Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions amid a weak trend in global markets. Sentiments took a hit after Growth in India's factory activity slipped in January from December's two-year high as new orders rose at a weaker rate despite factories keeping price increases to a minimum. The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, fell to a three-month low of 52.9 in January from December’s two-year high of 54.5. Besides, investors also remained worried over a huge shortfall in tax deducted at source (TDS) collections, the Central Board of Direct Taxes (CBDT) has asked the income tax department (I-T) to initiate special measures to achieve the collection target for this financial year. However, losses remained capped on report that overseas investors pumped in a staggering Rs 33,688 crore in capital markets last month, making it the highest investment in six months owing to easing inflation and rate cut by Reserve Bank of India (RBI). Meanwhile, broader markets were outperforming the benchmark indices- BSE Midcap and the Smallcap indices were up over 0.60% each.

On the global front, Asian stock markets were mostly lower after Chinese manufacturing weakened and oil went on roller-coaster ride. China’s official purchasing managers’ index signalled the first contraction since 2012, fuelling speculation Asia’s largest economy will need to boost monetary stimulus amid sliding tax receipts. Back home, Indian Rupee weakened by nine paise to 61.95 against the dollar in early trade due to high demand for the US currency from importers.

Back on street, stocks from Capital Goods, IT and Consumer Durables counters were supporting the markets’ uptrend, while those from Banking, FMCG and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of Thermax rose after the company registered a rise of 14.35% in its net profit after tax at Rs 76.2 crore for third quarter ended December 31, 2014 as compared to Rs 66.64 crore for the same quarter in the previous year. On the other hand, Shares of Bajaj Auto have declined, after the company reported 9% year-on-year decline in total sales at 288,746 units in January 2015 as compared to 318,171 units in January 2014. Among other shares, aviation companies have gained after Jet fuel prices have been cut by a steep 11.3% on Sunday bringing further relief to domestic airlines.

The market breadth on BSE was positive, out of 2346 stocks traded, 1402 stocks advanced, while 856 stocks declined on the BSE.

The BSE Sensex is currently trading at 29095.06, down by 87.89 points or 0.30% after trading in a range of 29024.92 and 29158.57. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.12%, IT up by 1.10%, Consumer Durables up by 1.06%, INFRA up by 0.82% and TECK up by 0.76% while, Bankex down by 0.97%, FMCG down by 0.91%, PSU down by 0.34% and Oil & Gas down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.36%, Hindalco up by 2.15%, Maruti Suzuki up by 2.05%, Wipro up by 1.84% and Mahindra & Mahindra up by 1.63%. On the flip side, Coal India down by 2.40%, Dr. Reddys Lab down by 2.23%, Hindustan Unilever down by 2.11%, Bajaj Auto down by 2.07% and Bharti Airtel down by 1.90% were the top losers.

Meanwhile, Government’s decision to update the base year for measuring national accounts resulted in economic growth rate getting revised upwards to 6.9 percent for 2013-14. The economic growth rate for 2012-13 has been revised upwards to 5.1 percent from earlier estimate of 4.5 percent. The previous estimates had put economic growth rate at sub-5 percent level for the past two years.

The Gross Domestic Product (GDP) growth rate for 2013-14 too, following adoption of the new series with base year 2011-12 has gone up by almost 50 percent. The rate of expansion was estimated at 4.7 percent under the old series that had 2004-05 as base year. However, the size of economy marginally declined to Rs 113.45 lakh crore in 2013-14 under the new series from Rs 113.55 lakh crore under the old series. Similarly, the size of the economy in 2012-13 declined under the new series to Rs 99.88 lakh crore from Rs 101.13 lakh crore at current market prices. Also, during 2013-14, contribution of agriculture sector has declined marginally to 18.2 percent in new series from 18 percent with 2004-05 as base year.

The CSO has decided to adopt the international practice of presenting industry-wise estimates as ‘Gross value added at basic prices’ (GVA) hence the new series will also affect a wide range of indicators like trends in public expenditure, taxes and public sector debt that are conventionally analysed in terms of their ratios to nominal GDP. Under the new series, estimates of value added are compiled separately for crops and livestock sector.

The CNX Nifty is currently trading at 8795.60, down by 13.30 points or 0.15% after trading in a range of 8772.15 and 8808.10. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 5.19%, Tech Mahindra up by 2.67%, IDFC up by 2.32%, Hindalco up by 2.15% and Sun Pharma up by 2.13%. On the flip side, Asian Paints down by 5.00%, Bank of Baroda down by 3.88%, Dr. Reddys Lab down by 2.39%, Coal India down by 2.34% and Bajaj Auto down by 2.03% were the top losers.

Asian markets trade in the red; Nikkei 225 decreased 0.69%, Hang Seng slipped 0.28%, Shanghai Composite declined 1.16%, Jakarta Composite shed 0.38%, KOSPI Index dipped 0.09% and FTSE Bursa Malaysia KLCI was down by 0.05%. On the flip side, Taiwan Weighted increased 0.05% and Straits Times was down by 0.46%.