Benchmarks continue to reel under pressure on disappointing macro-data

Barometer gauges continue to reel under pressure in absence of any positive trigger at home front combined with mixed regional counterparts, which has dragged both Sensex and Nifty below psychologically crucial 26,600 and 7,950 levels respectively, albeit with slender losses of over one tenth of a percent. However, broader indices, despite the selling pressure, were managing to hold their neck in green, albeit with slender gains.

Mood remained subdued right from the start tracing the weak underlying Asian counterparts that slumped due to continued civil unrest in Hong Kong and a downbeat day on Wall Street sapped confidence. Further, trading in Asia was subdued with China closed for National Day and investors’ warily monitoring Hong Kong's pro-democracy unrest, as thousands of protesters stepped up pressure on the city's pro-Beijing government.

Closer home, sentiment also took a hit after Business activity in Indian manufacturing sector, although improving for the eleventh consecutive month, expanded at its weakest pace in nine months, i.e. since December 2013, for the month of September on account of slow growth in new orders combined with slowdown in output. Meanwhile, in a cause for concern, India’s fiscal deficit crossed half the budget estimate (BE) for 2014-15 in the first three months of the financial year. Fiscal deficit at the end Q1 FY15 was pegged at 56.1% of the budget estimate of Rs 5.31 lakh crore for the full fiscal year as growth in revenue receipts slowed and interest payments rose.

On the BSE, while stocks from Information Technology (IT), Technology and Power counters were capping the losses of the markets, those from Oil & Gas, Fast Moving Consumer Goods and Realty counters were the weak links of trade. Meanwhile, Airline stocks were up after ATF price were cut by an average of nearly 3 percent across cities in India. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1301:1136; while 101 shares remained unchanged.

The BSE Sensex is currently trading at 26590.19, down by 40.32 points or 0.15% after trading in a range of 26550.06 and 26683.70. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index up by 0.02%.

The gaining sectoral indices on the BSE were IT up by 1.81%, TECK up by 1.40%, Power up by 0.31%, Consumer Durables up by 0.16%, INFRA up by 0.03% while, Oil & Gas down by 1.01%, FMCG down by 0.81%, Realty down by 0.73%, Metal down by 0.69%, Bankex down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.37%, TCS up by 2.00%, Infosys up by 1.79%, Hero MotoCorp up by 1.65% and NTPC up by 0.97%. On the flip side, Maruti Suzuki down by 2.56%, Tata Steel down by 2.48%, GAIL India down by 1.74%, ONGC down by 1.45% and ITC down by 1.39% were the top losers.

Meanwhile, in a cause of concern for the Finance Ministry, India’s fiscal deficit crossed half the budget estimate (BE) for 2014-15 in the first three months of the financial year. Fiscal deficit at the end Q1 FY15 was pegged at 56.1% of the budget estimate of Rs 5.31 lakh crore for the full fiscal year as growth in revenue receipts slowed and interest payments rose.

Total expenditure of the government during April-June was Rs 4.13 lakh crore or 23 percent of the entire year estimates. Of the total expenditure, plan spending was Rs 1,11,806 crore and non plan spending was Rs 3,01,797 crore. Conversely, revenue collection during the reported period was Rs 114,427 crore or 9.6 percent of the estimate, lowered than 11.1 percent of the estimates during  2013-14. Furthermore, total receipts (revenue and non-debt capital) of the government during the three months was Rs 1,15,744 crore. Revenue deficit in the three months was recorded at Rs 2,49,358 crore which was 65.9 percent of the estimates.

The government during budget 2014-15 has set fiscal deficit target at 4.1 percent of GDP this year and decided to lower it to 3 percent of GDP by 2016-17. In FY14, India’s fiscal deficit narrowed to Rs 5,08,149 crore or 4.5 percent of GDP as compared to 4.89% of GDP in the FY13. High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

The CNX Nifty is currently trading at 7949.20, down by 15.60 points or 0.20% after trading in a range of 7941.25 and 7977.50. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.40% and TCS up by 2.04% and HCL Tech. up by 2.02% and Infosys up by 1.82% and Power Grid Corpn. up by 1.81%. On the flip side, Jindal Steel & Power down by 3.33%, Tata Steel down by 2.49%, Maruti Suzuki down by 2.46%, GAIL India down by 2.08% and Indusind Bank down by 2.06% were the top losers.

Asian markets were trading mostly lower; with Nikkei 225 sliding by 91.27 points or 0.56% to 16,082.25; KOSPI Index shedding 28.55 points or 1.41% to 1,991.54 and Straits Times edging lower by 9.88 points or 0.3% to 3,266.86. On the flip side, FTSE Bursa Malaysia KLCI trading higher by 0.27 points or 0.01% to 1,846.58; Jakarta Composite rising by 8.3 points or 0.16% to 5,145.88 and Taiwan Weighted advancing by 23.34 points or 0.26% to 8,990.26.