Markets continue to trade in red amid selling in realty stocks

Indian equity benchmarks continue to trade in negative territory in the afternoon session as sharp selling appeared in the realty stocks amid mixed Asian cues. Realty stocks plunged nearly 8 per cent, after market regulator SEBI barred DLF from tapping the capital markets for three years for 'active and deliberate suppression' of material information at the time of its IPO. Besides, selling in metal, IT and teck stocks also dragged the major indices down. Further, foreign investors capital outflow in the previous session coupled with the depreciation in rupee value against the dollar also added to the pessimistic sentiments. However, some support to domestic benchmarks came in from the gains in power, capital goods and infra stocks. Sentiments got some support as RBI Governor Raghuram Rajan exuded optimism that Indian economy will be in the 5% growth bracket during the course of this fiscal and accelerate further to 6% growth range in the next financial year. In scrip specific development, Sun TV Network slipped to a 52-week low of Rs 311.75 on account of slowing advertising revenues, increasing competition and overhang of the CBI charge-sheet against the company's promoter.

On global front, Asian markets were trading mixed with Taiwan Weighted up 0.65% and Nikkei 225 down 2.25%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,850 and 26,300 levels respectively. The market breadth on BSE was negative, out of 2,461 stocks traded, 1,137 stocks advanced, while 1,223 stocks declined on the BSE.

The BSE Sensex is currently trading at 26291.69, down by 92.38 points or 0.35% after trading in a range of 26212.01 and 26550.79. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index up by 0.27%.

The gaining sectoral indices on the BSE were Power up by 0.45%, Capital Goods up by 0.33%, INFRA up by 0.21%. On the flip side, Realty down by 7.96%, Metal down by 1.53%, IT down by 0.84%, TECK down by 0.58% and FMCG down by 0.46% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.21%, Bajaj Auto up by 2.99%, SBI up by 1.39%, Axis Bank up by 1.36% and Bharti Airtel up by 1.30%. On the flip side, Sesa Sterlite down by 4.26%, HDFC down by 1.57%, Tata Steel down by 1.56%, ITC down by 1.31% and TCS down by 1.23% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) governor Raghuram Rajan has exuded optimism that Indian economic growth will be in the 5% growth bracket during the course of this fiscal and accelerate further to 6% growth range in the next financial year. However, the governor stressed that Indian economic recovery is still uneven. The RBI governor also added that beyond 2016, Indian economy will grow depending on what the country does over these couple of years.

On the issue of the US Fed rate hike, the RBI Governor has asserted that there is no concern for India about any interest rate hike by Federal Reserve, underscoring that the country has enough foreign exchange reserves. If the US Federal Reserve decides to raise interest rates, there would be some volatility in emerging markets but strong growth in the United States is good for the world economy.

Raghuram Rajan also highlighted the need of necessary measures to expedite the execution of approved infrastructure projects and correct the problem in country’s coal and gas sectors.

Indian economic growth stayed below 5% for the second year in a row at 4.7% during FY14. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the economy has shown signs of nascent recovery during the first quarter of current fiscal. India’s economy expanded at its fastest pace in more than two years by 5.7% during the April-June quarter of current fiscal as compared to 4.7% growth recorded in same quarter last year.

The CNX Nifty is currently trading at 7853.05, down by 31.20 points or 0.40% after trading in a range of 7825.45 and 7928.00. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.21%, Bajaj Auto up by 3.21%,  Bharti Airtel up by 1.51%, Indusind Bank up by 1.43% and Axis Bank up by 1.40%. On the flip side, DLF down by 25.63%, Sesa Sterlite down by 4.06%, Jindal Steel & Power down by 3.36%, NMDC down by 2.31% and Cairn India down by 2.09% were the top losers.

Most of the Asian markets were trading in red, Straits Times up by0.62 points or 0.02% to 3,202.77, KOSPI Index up by2.04 points or 0.11% to 1,929.25, Jakarta Composite up by 10.08 points or 0.21% to 4,923.14, Hang Seng up by22.14 points or 0.1% to 23,165.52 and Taiwan Weighted up by57 points or 0.65% to 8,768.39. On the other hand, Nikkei 225 down 344.26 points or 2.25% to 14,956.29 and Shanghai Composite down 8.99 points or 0.38% to 2,357.02.