Benchmarks extend losses; Realty, Power drag

Indian equity benchmarks added loses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from European counterparts. The sentiments were on pessimistic mood despite the International Monetary Fund (IMF) retained its growth forecast for India at 5.4% in 2015 and a stronger 6.4% growth next year. Traders were seen piling up positions in HealthCare, FMCG and Auto while selling was witnessed in Realty, Power and Metal sector stocks. In scrip specific development, Wipro was trading weak after the IT major posted a revenue of $1,740.2 million in the quarter ended June, a growth of 1.2% compared to the preceding quarter, tad lower than street estimates. Motherson Sumi Systems was trading in red after foreign brokerage firm downgraded the stock. SKS Microfinance was trading firm riding high on its April-June quarter performance. The microfinance company reported a net profit at Rs 49.3 crore in the first quarter of FY15 over the year-ago period.

On the global front, the Asian markets were trading mixed, while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,800 and 26,100 levels respectively. The market breadth on BSE was negative in the ratio of 742:2013 while 87 scrips remained unchanged.

The BSE Sensex is currently trading at 26068.05, down by 203.80 points or 0.78% after trading in a range of 26300.17 and 26007.31. 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 1.76%, while Small cap index down by 2.29%.

The gaining sectoral indices on the BSE were HealthCare up by 1.02% and FMCG up by 0.01% while, Realty down by 3.20%, Power down by 2.47%, Metal down by 2.43%, India Infrastructure Index down by 2.13% and Oil & Gas down by 2.09% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Industries up by 2.91%, Hindustan Unilever up by 2.08%, HDFC up by 1.97%, Dr. Reddy’s Lab up by 1.59% and Hero MotoCorp up by 1.22%. On the flip side, Wipro down by 4.79%, BHEL down by 4.25%, Hindalco Industries down by 2.76%, Reliance Industries down by 2.67% and SSLT down by 2.52% were the top losers.

Meanwhile, optimistic over the fundamentals of Indian economy, the International Monetary Fund (IMF) has retained its growth forecast at 5.4 percent in 2015 and a stronger 6.4 percent growth next year. Among the BRICS nations, India is the only emerging economy to escape a cut in growth forecast in the IMF’s update of its World Economic Outlook.

The IMF stated that growth has bottomed out in India and activity is projected to pick up gradually after the post-election recovery in business sentiment, offsetting the effect of an unfavourable monsoon on agricultural growth. After growing at around 9 percent during FY07-FY11, Indian economic growth slowed down to 6.7 percent during FY12 and below 5 percent during FY13 and FY14.

On global front, IMF has stated that weaker growth in the US, China and several important emerging markets forced the Fund to downgrade global economy growth forecast to 3.4 percent from 3.7 projected earlier. It added that global growth could be weaker for longer, given the lack of robust momentum in advanced economies despite very low interest rates and the easing of other brakes to the recovery. The IMF expects China to grow at 7.4 percent this year, 0.2 percentage point lower than its previous forecast. Russian economy is expected to grow by only 0.2 percent this year, down from its previous forecast of 1.3 percent as escalating sanctions against Russia for its actions in Ukraine sparked capital flight out of the country, exacerbating a fall in investment levels. The fund also cut growth expectations for Brazil and Mexico by more than half a percentage point for the year as weaker US growth and timid investment weigh on growth.

Meanwhile, the IMF suggested that the governments in both advanced and emerging-market economies must take structural reforms to close infrastructure gaps, strengthen productivity and lift potential growth rate.

The CNX Nifty is currently trading at 7766.05, down by 64.55 points or 0.82% after trading in a range of 7840.95 and 7748.60. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Industries up by 2.95%, Hindustan Unilever up by 2.03%, HDFC up by 1.91%, Dr. Reddy’s Lab up by 1.73% and Lupin up by 1.49%. On the flip side, Wipro down by 4.82%, DLF down by 4.82%, Jindal Steel down by 4.55%, BHEL down by 4.25% and Cairn India down by 3.97% were the top losers.

Asian stocks were trading on a mixed note; KOSPI Index adding 0.36%; Shanghai Composite advancing 1.02%; Hang Seng rising by 0.31%; Nikkei 225 surging 1.13%.

On the flip side, Taiwan Weighted declining by 0.93%; Jakarta Composite inching lower by 0.29%; Straits Times dropped 0.30% and FTSE Bursa Malaysia KLCI surrendering 0.36%.

The European markets were trading mostly in red; Germany’s DAX was down by 0.06%, France’s CAC 40 lost 0.53% while, UK’s FTSE 100 added 0.02%.