Selling intensifies on Dalal Street in early noon deals

Indian equity benchmarks failed to sustain their initial momentum and tumbled below their psychological 28,650 (Sensex) and 8,700 (Nifty) levels due to profit-taking by funds and retail investors despite firm global cues and fresh capital inflows. Depreciation in Indian rupee too dampened the sentiments. The rupee depreciated by 16 paise to 62.66 against the US currency in noon trade due to fresh dollar buying by banks and importers as well as a weak local equity market. Meanwhile, retail inflation rose to a four-month high of 5.37 per cent in February, largely due to a spike in the prices of vegetables and pulses.

On the global front, Asian shares were trading mostly in the green at this point of time, underpinned by overnight gains on Wall Street, while the dollar steadied after its recent rally ran out of steam on disappointing retail sales data. Japanese Nikkei stock average was trading higher ahead of Friday’s settlement for Nikkei futures and options contracts expiring in March. Investors with long positions in Nikkei futures would like to see them settle at a higher price.

Back home, none of the sectoral indices were trading in the green. While capital goods and FMCG witnessed the maximum losses in trade, banking, auto, realty, healthcare and and software too lost significantly. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 864 shares on the gaining side against 1567 shares on the losing side while 99 shares remain unchanged.

The BSE Sensex is currently trading at 28609.58, down by 320.83 points or 1.11% after trading in a range of 28577.36 and 29183.76. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.41%, while Small cap index down by 0.45%.

The losing sectoral indices on the BSE were Capital Goods down by 1.47%, FMCG down by 1.41%, Bankex down by 1.39%, Auto down by 1.29%, Realty down by 1.05%, while there were no gainers on the index.

The top gainers on the Sensex were Coal India up by 0.45%, ONGC up by 0.45% and NTPC up by 0.19%. On the flip side, Axis Bank down by 2.56%, Bajaj Auto down by 2.45%, Sun Pharma down by 2.12%, Larsen & Toubro down by 1.95% and BHEL down by 1.90% were the top losers.

Meanwhile, State Bank of India (SBI) in the latest report by its economic research department has said that India’s current account deficit (CAD) is expected to come down to $ 25 billion, or 1.2 percent of GDP, in the current financial year, though it has cautioned that it could widen next fiscal on the back of pick up in the Indian economy. The report said that “We expect, FY15 CAD to narrow down further to below $ 25 billion or 1.2 percent of GDP. FY16 may see the CAD widening close to 2 percent of GDP, with the economy picking up.”

CAD, the difference between the inflow and outflow of foreign exchange, has narrowed to 1.7 percent of the GDP for the first nine months of the current fiscal, driven down by lower oil prices and higher services exports that offset the dip in merchandise shipments. CAD in the last fiscal stood at $ 32.4 billion, or 1.7 percent of the GDP, while it hit a record high of $88 billion, or 4.7 percent of the GDP, in 2012-13.

The CAD narrowed to $ 8.2 billion or 1.6 percent of GDP in Q3 FY15 from $ 10.1 billion or 2.0 percent of GDP in Q2. The report has said that the softening of the CAD in Q3 FY15 was primarily on account of net exports of services, which picked up on the back of an improvement in net earnings through travel and software services, and lower net outflows under primary income (profit, dividend and interest).

The report from the leading public sector lender further stated that net portfolio capital inflows in FY15 have crossed $ 44 billion (by 11 March, 2015) and net direct investment reached $ 30.3 billion in the first 10 months of FY15. Moreover, net FII and FDI inflow have crossed $73 billion in FY15, highest inflow ever since FY91.

The CNX Nifty is currently trading at 8679.50, down by 96.50 points or 1.10% after trading in a range of 8671.00 and 8849.75. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were PNB up by 1.11%, Coal India up by 0.56%, Asian Paints up by 0.36%, ONGC up by 0.26% and NTPC up by 0.06%. On the flip side, Jindal Steel & Power down by 2.72%, Axis Bank down by 2.41%, Bajaj Auto down by 2.28%, Zee Entertainment down by 2.20% and Sun Pharma down by 2.17% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI increased 0.07 points or 0% to 1,786.94, Shanghai Composite rose 12.1 points or 0.36% to 3,361.43, KOSPI Index gained 15.2 points or 0.77% to 1,985.79, Hang Seng added 54.5 points or 0.23% to 23,852.46 and Nikkei 225 was up by 263.14 points or 1.39% to 19,254.25. On the flip side, Taiwan Weighted decreased 16.65 points or 0.17% to 9,579.35, Jakarta Composite shed 13.19 points or 0.24% to 5,426.65 and Straits Times was down by 7.67 points or 0.23% to 3,365.93.