Benchmarks extend losses; Power, PSU drag

Indian equity benchmarks extended losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. India’s economy likely grew at its fastest in two years between April and June, according to a poll, as sentiment improved after Narendra Modi’s election victory in the middle of the quarter coincided with a rebound in investment, manufacturing and construction, however this has failed to add some enthusiasm on the street. Traders were seen piling up positions in FMCG, IT and TECK while selling was witnessed in Power, PSU and Infra sector stocks. In scrip specific development, Havells India, the maker of electrical equipment, was trading firm post stock-split touching one-year high in a subdued market.

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 7,900 and 26,400 levels respectively. The market breadth on BSE was negative in the ratio of 898:1948 while 106 scrips remained unchanged.

The BSE Sensex is currently trading at 26334.34, down by 102.68 points or 0.39% after trading in a range of 26314.89 and 26481.97. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.78%, while Small cap index down by 1.30%.

The gaining sectoral indices on the BSE were FMCG up by 0.64%, IT up by 0.46%, TECK up by 0.19% while, Power down by 2.28%, PSU down by 1.97%, INFRA down by 1.68%, Capital Goods down by 1.56%, Oil & Gas down by 1.46% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.74%, Hindalco up by 1.49%, Sun Pharma up by 1.37%, Hindustan Unilever up by 1.30% and GAIL India up by 1.24%. On the flip side, Tata Power down by 3.65%, ONGC down by 3.46%, BHEL down by 2.55%, Larsen & Toubro down by 1.78% and Maruti Suzuki down by 1.58% were the top losers.

Meanwhile, with an aim to enhance the country’s exports, the government will revive the export interest subsidy scheme, which expired in March 2014. It has already made budgetary provision of over Rs 1,600 crore for the export interest subsidy.

Commerce ministry is presently in discussion with the finance ministry and selecting the sectors that would be covered by the scheme in the new five-year policy expected to be announced at the end of September.

The Foreign Trade Policy (FTP), which governs all exports and imports related activities in India, ended on March 31 and the new government will introduce new FTP for the period 2014-19 in September 2014. In the previous trade policy, the benefit of interest subsidy was earlier available to sectors such as micro small and medium enterprises, handlooms, handicraft, carpets, toys, sports goods, processed products, certain engineering and textiles goods. The export interest subsidy helped increase the competitiveness of goods on global level.

The new FTP is likely to promote exports of specific products in specific geographies, job-creating manufacturing sectors and would also abolish conventional method of exports by focusing more on areas like branding of products in the global markets, exports of services and hi-tech products and new strategy for marketing.

The CNX Nifty is currently trading at 7873.75, down by 32.55 points or 0.41% after trading in a range of 7864.40 and 7915.45. There were 19 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.09%, Tata Steel up by 1.99%, United Spirits up by 1.88%, Hindalco up by 1.85% and Hindustan Unilever up by 1.35%. On the flip side, Jindal Steel & Power down by 7.67%, Tata Power down by 3.76%, ACC down by 3.51%, ONGC down by 3.45% and IDFC down by 3.27% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 92.41 points or 0.37% to 25,074.50, Nikkei 225 decreased 92.03 points or 0.59% to 15,521.22, Jakarta Composite decreased 29.38 points or 0.57% to 5,155.58, Shanghai Composite decreased 22.17 points or 0.99% to 2,207.11, Straits Times decreased 6.61 points or 0.2% to 3,323.67 and FTSE Bursa Malaysia KLCI decreased 1.14 points or 0.06% to 1,861.17.

On the other hand, Taiwan Weighted increased 3.34 points or 0.04% to 9,393.96 and KOSPI Index increased 7.16 points or 0.35% to 2,068.05.

The European Markets were too trading mostly in red; Germany’s DAX decreased 33.76 points or 0.35% to 9,476.38, France’s CAC decreased 2.33 points or 0.05% to 4,339.78 while, UK’s FTSE 100 increased 25.41 points or 0.38% to 6,800.66.