Markets continue to trade in negative territory in afternoon session

Indian equity benchmarks continue to trade in negative territory in afternoon session on account of heavy selling in power, banking, consumer durables and capital goods stocks amid weak global cues. Most of the sectoral indices were trading in red with capital goods as the top losing index trading down by over 1%. Sentiments got a hit as fiscal deficit at the end Q1 FY15 was pegged at 56.1% of the budget estimate of Rs 5.31 lakh crore for the full fiscal year as growth in revenue receipts slowed and interest payments rose. Further, factors like feeble global cues due to tensions related to Russia and Argentina defaulting on its debt for the second time in 12 years and weak quarter earnings of some blue chip companies also weighed on the investors’ sentiments. However, a marginal recovery from intra-day low level was seen as fresh buying appeared in infrastructure and auto stocks. Sentiments got some support as HSBC Manufacturing Purchasing Managers’ Index (PMI) rose to 53.0 in the month of July from 51.5 in June. Broader markets were outperforming the benchmarks as both mid cap and small cap indices were trading in positive territory.

Greaves Cotton has lost around 2.3% to Rs 112 after India’s leading engineering company posted 9.51% decline in net profit at Rs 28.74 crore for Q1FY15 as compared to Rs 31.76 crore in the corresponding quarter previous year. Credit Analysis and Research surged around 3.6% after the company posted 9.4% rise in the net profit at Rs 26.60 crore for Q1FY15. Country's largest car-maker, Maruti Suzuki India gained around 3.7% at Rs 2,617 on account of a 21.7% rise in sales in the month of July.

On global front, Asian equity indices were trading in red with Straits Times Index down by 0.84% and Nikkei 225 down by 0.60%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,700 and 26,000 levels respectively. The market breadth on BSE was positive, out of 2,415 stocks traded, 1,079 stocks advanced, while 1,244 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,793.42 down by 101.55 points or 0.39% after trading in a range of 25,801.53 and 25,679.46. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were Infrastructure up by 0.75%, Auto up by 0.48%, FMCG up by 0.39%, Teck up by 0.19% and Metal up by 0.13%. On the flip side, Capital Goods down by 1.07%, Power down by 0.89%, Oil and Gas down by 0.65%, Bankex down by 0.39% and IT down by 0.33% were the losing indices on the BSE

The top gainers on the Sensex were Maruti Suzuki up by 3.76%, Bharti Airtel up by 3.11%, HUL up by 2.04%, Tata Steel up by 1.62% and Tata Motors up by 1.42%. On the flip side, NTPC down by 2.66%, HDFC down by 2.13%, Sun Pharma down by 1.80%, HDFC Bank down by 1.58% and Tata Power down by 1.58% were the top losers on the BSE. 

Meanwhile, in a cause of concern for the Finance Ministry, India’s fiscal deficit crossed half the budget estimate (BE) for 2014-15 in the first three months of the financial year. Fiscal deficit at the end Q1 FY15 was pegged at 56.1% of the budget estimate of Rs 5.31 lakh crore for the full fiscal year as growth in revenue receipts slowed and interest payments rose.

Total expenditure of the government during April-June was Rs 4.13 lakh crore or 23 percent of the entire year estimates. Of the total expenditure, plan spending was Rs 1,11,806 crore and non plan spending was Rs 3,01,797 crore. Conversely, revenue collection during the reported period was Rs 1,14,427 crore or 9.6 percent of the estimate, lowered than 11.1 percent of the estimates during  2013-14. Furthermore, total receipts (revenue and non-debt capital) of the government during the three months was Rs 1,15,744 crore. Revenue deficit in the three months was recorded at Rs 2,49,358 crore which was 65.9 percent of the estimates.

The government during budget 2014-15 has set fiscal deficit target at 4.1 percent of GDP this year and decided to lower it to 3 percent of GDP by 2016-17. In FY14, India’s fiscal deficit narrowed to Rs 5,08,149 crore or 4.5 percent of GDP as compared to 4.89% of GDP in the FY13. High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

The CNX Nifty is currently trading at 7,693.15 down by 28.15 points or 0.36% after trading in a range of 7,694.25 and 7,649.75. There were 20 stocks advancing against 30 declining on the index.

The top gainers of the Nifty were Maruti up by 3.72%, Bharti Airtel up by 3.26%, HUL up by 1.96%, Ultratech Cement up by 1.81% and BPCL up by 1.77%. On the flip side, NTPC down by 2.76%, Tech Mahindra down by 2.25%, HDFC down by 2.08%, Sun Pharma down by 1.79% and HDFC Bank down by 1.67% were the major losers on the index.

Asian equity indices were trading in red; Straits Times Index down by 0.84% to 3,345.77,  Nikkei 225 down by 0.60% to 15,527.16, Hang Seng down by 0.45% to 24,644.06, Taiwan Weighted down by 0.53% to 9,266.51and Jakarta Stock Price Index down by 0.19% to 5,088.80. While, Shanghai Composite up by 0.48% to 2,211.43