Markets slip into negative territory in afternoon session

Indian equity benchmarks pared all early gains and slipped into the negative territory in the afternoon session on emergence of fresh selling by funds and retail investors in the front line blue chip stocks. Investors also remained cautious ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) numbers which are due to release tomorrow. Sharp selling witnessed in healthcare, metal and oil and gas stock dragged the major indices down and most of the sectoral indices have entered into red. Though, gains in realty and FMCG stocks provided some support to markets. Further, FIIs capital outflow in the previous session and weak global cues also weighed on sentiments. Coal India and ONGC were in the top losers list as government approved a proposal for diluting equity stake in these blue chip companies. However, broader indices were outperforming the benchmarks with high margin as both mid cap and small cap indices were trading up by over 0.70%. Shares of fertiliser companies were in demand and trading higher by up to 20% on back of heavy volumes in otherwise weak market as the government is planning to bring out a new fertiliser policy for the country to achieve sustainable growth in food production. In stock specific movement, shares of Hathway Cable & Datacom were up nearly 2% at Rs 306 after the board approved preferential allotment of equity shares to CLSA Global Market.

On global front, Asian markets were trading mixed with Nikkei 225 up by 0.74% and Hang Seng down 0.29% as global sentiment was dampened due to growing concerns over slower China’s economic growth and speculation that the Fed may increase the interest rates sooner-than-expected. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,100 and 27,000 levels respectively. The market breadth on BSE was positive, out of 2,811 stocks traded, 1,692 stocks advanced, while 1,015 stocks declined on the BSE.

The BSE Sensex is currently trading at 26959.16, down by 98.25 points or 0.36% after trading in a range of 26904.50 and 27150.78. 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 0.72%, while Small cap index up by 0.77%.

The gaining sectoral indices on the BSE were Realty up by 0.82%, INFRA up by 0.55%, FMCG up by 0.47%, Capital Goods up by 0.30% and Bankex up by 0.25%. On the other hand, Metal down by 0.94%, Oil & Gas down by 0.61%, PSU down by 0.50%, Auto down by 0.49% and Consumer Durables down by 0.49% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.39%, SBI up by 0.86%, HDFC up by 0.54%, Hindalco up by 0.52% and Axis Bank up by 0.46%. On the flip side, Sun Pharma Inds down by 4.25%, Coal India down by 3.50%, ONGC down by 1.86%, Wipro down by 1.43% and Mahindra & Mahindra down by 1.40% were the top losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD), in its annual statement, has stated that Indian economy will grow at a rate of 5.6 percent in 2014. However, the council noted that if India maintains status quo in terms of fiscal policies, the gross domestic product growth rate would increase only to about 6 percent by 2020-24, lower than 9.4 percent growth recorded in 2006-07.

The report suggested that with the implementation of industrial policies to promote private investment, regulation of finance and capital controls and development-oriented trade agreements, India’s GDP growth could touch 7.9 percent in future. After two years of sluggish growth, Indian economy has shown sign of recovery and grew by 5.7% during Q1FY15 as compared to 4.7% growth recorded in Q1FY14.

On global front, the UNCTAD forecasted that developing economies are likely to repeat the performance of previous years, growing at between 4.5 and 5 percent in 2014. The UNCTAD stated that China would continue to outperform India’s economic growth and project a growth of 6.7 percent for 2020-24 in a business-as-usual scenario.

The report also warned the developing countries about the risk of pursuing export-led growth strategies and suggested that developing countries should focus on domestic and regional demands for continued and sustainable growth. Furthermore, slowdown in developed countries and a reduced elasticity of their demand for imports from developing countries could hurt growth of countries pursuing export-led growth strategies.

The CNX Nifty is currently trading at 8074.05, down by 20.05 points or 0.25% after trading in a range of 8057.30 and 8127.95. There were 20 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were IDFC up by 3.14%, Bank of Baroda up by 1.80%, Hindustan Unilever up by 1.53%, PNB up by 1.17% and BPCL up by 1.11%. On the flip side, Sun Pharma Inds down by 4.21%, Coal India down by 3.39%, ONGC down by 1.90%, Mahindra & Mahindra down by 1.52% and Tech Mahindra down by 1.41% were the top losers.

Asian markets were trading in mixed, Straits Times up by 8.3 points or 0.25% to 3,346.93, Jakarta Composite up by 24.34 points or 0.47% to 5,167.33 and Nikkei 225 up by 116.91 points or 0.74% to 15,905.69. While, Hang Seng down 70.88 points or 0.29% to 24,634.48, Taiwan Weighted down 34.66 points or 0.37% to 9,322.95, KOSPI Index down 15.25 points or 0.74% to 2,034.16 and Shanghai Composite down 12.21 points or 0.53% to 2,306.09.