Benchmarks languish at day’s low on sustained selling pressure

Down in dumps, benchmarks were languishing at day’s low point on sustained selling pressure on penultimate session of F&O expiry, with lower-than-expected earnings from companies such as Larsen and Toubro (L&)  and IDFC also weighing on the sentiments of Indian equity markets. In absence of any positive domestic trigger, both Sensex and Nifty were trading below the crucial 26,000 and 7,730 marks respectively, with losses of around two tenths of a percent. Meanwhile, broader indices too imitating the somber mood were trading with losses of around three tenths of a percent.

However, losses to some extent at Dalal Street were restricted on account of mostly positive regional counterparts, though a negative start of European counterparts on prevailing caution ahead of U.S. data and policy decision from the Federal Reserve for more price direction, could weigh on the sentiment. Street widely expects Fed to cut its monthly bond-buying program by another $10 billion and its policy statement, together with key jobs data on Friday, could provide some cues on performance of world's largest economy.

Closer home, sentiment took a hit for the worse post market heavyweight, L&T scrips cracked over 7% on lower than expected Q1 numbers. The biggest engineering and construction firm of the country reported more than double Net Profit for the June quarter, but profitability of core businesses like engineering, power, material handling and heavy engineering showed pressure on margins. The sharp sell in L&T dragged the entire capital Goods counter lower, meanwhile, stocks from Metal and Realty counters were the prominent losers of the index. On the flip side, much of buying was witnessed in stocks from Consumer Durable, Infrastructure and fast Moving Consumer Goods sector stocks, which were restricting further downside of the market. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1110:787; while 21 shares remained unchanged.

The BSE Sensex is currently trading at 25934.52, down by 56.71 points or 0.22% after trading in a range of 25915.21 and 26022.62. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index down by 0.38%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.93%, INFRA up by 0.84%, FMCG up by 0.51%, TECK up by 0.35%, Oil & Gas up by 0.26% while, Capital Goods down by 4.84%, Metal down by 1.08%, Realty down by 0.50%, Power down by 0.43%, Auto down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.76%, GAIL India up by 1.91%, ITC up by 1.47%, ICICI Bank up by 1.34% and ONGC up by 1.15%. On the flip side, Larsen & Toubro down by 7.04%, Sesa Sterlite down by 3.13%, Tata Power down by 1.93%, SBI down by 1.75% and Tata Motors down by 1.71% were the top losers.

Meanwhile, National Council of Applied Economic Research (NCAER) has projected Indian economic growth rate at 5.2-5.7 percent for current fiscal. The economic think tank NCAER has stated that country’s manufacturing sector is showing signs of nascent recovery and if investment spending accelerates in coming future, the economic growth could increase to 5.7 percent in FY15.

NCAER further stated that the growth in agriculture sector is likely to be lower in FY15 due to poor monsoon. It expects fiscal deficit at 4.5 percent of GDP for 2014-15, higher than the finance ministry’s target at 4.1 percent of GDP. NCAER projected wholesale price based average inflation rate at 6.4 percent in the reported fiscal.

Macro-economic indicators have shown signs of nascent recovery over the past two months. The index of industrial production (IIP), the principal indicator for industrial activity grew by 3.4 percent and 4.7 percent in the months of April and May 2014. Manufacturing, which accounts for 75 percent of the index, grew at 2.5 percent and 4.8 percent in April and May respectively as against negative growth in the earlier months. The consumer price index (CPI)-based inflation eased to 29-month low at 7.31 percent y-o-y in June as compared to 8.28 percent in the previous month. However, India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy’s growth.  

The CNX Nifty is currently trading at 7729.90, down by 18.80 points or 0.24% after trading in a range of 7726.50 and 7756.85. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.93%, GAIL India up by 1.96%, Kotak Mahindra Bank up by 1.73%, ICICI Bank up by 1.37% and ITC up by 1.32%. On the flip side, Larsen & Toubro down by 6.95%, Sesa Sterlite down by 3.08%, Jindal Steel & Power down by 2.00%, Tata Power down by 1.93% and SBI down by 1.86% were the top losers.

Asian markets were mostly trading into green; with FTSE Bursa Malaysia KLCI gaining by 2.9 points or 0.15% to 1,880.24; KOSPI Index advancing 20.64 points or 1% to 2,082.61; Nikkei 225 rising by 28.16 points or 0.18% to 15,646.23; Taiwan Weighted adding 55.14 points or 0.59% to 9,447.02; Hang Seng rallying 232.43 points or 0.94% to 24,872.96. On the flip side, Jakarta Composite was down by 9.84 points or 0.19% to 5,088.80; Straits Times lost 2.71 points or 0.08% to 3,353.37 and Shanghai Composite down by 1.26 points or 0.06% to 2,181.93 were among the losers in the Asian pack.

European markets got off to a negattive start; with France’s CAC losing 13.79 points or 0.32% to 4,351.79 Germany’s DAX shedding 4.6 points or 0.05% to 9,649.03 and  Germany’s DAX sliding by 4.07 points or 0.06% to 6,803.68