Markets slip into red; Nifty breaches 7,500 mark

Indian equity benchmarks pared all their early gains and entered into negative trajectory in noon deals due to heavy selling in metal and realty stocks amid weak Asian cues. Sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 601.89 crore on June 26, as per provisional data from the stock exchanges. Sentiments also remained dampened on report which indicated drought-like conditions intensifying with the monsoon not moving an inch for 10 days now, leaving oilseeds, pulses and paddy fields parched and posing the threat of food inflation and weak rural demand in the first year of the Narendra Modi government.

On the global front, Asian equity benchmarks were trading in the red at this point of time with investors treading cautiously amid uncertainty about the US economic recovery following some recent downbeat data. Worries about the situation in Iraq too weighed on sentiment to an extent. However, European markets have made a positive start with, CAC, DAX and FTSE were trading higher.

On the sectoral front, software, healthcare and technology witnessed the maximum gain in trade, while realty, metal and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was positive; there were 1,377 shares on the gaining side against 1,310 shares on the losing side while 120 shares remain unchanged.

The BSE Sensex is currently trading at 25049.60 down by 13.07 points or 0.05% after trading in a range of 25209.61 and 25032.94. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index down by 0.26%, while Small cap index was down by 0.09%.

The gaining sectoral indices on the BSE were IT up by 2.12%, Healthcare up by 1.74%, Teck up by 1.40% and Consumer Durables up by 0.33%. On the flip side, Realty down by 1.50%, Metal down by 1.46%, PSU down by 1.01%, Infrastructure down by 0.90% and Power down by 0.72% were the losing indices on BSE.    

The top gainers on the Sensex were Sun Pharma up by 3.87%, TCS up by 3.78%, Wipro up by 1.48%, Dr Reddy’s Lab up by 1.47% and Infosys up by 0.74%. On the flip side, BHEL down by 3.02%, Bharti Airtel down by 2.35%, Hindalco Inds down by 2.24%, Coal India down by 1.97% and M&M down by 1.66% were the top losers on the BSE.

Meanwhile, the government has extended implementation of National Food Security Act by three months and stated that all states of the country will get a time frame of three months to implement the Act. The government has called a meeting of states’ Food Ministers on July 5 to discuss the Act’s rollout and the problems faced by the states. The meeting would also discuss steps that states should take to check hoarding and tackle inflation.

Earlier, states were given time till July 4 to implement the Act but so far only 5 states have implemented the Food Security Act and 6 states have implemented the Act partially. More than 19 states and union territories are yet to implement the provisions of the Act.

Food Security Act is aimed at providing highly-subsidised food grains to 800 million poor people in addition to continuation of the support price for the farmers. Food Security Act to give nation's two-third population the right to get 5 kgs of foodgrains every month per person at highly subsidised rates of Rs 1-3 per kg, costing around Rs 1,25,000 crore annually for the government to supply around 62 million tonnes of rice, wheat and coarse cereals to identified beneficiaries. The Act is expected to broaden the fiscal deficit of the government in future. 

The CNX Nifty is currently trading at 7,484.50 down by 8.70 points or 0.12% after trading in a range of 7,538.75 and 7,482.30. There were 14 stocks advancing against 36 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 3.91%, TCS up by 3.85%, HCL Tech up by 2.94%, Tech Mahindra up by 2.53% and Wipro up by 1.56%. On the flip side, Ultra-tech Cement down by 4.42%, BHEL down by 3.14%, Hindalco down by 2.63%, McDowell down by 2.49% and Bharti Airtel down by 2.35% were the major losers on the index.

Asian equity indices were trading in red; Nikkei 225 was down 1.39%, Hang Seng was down 0.11%, KOSPI Index was down 0.33%, Straits Times was down 0.24%, Jakarta Composite was down 0.63%, Shanghai Composite was down 0.11%, FTSE Bursa Malaysia KLCI was down 0.39% and Taiwan Weighted was down by 0.15%.

European shares got off to a positive start; with Germany’s DAX adding by 0.14%, France’s CAC 40 gaining by 0.09% and United Kingdom’s FTSE 100 inching up 0.15%.