Weakness persist on street; Metals outperform

Markets continue to trade choppy in the early noon session with persistent weakness. BSE Sensex after reclaiming the 28000 mark was once again trading below it, mainly due to profit booking in some high beta blue-chip stocks. Traders were mainly concerned about Indian Meteorological Department's (IMD) prediction that India is likely to witness a 'below normal' monsoon this season, for a second consecutive year, partly due to the El Nino phenomenon. Rupee weakness too was aiding to the weakness on the Dalal Street, though IT and Tech stocks despite that were trading in red. Metal stocks were in most jubilant mood even though flash reports showed that China’s factory activity contracted at its fastest pace in a year in April. Although the weak PMI added to a growing number of signs that China's economy is decelerating more rapidly than expected, but it also boosted the hopes of more stimulus from the country. Broader indices were outperforming the benchmarks, while the gains in realty and consumer durables was averting any serious fall in the markets.

The BSE Sensex is currently trading at 27807.87, down by 82.26 points or 0.29% after trading in a range of 27719.71 and 28087.78. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index gained 0.33%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, Realty up by 0.46%, Consumer Durables up by 0.44%, INFRA up by 0.36%, Bankex up by 0.03%, while IT down by 0.31%, Capital Goods down by 0.29%, Power down by 0.27%, Auto down by 0.19%, TECK down by 0.11% were the major losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.24%, Coal India up by 1.49%, Maruti Suzuki up by 1.33%, Bajaj Auto up by 0.65% and Tata Power up by 0.57%. On the flip side, NTPC down by 2.00%, Mahindra & Mahindra down by 1.90%, SBI down by 1.36%, Wipro down by 1.25% and Sun Pharma Inds down by 1.10% were the top losers.

Meanwhile, the India Meteorological Department’s (IMD’s) first outlook for this year’s South-West monsoon (June-September), indicating a second-straight year of deficient rains, is likely to increase the worries of the government coping with unseasonal rains and hailstorm of last month, which will impact the crop production and the economy adversely.

According to IMD, the probability of a deficient monsoon is 33% and the probability of below-normal monsoon is 35%. Effectively, there is a 68% probability of a weak monsoon. The Met Department predicted that rainfall could be 93 per cent (plus/minus five per cent) of the long period average (LPA). It classifies rainfall between 96 and 104 per cent of the 50-year average of 89 cm as normal. The onset of the South-West monsoon will be announced on May 15, and then only there will be a clearer idea of distribution for the June forecast. Later, as usual, IMD will issue an update to its forecast in June, when region-wise and monthly predictions will be released.

The latest forecast from the IMD-IITM coupled model forecast indicates El Nino conditions are likely to persist during the South-West monsoon season. Several international Met agencies too have forecast a 70 per cent probability of an El Nino event in 2015. In India, El Nino had led to severe monsoon failure in 2002 and 2009. The Earth Sciences Minister, Harsh Vardhan said that constant monitoring is being done and the Prime Minister’s Office and Cabinet Secretariat have also been told to be prepared. However, the latest forecast raises concerns for output prospects for major summer crops such as rice, cane, soybean and cotton in the country that is a key global producer of these farm commodities. Monsoon is the single biggest factor in the performance of kharif crops, including rice, sugar and oilseeds, which account for nearly half of India's food output.

The CNX Nifty is currently trading at 8411.85, down by 17.85 points or 0.21% after trading in a range of 8389.95 and 8504.95. There were 21 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.35%, Yes Bank up by 4.07%, Zee Entertainment up by 1.90%, Coal India up by 1.53% and HCL Tech. up by 1.49%. On the flip side, NTPC down by 2.06%, Tech Mahindra down by 1.96%, Mahindra & Mahindra down by 1.78%, Wipro down by 1.43% and SBI down by 1.30% were the top losers.

All the major Asian markets barring FTSE Bursa Malaysia KLCI, trading lower by 3.58 points or 0.19% to 1,851.19, were trading in green.

Jakarta Composite gained 5.2 points or 0.1% to 5,442.32, Straits Times was up by 11.47 points or 0.33% to 3,507.71, Shanghai Composite added 24.7 points or 0.56% to 4,423.19, KOSPI Index moved up by 29.52 points or 1.38% to 2,173.41, Nikkei 225 increased by 53.75 points or 0.27% to 20,187.65, Hang Seng was higher by 99.71 points or 0.36% to 28,033.56 and Taiwan Weighted surged by 184.49 points or 1.92% to 9,797.49.