Markets sulk at day’s low with loss of around 0.50%

Local equity markets, after slipping into negative territory continued trading weak in afternoon deals on Thursday, on sustained selling activities by funds and retail investors amidst lack of positive triggers. At day’s low, both Sensex and Nifty were trading below psychologically crucial 27,800 and 8,400 levels respectively, with losses of around half of a percent. Meanwhile, broader indices outperforming larger counterparts were trading with gains in the range of 0.13-0.65%.

On the global front, Asian stocks were mostly higher on Thursday, with Tokyo and Seoul bourses settling at multi-year highs, despite a private survey showing China's manufacturing activity at a one-year low. HSBC's preliminary reading of China's factory activity for April came in at 49.2, compared with street expectation of a figure around 49.6. Last month, government data showed the official purchasing managers' index (PMI) edged up to 50.1, better than HSBC's final PMI, which came in at 49.6 indicating the country's vast manufacturing sector in contraction. The 50-point level separates an expansion in activity from a contraction.

Closer home, most of the sectoral indices on BSE were sulking in negative territory, however much of the drubbing was witnessed by stocks from Capital Goods, Power and Auto counters. On the flip side, buying was witnessed in stocks from Metal, Consumer Durables and Infrastructure counters which were the only gainers of the session. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1327:1191; while 83 shares remained unchanged.

The BSE Sensex is currently trading at 27763.48, down by 126.65 points or 0.45% after trading in a range of 27719.71 and 28087.78. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.65%, while Small cap index gained 0.13%.

The gaining sectoral indices on the BSE were Metal up by 1.47%, Consumer Durables up by 0.61%, INFRA up by 0.15%, while Capital Goods down by 0.49%, Power down by 0.45%, Auto down by 0.45%, Oil & Gas down by 0.41%, IT down by 0.36% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.03%, Coal India up by 1.40%, Maruti Suzuki up by 1.08%, Tata Power up by 0.51% and Sesa Sterlite up by 0.45%. On the flip side, NTPC down by 2.06%, Mahindra & Mahindra down by 1.84%, SBI down by 1.83%, Wipro down by 1.47% and Dr. Reddys Lab down by 1.46% were the top losers.

Meanwhile, watering down the government’s ambitious exports growth target, exporters' body Federation of Indian Export Organisations (FIEO) has said that India's exports in the current fiscal will fall further and are unlikely to touch even the $300-billion mark on account of decline in the container volumes at ports and poor order book position.

FIEO has said that what is worrying now is the volume which is going down. For a few ports the volumes are down by 26 percent, so overall a double digit decline is expected in volume. The decline in volume means value-wise export may suffer more decline. Adding further, FIEO said that in order to reverse the declining trend of India's exports, the government needs to step out to help exports community in terms of some direct tax benefits.

President of FIEO, S C Ralhan said that the Exporters should be incentivised through tax benefits to invest in manufacturing. Any investment in plant and machinery for expansion or modernization should be made eligible for tax deduction at 100 percent. Textile Upgradation Fund Scheme (TUFS) for textiles may be extended to engineering and other sectors of exports.

India has set a target of $340 billion for 2014-15, when country's exports in 2014-15 fiscal stood at $ 310.5 billion, down 1.2% from $314.4 billion the year before, mainly due to slowdown in global growth. In terms of the country’s export destinations, the slowdown was more visible in Asian nations such as China (minus 19%) and Singapore (minus 20%), while exports to the US and the UAE were stronger. While value-wise exports have declined, volume-wise exports picked up in certain sectors. With the Indian rupee strengthening in real effective terms.

The CNX Nifty is currently trading at 8397.25, down by 32.45 points or 0.38% after trading in a range of 8389.95 and 8504.95. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.19%, Tata Steel up by 3.98%, Zee Entertainment up by 1.60%, IDFC up by 1.56% and HCL Tech. up by 1.46%. On the flip side, NTPC down by 2.26%, Mahindra & Mahindra down by 2.05%, Tech Mahindra down by 1.95%, SBI down by 1.83% and Wipro down by 1.71% were the top losers.

Asian markets were trading mostly higher; with Straits Times trading higher by 8.8 points or 0.25% to 3,505.04; Jakarta Composite trading higher by 11.57 points or 0.21% to 5,448.68; KOSPI Index trading higher by 29.52 points or 1.38% to 2,173.41; Nikkei 225 trading higher by 53.75 points or 0.27% to 20,187.65; Taiwan Weighted trading higher by 184.49 points or 1.92% to 9,797.49

On the flip side, Shanghai Composite trading was lower by 6.5 points or 0.15% to 4,391.99; Hang Seng trading lower by 4.5 points or 0.02% to 27,929.35 and FTSE Bursa Malaysia KLCI edged lower by 2.91 points or 0.16% to 1,851.86.