Benchmarks continue weak trade; Realty, Power drag

Indian equity benchmarks continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from weak global counterparts. The sentiments were pessimistic from the early trades as concerns of the Ukraine conflict escalated. President Barack Obama meanwhile authorized the US military to conduct airstrikes against Islamist forces as needed in Iraq, but added that the nation would not send new ground troops there. Investors were also cautious after Reserve Bank Governor Raghuram Rajan warned that global markets are at the risk of a crash due to the lingering competitive loose monetary policies being followed by the developed economies. Traders were seen piling up positions in HealthCare and FMCG while selling was witnessed in Realty, Power and Metal sector stocks. In scrip specific development, Bhushan Steel was locked at lower circuit limit after the Central Bureau of Investigation (CBI) arrested Neeraj Singhal, Vice Chairman of the company, in connection with the Syndicate Bank bribery case. Ipca Laboratories was trading in red as US Food and Drug Administration (FDA) has raised more concerns over its manufacturing quality.

On the global front, the Asian markets were trading mostly in red, while the European markets too traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,600 and 25,400 levels respectively. The market breadth on BSE was negative in the ratio of 638:2091 while 91 scrips remained unchanged.

The BSE Sensex is currently trading at 25313.09, down by 275.92 points or 1.08% after trading in a range of 25232.82 and 25406.87. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.11%, while Small cap index down by 2.32%.

The gaining sectoral indices on the BSE were HealthCare up by 0.14% and FMCG up 0.12% while the losing sectoral indices on the BSE were Realty down by 3.67%, Metal down by 2.85%, Power down by 2.74%, Capital Goods down by 2.47%, PSU down by 2.21%,

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.37%, Bharti Airtel up by 0.67%, ITC up by 0.59% and TCS up by 0.39%. On the flip side, Sesa Sterlite down by 4.25%, BHEL down by 3.41%, Tata Power down by 3.26%, Hindalco down by 3.17% and Tata Steel down by 2.85% were the top losers.

Meanwhile, a day after approving the long-delayed proposal for raising the foreign direct investment limit (FDI) in railway sector, the government stated that foreign investment in railways will help in strengthening infrastructure without affecting security.

Commerce and Industry Minister Nirmala Sitharaman asserted that the government had taken the decision to ease the FDI policy in those areas of railways which will not  affect security and sovereign authority of the sector. Further, the Minister added that all security-related concerns raised by the Home Ministry have been taken care of by the policy draft and essential operations being kept within the railways. Home Ministry had raised concerns over foreign investments in rail infrastructure in border areas, particularly from China. India and China are likely to sign a memorandum of understanding (MoU) for cooperation in Railways during the forthcoming visit of Chinese President Xi Jinping in September 2014. China had already sent an advance team for cooperation in the construction and overhaul of the existing railway system across India.

Railways’ is an important sector for India and has the potential to raise India's economic growth by over one percent. The government has approved the proposal for raising 100 percent FDI in railway infrastructure. Foreign investors can now invest in setting up of high-speed corridors, suburban rail networks, signaling projects, logistic hubs and in creating links to industrial parks. The move is likely to help in modernisation and expansion of the Railways which is facing a cash-crunch of around Rs 29,000 crore. Currently, there is a complete restriction on any kind of FDI in the Railways sector except mass rapid transport systems.

The CNX Nifty is currently trading at 7557.30, down by 91.95 points or 1.20% after trading in a range of 7540.10 and 7592.45. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.22%, HCL Tech up by 0.85%, Bharti Airtel up by 0.53%, ITC up by 0.48% and TCS up by 0.38%. On the flip side, Sesa Sterlite down by 4.50%, DLF down by 4.36%, BHEL down by 3.96%, BPCL down by 3.44% and Hindalco down by 3.23% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 454 points or 2.98% to 14,778.37, Hang Seng decreased 56.15 points or 0.23% to 24,331.41, Taiwan Weighted decreased 45.48 points or 0.5% to 9,085.96, Straits Times decreased 33.16 points or 1% to 3,281.06, FTSE Bursa Malaysia KLCI decreased 27.17 points or 1.46% to 1,840.15, KOSPI Index decreased 23.41 points or 1.14% to 2,031.10 and Jakarta Composite decreased 10.9 points or 0.22% to 5,056.08.

On the other hand, Shanghai Composite increased 6.76 points or 0.31% to 2,194.43.

The European markets were trading in red; UK’s FTSE 100 decreased 49.15 points or 0.74% to 6,548.22, Germany’s DAX decreased 95.3 points or 1.05% to 8,943.67 and France’s CAC decreased 18.96 points or 0.46% to 4,130.87.