Markets recover some lost ground; yet weakness persist

Local equity markets although have recovered some of their lost ground yet continue to trade weak with loss of over two tenth of a percent that dragged both Sensex and Nifty below psychologically crucial 27,850 and 8,450 levels respectively. Concerns over retrospective taxation which loomed among foreign investors, weighed on the sentiment for yet another session. Additionally, disappointing start of Q3 earning season with both TCS and Reliance Industries, the two largest listed companies by market capitalization reporting dismal earnings also added to the pessimistic environment. However, the session continued to remain positive for broader indices, which were trading with gains in the range of 0.10-0.25%.

On the global front, Asian stocks were firm on Tuesday after China's latest step to prop up its faltering economy lifted global equities. China's central bank on Sunday cut the amount of cash banks must hold as reserves in its latest attempt to spur lending and combat a slowing economy. The news followed reports last week about a crackdown on margin lending there, which had sent global equity markets lower on Friday. Meanwhile, European shares were seen heading for a higher open on Tuesday, with a raft of company results helping offset broader market fears over Greece after Athens ordered state entities to park idle cash at the central bank in a scramble to pay its bills.

Closer home, most of the sectoral indices on BSE were trading into negative territory, nevertheless stocks from Oil & Gas, Auto and FMCG counters were the prominent losers. On the flip side, stocks from Realty, banking and Capital Goods counters were the top gainers of the session. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1297:1091; while 110 shares remained unchanged.

The BSE Sensex is currently trading at 27820.98, down by 65.23 points or 0.23% after trading in a range of 27687.07 and 27976.93. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index up by 0.09%.

The gaining sectoral indices on the BSE were Realty up by 0.75%, Bankex up by 0.75%, Capital Goods up by 0.40%, Consumer Durables up by 0.26% and Metal up by 0.21% while, Oil & Gas down by 0.61%, Auto down by 0.37%, FMCG down by 0.36%, IT down by 0.18% and TECK down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.05%, Bharti Airtel up by 1.38%, ICICI Bank up by 1.13%, Mahindra & Mahindra up by 0.90% and Tata Steel up by 0.89%. On the flip side, Sun Pharma Inds. down by 9.16%, Dr. Reddys Lab down by 2.35%, Maruti Suzuki down by 2.31%, Hindustan Unilever down by 2.12% and Hindalco down by 1.80% were the top losers.

Meanwhile, piping china, India is estimated to lead the world steel output growth, which is expected to touch 2,000 million tonnes by the turn of 2030, by growing at pace of 25% since 2014, according to an industry body. World Steel Association highlighted that world crude steel output is expected to jump by 400 million tonnes by 2030 from 1,600 million tonnes in 2014, largely supported by growth in India.

India had lost its “No 3 slot” to the US in 2009, however World Steel Association highlighted that future demand in the country will be fuelled by population growth in the emerging world, processes of urbanization and industrialization. However, Modi led government has set a target of trebling the steel output to 300 mt by 2025, and also eyes the No 2 slot by 2020. Driven by the rapid growth in China, which is the largest consumer and producer of steel, the global steel industry doubled from 800 million tonne in 2004 to 1,600 million tonne in 2014. However, the share of China which contributes to over 47% of the world's steel production is declining.

Notably, World Bank Association underscored that China had reached the upper end of the growth curve and was witnessing a real slowdown, while it highlighted that the future of Indian steel industry remains to be bright.  The CNX Nifty is currently trading at 8428.05, down by 20.05 points or 0.24% after trading in a range of 8382.65 and 8469.35. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.02%, Bharti Airtel up by 1.33%, Indusind Bank up by 1.29%, Tech Mahindra up by 1.23% and ICICI Bank up by 1.11%. On the flip side, Sun Pharma Inds down by 9.15%, HCL Tech. down by 3.82%, Dr. Reddys Lab down by 2.59%, Hindustan Unilever down by 2.33% and Maruti Suzuki down by 2.32% were the top losers.

Asian markets were trading mostly higher; with FTSE Bursa Malaysia KLCI trading higher by 7.68 points or 0.42% to 1,856.34; Straits Times trading higher by 9.55 points or 0.27% to 3,512.80; Jakarta Composite trading higher by 24.25 points or 0.45% to 5,425.06; Shanghai Composite trading higher by 57.62 points or 1.37% to 4,274.70; Nikkei 225 trading higher by 274.6 points or 1.4% to 19,909.09; Hang Seng trading higher by 541.74 points or 2% to 27,636.67. On the flip side, Taiwan Weighted edging lower by 18.87 points or 0.2% to 9,533.98 and KOSPI Index edging lower by 1.92 points or 0.09% to 2,144.79 were the only loser amongst Asian pack.