Markets extend the weakness with a soft start

Indian bourses following the other global markets have made a soft start and despite some recovery attempt were finding it difficult to hold in green terrain on Tuesday morning. In last session markets have witnessed their biggest fall in nearly two months on the back of the Infosys founders reducing their stakes in the company and weak global cues. Even today there was hardly any supportive cue, rather the trade was being pressured with reports of India's current account deficit (CAD) gap widening sharply to $10.1 billion in the second quarter of FY15 due to high gold imports. Rupee too has made a mildly soft start, though rising deficit may not have a major impact on the value of the rupee since foreign capital flows have more than made up for the trade deficit. On the sectoral front the IT and tech sector stocks have bounced back and were helping the markets in recovery, aided by weak rupee. On the other hand the power and steel stocks were weighed down by the report that the coal ministry is looking at a floor price of not less than Rs 150 per tonne for auctioning coal mines to steel, cement as well as captive power plants and a reserve price of Rs 100 a tonne for mines to be allotted to government companies and power stations through the reverse auction method. 

The BSE Sensex is currently trading at 28101.47, down by 17.93 points or 0.06% after trading in a range of 28056.87 and 28157.53. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index was higher by 0.29%.

The gaining sectoral indices on the BSE were Realty up by 0.70%, IT up by 0.63%, TECK up by 0.53%, Bankex up by 0.17% while, FMCG down by 0.83%, Metal down by 0.81%, Capital Goods down by 0.54%, Power down by 0.53%, Consumer Durables down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.33%, TCS up by 1.17%, Sun Pharma Inds. up by 1.07%, ICICI Bank up by 0.65% and HDFC Bank up by 0.49%. On the flip side, ITC down by 1.22%, ONGC down by 1.13%, BHEL down by 1.09%, NTPC down by 1.07% and Sesa Sterlite down by 1.01% were the top losers.

Meanwhile, with an aim to contain the fiscal target at 4.1% of GDP for current fiscal, Finance Minister Arun Jaitley has asserted that the government will come out with more measures  to rationalise subsidies. Finance Minister stressed that a series of meeting with the Expenditure Management Commission (EMC) has been taking place and the Commission is effectively working on some very valuable suggestions with regard to rationalisation of subsidies. 

Highlighting the government’s latest decisions, the minister added latest decision to link the diesel prices with market price and direct cash subsidy on pilot basis to LPG customers in select cities will help in reducing the subsidy burden of the government. Furthermore, the Centre had set up a Commission under former RBI Governor Bimal Jalan to suggest steps to lessen subsidy and help the government in effectively bringing down the fiscal deficit. On revenue collection front, the minister expressed hope that the government will able to achieve the direct tax collection target. To garner more funds, the government has initiated its disinvestment programme with latest SAIL's stake sale. It has set a target of Rs 43,425 crore through selling stakes in various PSU firms during the current fiscal.

The government’s fiscal deficit for the first seven months of this financial year recorded at Rs 4.76 lakh crore, a staggering 89.6% of the target of Rs 5.31 lakh crore for the entire financial year. The fiscal deficit for the April-October period this year was the highest since at least 1998-99 and for the corresponding period of 2013-14, the fiscal deficit was stood at 84.4% of the FY14 target.

The CNX Nifty is currently trading at 8434.65, down by 3.60 points or 0.04% after trading in a range of 8418.45 and 8444.50. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds up by 1.36%, TCS up by 1.28%, Dr. Reddys Lab up by 1.07%, Mahindra & Mahindra up by 0.79%, ICICI Bank up by 0.78%. On the flip side, ACC down by 1.27%, Ultratech Cement down by 1.25%, Cairn India down by 1.24%, ITC down by 1.21% and ONGC down by 1.17% were the top losers.

Asian markets were mostly in red, barring Straits Times which was up by 30.47 points or 0.92% to 3,328.31 and Shanghai Composite gaining 37.48 points or 1.24% to 3,057.74.

On the other hand, Hang Seng slumped by 220.3 points or 0.92% to 23,827.37, Nikkei 225 declined by 124.85 points or 0.7% to 17,810.79, Taiwan Weighted lost 43.78 points or 0.48% to 9,143.51, Jakarta Composite was down by 7.43 points or 0.14% to 5,136.59, KOSPI Index decreased 6.83 points or 0.35% to 1,972.12 and FTSE Bursa Malaysia KLCI was lower by 5.27 points or 0.3% to 1,735.57.