Benchmarks extend losses; Nifty slips below 7500 mark

Indian equity benchmarks extend losses and continued weak trade in the late afternoon session on account of selling in frontline counters and taking cues from regional market. The sentiments were on pessimistic mood as weak rainfall in India during the ongoing monsoon season has raised concerns of a first drought in five years. There was also nervousness about whether the new government of Prime Minister Narendra Modi could achieve its ambitious fiscal deficit target. The maiden budget unveiled yesterday provided no clarity on the way to reduce the fiscal deficit and restore investor confidence. Investors were cautious ahead of May IIP data and June CPI data which is scheduled to be released later in the evening. Traders were seen piling up positions in IT, HealthCare and TECK, while selling was witnessed in Realty, Power and Capital Goods sector stocks. In scrip specific development, India’s second largest IT services provider, Infosys was trading in green after reporting April-June quarter earnings. The software major said it would boost investment in cloud computing, smartphone apps and other new technologies to win more high-margin outsourcing contracts.

On the global front, the Asian markets were trading mostly in red, while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,500 and 25,200 levels respectively. The market breadth on BSE was negative in the ratio of 738:2001 while 80 scrips remained unchanged.

The BSE Sensex is currently trading at 25130.87, down by 241.88 points or 0.95% after trading in a range of 25548.33 and 25073.84. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.12%, while Small cap index down by 2.29%.

The gaining sectoral indices on the BSE were IT up by 1.71%, HealthCare up by 1.60%, TECK up by 1.20% and FMCG up by 0.68% while, Realty down by 3.78%, Power down by 3.76%, Capital Goods down by 3.37%, Metal down by 3.33% and PSU down by 3.05% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Industries up by 2.60%, TCS up by 2.26%, Dr. Reddy’s Lab up by 2.25%, Hindustan Unilever up by 1.61% and Infosys up by 1.58%. On the flip side, BHEL down by 7.03%, Hindalco Industries down by 3.89%, SBI down by 3.80%, L&T down by 3.23% and HDFC down by 3.22% were the top losers.

Meanwhile, with a view to speed up the development of road infrastructure in India, the Road Transport Ministry has asked Prime Minister Narendra Modi to empower the ministry to make it able to award projects worth over Rs 1,000 crore investment. Minister of Road Transport and Highways Nitin Gadkari has stated that a number of projects in the past have got delayed due to a number of committee approvals required for their implementation.

Nitin Gadkari has stated that Since May 26, Road Ministry has cleared Rs 40,000 crore worth of projects which were stuck due to inordinate delays in clearances.  The minister further added that the National Highways Authority of India (NHAI) will soon award new PPP (public-private-partnership) projects in the sector. However, the Minister rejected the possibility of attracting foreign direct investment in the road sector. Finance Minister in Budget 2014-15 has proposed Rs 37,880 crore investment in NHAI, including Rs 3,000 crore for the North East.

There is a need of widespread highway infrastructure in the country to boost the economic growth. Over the past few years, the highway sector has been struggling with slowdown. During FY14, the National Highways Authority of India (NHAI) has managed to award around 2,000 km of road projects as against the set target of 9,000 km, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km. Financial constraints, delay in land acquisition and environmental clearances and lack of project planning are the leading factors impacting road infrastructure development in the country.

The CNX Nifty is currently trading at 7495.05, down by 72.70 points or 0.96% after trading in a range of 7625.85 and 7469.95. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Industries up by 2.56%, Dr. Reddys Lab up by 2.27%, TCS up by 2.17%, Lupin up by 2.08% and HCL Tech up by 1.92%. On the flip side, BHEL down by 7.28%, Jindal Steel down by 6.34%, DLF down by 5.40%, NMDC down by 4.68% and SBI down by 3.60% were the top losers.

Asian stocks were mostly into negative territory; Jakarta Composite was down by 1.77%, Hang Seng down by 0.02%; Taiwan Weighted lost 0.72%; Nikkei 225 slipped 0.34%; KOSPI Index shed 0.70% and FTSE Bursa Malaysia KLCI losing 0.31%.

On the flip side, Shanghai Composite rose by 0.42% and Straits Times added 0.56%.

The European markets were trading in green; Germany’s DAX added 0.23%, France’s CAC 40 gained 0.50% while, UK’s FTSE 100 was up by 0.22%.