPCL down by 2.04% were the top losers.

Asian equity indices were trading in green; Straits Times up by 0.46%, Hang Seng up by 1.45%, Nikkei 225 up by 0.27%, Jakarta Stock Index up by 0.49%, Shanghai Composite up by 0.65% and Taiwan Weighted up by 0.85%.

The European markets were trading mostly in red; Germany’s DAX lost 0.02%, France’s CAC 40 dropped 0.11% while UK’s FTSE 100 was up by 0.01%.