Benchmarks extend early losses; trade near intra-day low level

Indian bourses added losses to continue their weak trade in the late afternoon session hovering near the lowest point of the day due to the profit booking in frontline blue chip stocks such as Tata Power, Bharti Airtel and NTPC among others. Sharp selling in consumer durables, metal and power stocks dragged down the major indices, moreover weak Asian cues also put pressure on the domestic benchmarks. Most of the major sectoral indices were trading in red with consumer durables as top losing index trading down by over 1%. Sentiments got a hit as current account deficit widened to $10.1 billion or 2.1% of GDP in July-September quarter as compared to1.2% of GDP a year-ago period. Investors did not pay heed to announcements of global research organizations including OECD and Fitch which stated that India may witness strong growth in the coming future. Meanwhile, insurance related company stocks were trading in green after the Parliamentary Select Committee gave its recommendations on amendments to the Insurance Act that seeks to raise foreign direct investment (FDI) cap to 49%. In stock specific movement, shares of Drug majors Sun Pharma and Ranbaxy Labs are up 1% and 3% respectively after the CCI approved the proposed merger, which will result in a combined entity with annual sales worth $4.3 billion, making it the fifth-largest generic drug maker globally.

On global front, most of the Asian markets were trading in red with Shanghai Composite down 0.79% and Jakarta Composite down 0.17% following a decline on Wall Street. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,400 and 28,500 levels respectively. The market breadth on BSE was positive, out of 2,540 stocks traded, 1,185 stocks advanced, while 1,242 stocks declined on the BSE.

The BSE Sensex is currently trading at 28030.94, down by 88.46 points or 0.31% after trading in a range of 28016.49 and 28157.53. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.03%, while Small cap index up by 0.08%.

The gaining sectoral indices on the BSE were Realty up by 0.60%, IT up by 0.25% and TECK up by 0.13%. On the flip side, Consumer Durables down by 1.14%, Metal down by 1.05%, Power down by 1.00%, FMCG down by 1.00% and Capital Goods down by 0.65% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds up by 1.16%, TCS up by 0.93%, GAIL India up by 0.77%, Dr. Reddys Lab up by 0.68% and HDFC Bank up by 0.59%. On the flip side, Tata Power down by 1.85%, Bharti Airtel down by 1.73%, NTPC down by 1.71%, Sesa Sterlite down by 1.65% and Hindalco down by 1.29% were the top losers.

Meanwhile, Global credit rating agency Fitch, in its latest Global Economic Outlook, has highlighted that India will be the only BRIC country where growth picks up in 2014 to 5.6% and further accelerates to 6.5 % in 2015 and 6.8 % in 2016, owing to the government's reforms to improve the business environment.

After registering an average growth rate of 8% during FY08-FY12, Indian economic growth had slowed down to below 5% over the last two financial years. 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 and expanded at 5.5% during first half of this fiscal as compared to 4.9% in the same period of previous fiscal.

On RBI's monetary policy, Fitch stated that policy might become more accommodate in 2015 due to lower inflation, which would support GDP growth. A new monetary policy framework resulting from discussions between government and RBI could contribute to a credible low inflation environment in the future.

On global front, the rating agency noted that global growth is uneven, but it will strengthen in 2015 and 2016. As world recovery is increasingly dependent on the US growth engine, a buoyant US economy is the main engine of global growth. Fitch expects that China's slowdown is structural and GDP growth is likely to moderate to 7.3% in 2014, 6.8% in 2015 and 6.5% in 2016.

The CNX Nifty is currently trading at 8405.95, down by 32.30 points or 0.38% after trading in a range of 8401.80 and 8444.50. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds up by 1.23%, TCS up by 0.95%,  DLF up by 0.81%, Dr. Reddys Lab up by 0.64% and Bajaj Auto up by 0.64%. On the flip side, ACC down by 2.36%, Jindal Steel & Power down by 2.25%, Cairn India down by 1.88%, Tata Power down by 1.80% and Bharti Airtel down by 1.77% were the top losers.

Most of the Asian markets were trading in red, Straits Times up by 28.48 points or 0.86% to 3,326.32. While, Hang Seng down 348 points or 1.45% to 23,699.67, Nikkei 225 down 145.96 points or 0.81% to 17,789.68, Taiwan Weighted down 58.39 points or 0.64% to 9,128.90, Shanghai Composite down 23.88 points or 0.79% to 2,996.38, Jakarta Composite down 8.69 points or 0.17% to 5,135.33, KOSPI Index down 8 points or 0.4% to 1,970.95 and FTSE Bursa Malaysia KLCI down 3.62 points or 0.21% to 1,737.22.