Benchmarks trade slightly in red on feeble global cues

Indian equity benchmarks have made a cautious start and are trading slightly in the red in early deals on Thursday on the back of feeble global cues. The US markets ended modestly lower in last session, though the major averages were well off worst levels reached intraday. Traders reacted negatively to a report from the Commerce Department showing a drop in housing starts and release of the minutes of the Federal Reserve’s October monetary policy meeting, which suggested that the central bank was not worried about the sharp pullback seen on Wall Street. Moreover, most of the Asian markets were trading in red at this point of time after the preliminary Chinese PMI in November came at 6 month low. However, the Japanese market was trading higher as the yen weakened against the dollar.

Back home, investors remained cautious ahead of the winter session of parliament which begins next week and RBI’s policy review due on December 2, 2014. Sentiments remained dampened on the back of depreciation in Indian rupee. The rupee fell to as low as 62.13 on Thursday, its lowest since March 4. The Indian unit was last trading at 62.1150 versus previous close of 61.96/97. Meanwhile, the board of Securities and Exchange Board of India (Sebi) has cleared big-bang market reforms, including a move to replace the two-decade-old insider-trading rules with the new prohibition of insider trading (PIT) regulations, and amending the existing delisting regulations.

On the sectoral front, software, fast moving consumer goods and technology witnessed the maximum gain in trade, while consumer durables, realty and power 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 910 shares on the gaining side against 1,054 shares on the losing side while 68 shares remain unchanged.

The BSE Sensex opened at 28100.84; around 30 points higher as compared to its previous closing of 28032.85, and has touched a high and a low of 28118.53 and 27969.57 respectively. The BSE Sensex is currently trading at 27996.40, down by 36.45 points or 0.13%. There were 11 stocks advancing against 18 stocks declining on the index.

The overall market breadth remained in the favour of decliners with 44.78% stocks advancing against 51.87% declines. The broader indices were trading in the red; the BSE Mid cap index was down by 0.21%, while Small cap index down by 0.07%.

The gaining sectoral indices on the BSE were IT up by 0.45%, FMCG up by 0.35%, TECK up by 0.29%, PSU up by 0.06% and Healthcare up by 0.02% while, Consumer Durables down by 1.41%, Realty down by 0.91%, Power down by 0.78%, Capital Goods down by 0.61% and Auto down by 0.56% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.00%, ONGC up by 1.09%, Coal India up by 0.91%, Dr. Reddys Lab up by 0.72% and Infosys up by 0.67%. On the flip side, BHEL down by 1.67%, Hero MotoCorp down by 1.60%, HDFC Bank down by 1.47%, Tata Motors down by 1.12% and Mahindra & Mahindra down by 1.01% were the top losers.

Meanwhile, Raghuram Rajan, the governor of India’s Apex Bank, which is under corporate and government pressure to bring down interest rates and boost economic growth, recently underscored that country should focus on achieving sustainable economic growth and also suggested developed economies of doing the same. He further added that economies across the world should focus on sensible, sustainable sources of growth.

India's economy has grown at less than 5% for the last two years and picked up some momentum to grow 5.7% in the June quarter, but this figure is still way below the near double-digit growth last seen in 2008.

Notably, RBI’s governor’s comments come just a day after Finance Minister Arun Jaitley, pitching for a rate cut, underscored that lower cost of capital would provide a good fillip to the economy. He nudged Reserve Bank of India to cut interest rates to boost growth at a time when inflation, especially food inflation had come down substantially over the past few months and global fuel prices ebbed to four-year low.

Cajoling India’s apex bank, FM averred that RBI, which is a highly professional organization, if in its wisdom decides to cut down interest rates then this will give a good impetus to the Indian economy. However, Rajan has been focused on achieving 6% inflation by January 2016 and has often emphasized that sustained economic growth requires inflation to fall and stay low.

Nevertheless, in order to cut down on growing clamor of rate cut, RBI Deputy Governor S S Mundra emphasized the central bank revises rate, but not on 'popular demand' and further stated that it only does when there is a clear conviction in doing so.

The CNX Nifty opened at 8,406.50; around 24 point higher as compared to its previous closing of 8,382.30, and has touched a high and a low of 8,410.10 and 8,366.55 respectively.

The CNX Nifty is currently trading at 8376.50, down by 5.80 points or 0.07%. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 5.70%, SBI up by 1.99%, ONGC up by 1.13%, Asian Paints up by 0.91% and Infosys up by 0.83%. On the flip side, BHEL down by 1.69%, Ambuja Cement down by 1.55%, Hero MotoCorp down by 1.52%, Power Grid Corpn. down by 1.40% and HDFC Bank down by 1.35% were the top losers.

Asian markets were trading mostly in the red; Jakarta Composite declined 50.7 points or 0.99% to 5,077.23, Straits Times decreased 11.69 points or 0.35% to 3,322.87, KOSPI Index dropped 11.2 points or 0.57% to 1,955.67, FTSE Bursa Malaysia KLCI slipped 3.38 points or 0.19% to 1,821.01 and Shanghai Composite was down by 2.34 points or 0.1% to 2,448.65.

On the other hand, Hang Seng rose 15.64 points or 0.07% to 23,388.95, Nikkei 225 increased 30.9 points or 0.18% to 17,319.65 and Taiwan Weighted was up by 105.35 points or 1.18% to 9,068.59.