Benchmarks continue to languish into negative territory; broader indices hold head above water

Although bouncing off day’s low, benchmark equity indices continued to languish into negative territory with loss of over three tenths of a percent, which have pulled lower both Sensex and Nifty below the psychologically crucial 27,200 and 8,100 levels respectively. However, broader indices holding up their fort in green with gains in the range of 0.10%-0.40%. Benchmarks have minimized their losses, but the overall sentiment continued to remain downbeat right from the start of trade on account of persistent profit-booking activities by market-participants after markets hit life time high in the previous trading session.

On the global front, Asian pacific shares were mixed on Tuesday as profit-taking and a sharply higher dollar exerted both positive and negative impacts on the region. Meanwhile, European equities edged lower in early trading on Tuesday, with weaker commodity prices impacted by a stronger U.S. dollar expected to hurt mining and energy stocks.

Closer home, most of the sectoral indices on BSE has surrendered to selling pressure, nevertheless prominent losers were the stocks from Information Technology, Realty and Technology counters. Meanwhile, metal shares too fell on caution ahead of the Supreme Court's hearing on 'illegal' coal block allocations, due later in the day. The court on Aug. 25 declared as illegal government allocations of coal blocks since 1993. Besides, Retail stocks such as Koutons Retail, Future Retail, Pantaloons Fashion Retail and Shoppers’ Shop may come under pressure on the bourses as Commerce and Industry Minister Nirmala Sitharaman reiterated that the Government will not allow foreign direct investment in multi-brand retail. On the flip side, stocks from Consumer Durables up by 0.59%, Power and Auto counters were the top gainers of the session. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1430:1274; while 94 shares remained unchanged.

The BSE Sensex is currently trading at 27233.58, down by 86.27 points or 0.32% after trading in a range of 27202.53 and 27328.27. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.11%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.59%, Power up by 0.53%, Auto up by 0.36%, FMCG up by 0.10% and INFRA up by 0.08% while, IT down by 0.93%, Realty down by 0.83%, TECK down by 0.62%, Oil & Gas down by 0.46% and Capital Goods down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.79%, Bharti Airtel up by 1.19%, Tata Motors up by 0.88%, Tata Power up by 0.85% and Coal India up by 0.69%. On the flip side, Bajaj Auto down by 1.66%, Infosys down by 1.42%, ICICI Bank down by 1.19%, ONGC down by 1.15% and Larsen & Toubro down by 1.09% were the top losers.

Meanwhile, confident over the improving macro-economic indicators of the country, Finance Ministry has made a case for international rating agency Moody's to upgrade their sovereign rating of India. Finance Ministry informed Moody's that the Budget 2014-15 has provided an impetus to growth and the government is taking steps to keep the fiscal deficit under check. Indian economy witnessed better than expected growth in Q1FY15 at 5.7% y-o-y as compared to 4.7% growth recorded in same quarter last year and 4.6% in Q4FY14.

Global rating agency Moody's has assigned 'Baa3' rating on India, with stable outlook.  Moody's, rating reflects high domestic savings, adequate foreign exchange reserves and the challenges posed by large fiscal deficits, recurrent inflation and weak infrastructure. However, official of rating agency had expressed concern over about fiscal deficit and the Finance Ministry has sought to comfort them on this front. The Ministry informed that fiscal deficit of the country will contain at 4.1 percent of GDP this year and lower it to 3 percent by 2016-17. The ministry also stated that an Expenditure Management Commission was set up which would look at broad contours of subsidy rationalization and could augur well for fiscal deficit management. On inflation front, the ministry has told the agency that efforts are being taken to keep inflation within the targeted levels and in case if monsoon is below normal and if production is marginally down then country's food stocks are adequate enough to take care of contingency.

The CNX Nifty is currently trading at 8141.95, down by 31.95 points or 0.39% after trading in a range of 8134.40 and 8174.55. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.82%, Bank Of Baroda up by 1.66%, Jindal Steel & Power up by 1.57%, Tata Power up by 1.43% and Bharti Airtel up by 0.99%. On the flip side, DLF down by 1.58%, Bajaj Auto down by 1.58%, Infosys down by 1.56%, Tech Mahindra down by 1.54% and HCL Tech. down by 1.50% were the top losers.

Asian markets were trading mixed; Jakarta Composite decreased 35.95 points or 0.69% to 5,210.54; Shanghai Composite decreased 2.39 points or 0.1% to 2,324.04; FTSE Bursa Malaysia KLCI decreased 0.57 points or 0.03% to 1,870.52. On the flip side, Straits Times increased 9.44 points or 0.28% to 3,344.63; Taiwan Weighted increased 26.83 points or 0.29% to 9,434.77 and Nikkei 225 increased 44.04 points or 0.28% to 15,749.15.

European shares got off to a mostly lower; with Germany’s DAX trading lower by 11.02 points or 0.11% to 9,747.01; France’s CAC edged lower by 3.29 points or 0.07% to 4,471.64 and UK’s FTSE 100 inched up by 4.87 points or 0.07% to 6,839.64.