Barometer gauges magnify losses ahead of Rail Budget 2014

Barometer gauges have magnified their losses on the back of relentless profit-booking by market-participants ahead of Rail Budget 2014, with Sensex and Nifty both edging lower by two tenth of a percent, below the crucial 26,000 and 7,750 level. Railway Minister Sadananda Gowda will present his maiden Rail Budget on Tuesday and it is expected that it will bring some cheer to passengers who have been shorn of high-speed travel for decades, regardless of assurances in the past.

Barring FMCG stocks, though none of the sectoral indices on BSE were trading in green, fall of the markets is being led by stocks from Metal, Realty and Auto counters were the top losers of the session. Meanwhile, railway stocks too have lost steam ahead of budget, with Texmaco Rail & Engineering, Titagarh Wagons and Kernex Microsystems losing out in the range of 2%-4%.

On the global front, Asian stocks were trading mixed on Tuesday as Wall Street turned cautious ahead of the corporate reporting season and earnings guidance from regional tech heavyweight Samsung came in well short of forecasts.

Closer home, the BSE Sensex is currently trading at 26051.14, down by 48.94 points or 0.19% after trading in a range of 25982.97 and 26190.44. There were 10 stocks advancing against 20 stocks declining on the index. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1615:1006; while 95 shares remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.22%, while Small cap index down by 0.54%.

The gaining sectoral indices on the BSE were FMCG up by 0.17% while, Metal down by 1.28%, Realty down by 0.90%, Auto down by 0.87%, PSU down by 0.78%, Oil & Gas down by 0.70% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.51%, Sun Pharma Inds. up by 2.49%, Cipla up by 1.71%, Hindustan Unilever up by 0.64% and Dr. Reddys Lab up by 0.56%. On the flip side, Sesa Sterlite down by 3.04%, ONGC down by 1.58%, Mahindra & Mahindra down by 1.37%, Maruti Suzuki down by 1.01% and Wipro down by 1.00% were the top losers.

Meanwhile, according to the Engineering Export Promotion Council (EEPC), India’s engineering exports from the country can surpass the $70 billion target in FY15 if 3 percent interest subvention scheme is extended for the entire financial year. Earlier, the government has approved interest subvention of 3 percent to 235 engineering tariff lines and the MSME sector valid till last fiscal ended March 31.

In the view of prevailing wide gap in cost of finance between India and overseas countries, the EEPC has stated that it has become imperative to extend the benefit of interest subvention scheme to this fiscal. Currently in India, interest rate vary between 10.5 percent and 11 percent per annum and with 3 percent interest subvention, interest rates comes in the range of 7.5-8 percent per annum, lowering the cost of credit considerably for sector. The scheme should be extended to the entire engineering sector. Current budgetary allocation on this account is Rs 1,200 crore and an additional amount of Rs 500 crore will cover the entire sector, it added.

Further, EEPC stated that it is the right time for the government to announce such measure as order book position from the US has considerably improved. The US alone accounted for about 15 percent of country’s total engineering exports. Engineering exports, which account for about 20 percent of India's outward shipments, registered growth of 8.49% respectively to $61.61 billion in FY 14.    

The CNX Nifty is currently trading at 7764.85, down by 22.30 points or 0.29% after trading in a range of 7744.95 and 7808.85. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.22%, Sun Pharma Inds up by 2.00%, Kotak Mahindra Bank up by 1.88%, Cipla up by 1.66% and Asian Paints up by 1.13%. On the flip side, Sesa Sterlite down by 3.06%, Power Grid Corpn down by 2.33%, Ultratech Cement down by 1.91%, HCL Tech down by 1.85% and ONGC down by 1.80% were the top losers.

Asian markets were trading mixed: with Shanghai Composite increasing by 0.19 points or 0.01% to 2,060.11, FTSE Bursa Malaysia KLCI rising by 0.27 points or 0.01% to 1,892.77, KOSPI Index rising by 1.54 points or 0.08% to 2,006.66, Taiwan Weighted adding 10.78 points or 0.11% to 9,530.98 and  Jakarta Composite advancing 48.96 points or 0.98% to 5,037.99.

On the flip side, Nikkei 225 was trading lower by 51.37 points or 0.33% to 15,328.07, Hang Seng edging tad lower by 22.95 points or 0.1% to 23,517.97 and Straits Times losing 3.61 points or 0.11% to 3,287.96