Markets continue to trade lower on sustained selling pressure; Nifty holds above 8650 mark

Local equity markets continued to trade lackluster in absence of any positive trigger which could lift the markets higher on sustained profit-booking activities by market-participants after disappointing earnings of IT major, TCS. Shares of the country’s largest software exporter TCS fell by over 4 per cent after the company reported a 27% dip in its March quarter net profit, impacted by a one-time Rs 2,628-crore employee bonus. However, recovery which came from day’s low point, aided both Sensex and Nifty to trade above psychologically crucial 28,550 and 8,650 levels respectively, albeit with losses of around 0.30%. Meanwhile, the session also was harrowing for broader indices, which went home with losses in the range of 0.40-0.75%.

On the global front, in Asia pacific region stock markets in China and Hong Kong extended gains on Friday on expectations of further policy easing, but other stock markets in the region were subdued. Stocks in Shanghai and Hong Kong continued their gains after data showed that China's economy grew at the slowest pace since 2009 during the first quarter. The report stoked expectations that the country would introduce further stimulus measures to achieve growth target.

Closer home, most of the sectoral indices on BSE were trading into negative territory, however stocks from IT, TECk and Banking counters were the top losers of the session. While disappointing earnings from TCS spelled pessimism across IT stocks, profit-booking took a toll over banking stocks. On the flip side, buying witnessed by stocks from Metal, PSU and FMCG counters were the top gainers of the session. The overall market breadth on BSE was trading in the favour of declines which thumped advances in the ratio of 1148:881; while 29 shares remained unchanged.

The BSE Sensex is currently trading at 28559.70, down by 106.34 points or 0.37% after trading in a range of 28515.30 and 28696.19. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.75%, while Small cap index down by 0.41%.

The gaining sectoral indices on the BSE were Metal up by 1.74%, PSU up by 0.47%, FMCG up by 0.20%, Power up by 0.11% and Oil & Gas up by 0.03% while, IT down by 1.77%, TECK down by 1.71%, Bankex down by 0.83%, Realty down by 0.34% and INFRA down by 0.31% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.32%, Sesa Sterlite up by 3.16%, Hindalco up by 2.77%, NTPC up by 1.15% and BHEL up by 1.01%. On the flip side, TCS down by 3.84%, Sun Pharma Inds. down by 2.68%, Wipro down by 2.15%, Bharti Airtel down by 1.75% and GAIL India down by 1.38% were the top losers.

Meanwhile, barely few days after the Prime Minister announced higher compensation for damaged crops, the Reserve Bank of India (RBI) underscored that a new scheme for interest subvention for farmers was on the anvil and would be revealed anytime soon. In the meanwhile, the earlier interest subvention scheme will continue till June 30, 2015. Reserve bank of India unveiled that Government of India was presently examining various alternative approaches for improving the efficacy of the scheme and that finalization may take some time.

Under 2014-15 scheme, interest subvention of 2% per annum is available to all commercial banks on their own funds used for short-term crop loans up to Rs 3 lakh per farmer provided the lending institutions made available short-term credit at 7% to farmers. The subvention is calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier. However, this is subjected to a maximum period of one year.

Notably, this development exactly comes a week after Prime Minister announced Centre’s decision to raise by 50 per cent the quantum of compensation to farmers affected by crop losses due to recent unseasonal rains.

The CNX Nifty is currently trading at 8653.35, down by 53.35 points or 0.61% after trading in a range of 8638.25 and 8699.85. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.33% and Tata Steel up by 3.30% and Hindalco up by 2.70% and PNB up by 1.48% and NTPC up by 1.22%. On the flip side, Lupin down by 4.50%, TCS down by 3.59%, Indusind Bank down by 3.30%, Idea Cellular down by 3.08% and ACC down by 2.67% were the top losers.

Asian markets were trading mostly lower; with KOSPI Index trading higher by 3.6 points or 0.17% to 2,143.50; Shanghai Composite trading higher by 120.71 points or 2.88% to 4,315.53 and Hang Seng trading higher by 124.84 points or 0.45% to 27,864.55. On the flip side, Nikkei 225 down by 232.89 points or 1.17% to 19,652.88; Taiwan Weighted down by 85.94 points or 0.89% to 9,570.93; Straits Times down by 6.57 points or 0.19% to 3,525.04; Jakarta Composite down by 0.36 points or 0.01% to 5,420.38 and  FTSE Bursa Malaysia KLCI down by 0.11 points or 0.01% to 1,847.83.