Benchmarks trade lower in early deals on sluggish global cues

Snapping five days' winning streak, Indian equity benchmarks have made a cautious start as investors opted to book some of their profits after a slew of rallies amid sluggishness in other global markets. Meanwhile, there is a report of World Economic Forum (WEF), which has ranked India among the worst-ranked countries when it comes to taxation and inflation burden on economy. As per the report, India ranks 133rd in terms of inflation, 130th for taxes and 131st for starting a business, while India has slipped to 71st position -- the lowest among BRICS countries, in global competitiveness list.

On the global front, the US markets made another mixed closing in the last session, though there were some initial gains on easing geopolitical concerns, but traders seemed reluctant to continue buying stocks ahead of the European Central Bank's monetary policy announcement. The Asian markets were trading mostly in the red at this point of time with many of the indices retreating from a one-month high before central banks in Japan and Europe decide monetary policy.

Back home, on the sectoral front, fast moving consumer goods witnessed the maximum gain in trade, while realty, consumer durables and capital goods remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 890 shares on the gaining side against 1098 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 27164.95; around 25 points higher as compared to its previous closing of 27139.94, and has touched a high and a low of 27148.90 and 27067.02 respectively. The BSE Sensex is currently trading at 27096.82, down by 43.12 points or 0.16%. There were 8 stocks advancing against 22 stocks declining on the index.

The overall market breadth remained in the favour of decliners with 43.39% stocks advancing against 53.53% declines. The broader indices were trading in red; the BSE Mid cap index was down by 0.14%, while Small cap index down by 0.20%.

The only gaining sectoral indices on the BSE were FMCG up by 0.47% while, Realty down by 2.47%, Consumer Durables down by 1.57%, Capital Goods down by 0.66%, Power down by 0.63%, Infrastructure down by 0.58% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.05%, Hindustan Unilever up by 1.06%, Hero MotoCorp up by 0.97%, Sun Pharma Industries up by 0.93% and ITC up by 0.59%. On the flip side, BHEL down by 3.26%, Tata Motors down by 1.61%, Hindalco down by 1.46%, GAIL India down by 0.91% and Infosys down by 0.87% were the top losers.

Meanwhile, concerned over the rising cases of willful defaulters, Finance Ministry has asked the Reserve Bank of India (RBI) to tighten lending norms to prevent borrowers from opening multiple current accounts outside their consortium banks. Currently, there has been a spate of defaults taking place in banking system and majority of them are on account of economic recession but there is small proportion of cases where defaults are intentional.

Ministry is of the view that defaulting borrowers are indulged in diversion of funds by opening of multiple current accounts outside the members of the consortium. Finance Ministry has suggested the central bank to tighten the norms and monitoring system so that such activities could be prevented. Ministry had also ordered limited forensic audit of some non-performing accounts of public sector banks to find out whether there were any irregularities in sanction of loans.

Banking is the most dominant segment of the country’s financial sector and plays an imperative role in the economic development of the country. Increasing NPAs have become a major concern for industry adversely impacting the profit margin of banks. Gross NPAs of public sector banks increased to Rs 2,27,264 crore at the end of March 2014. Five key sectors include infrastructure, textiles, iron and steel, mining and aviation services contributed significantly to the level of stressed advances.

The CNX Nifty opened at 8,114.20; marginally lower as compared to its previous closing of 8,114.60, and has touched a high and a low of 8,114.80 and 8,081.00 respectively.

The CNX Nifty is currently trading at 27096.82, down by 43.12 points or 0.16%. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.96%, Hindustan Unilever up by 1.32%, Hero MotoCorp up by 1.32%, Asian Paints up by 1.20% and Lupin up by 1.07%. On the flip side, DLF down by 4.98%, BHEL down by 2.98%, Jindal Steel & Power down by 2.77%, Tata Motors down by 1.67% and Indusind Bank down by 1.63% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 dropped by 38.77 points or 0.25% to 15,689.58, FTSE Bursa Malaysia KLCI declined by 1.29 points or 0.07% to 1,863.58, Taiwan Weighted slipped by 33.20 points or 0.35% to 9,416.90, Straits Times was decreased 9.03 points or 0.27% to 3,339.74 and Hang Seng was down by 86.64 points or 0.34% to 25,231.3.

On the flip side Jakarta Composite increased by 6.54 points or 0.13% to 5,230.68, KOSPI Index gained by 4.92 points or 0.24% to 2,056.12,and Shanghai Composite was up by 5.88 points or 0.26% to 2,294.51.