Markets continue to reel under pressure; trade with cut of over 0.50%

Local equity markets continued to reel under pressure on prevailing cautiousness ahead of Thursday’s monthly expiry in derivatives segment amidst a weak trend at other Asian bourses. Meanwhile, investors were also cautious ahead of US Federal Reserve’s two day policy meet which is likely to signal its stance on interest rates. Trading with cut of over 0.50%, both Sensex and Nifty were below psychologically crucial 27,300 and 8,250 levels respectively. Bourses extended their losses in late morning trade weighed down by index heavyweights HDFC and ITC, while telecom shares witnessed profit-booking taking their post March quarter earnings. However, the session was fruitful for broader indices, which were trading with gains in the range of 0.20-0.85%.

On the global front, Asian markets faded further from seven year peaks on Wednesday, while  investors’ exited crowded positions in the US dollar as the Federal Reserve  wraps up two day policy meeting. Trading was thinner on Wednesday with Japanese markets on holiday and little in the way of major data out in Asian time.

Closer home, markets largely remained unaffected from World Bank’s report which suggested that Indian economy has taken strong strides towards higher growth and enhanced stability, aided by a supportive external environment, in particular the sharp decline in oil and commodity prices. Most of the sectoral indices on BSE were trading in negative territory, with stocks from FMCG, Infrastructure and Metal counters were the prominent losers of the session. On the flip side, stocks from Realty, Consumer Durables and banking counters were the prominent gainers of the session. In stock-specific action, Telecom shares which had firmed up ahead of their fourth quarter earnings eased on profit taking post the announcement of their earnings on Tuesday. Bharti Airtel was down 0.8% while Idea Cellular shed nearly 4%. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1387:995; while 88 shares remained unchanged.

The BSE Sensex is currently trading at 27259.36, down by 137.02 points or 0.50% after trading in a range of 27176.54 and 27420.99. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 0.66%, Consumer Durables up by 0.44%, Bankex up by 0.38%, Capital Goods up by 0.08% while, FMCG down by 1.50%, INFRA down by 0.59%, Metal down by 0.52%, Auto down by 0.46%, Oil & Gas down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.93%, ICICI Bank up by 2.08%, GAIL India up by 1.44%, Sun Pharma Inds. up by 1.42% and Wipro up by 1.28%. On the flip side, Sesa Sterlite down by 3.76%, ITC down by 2.46%, HDFC down by 2.33%, Tata Motors down by 2.11% and Hindalco down by 1.71% were the top losers.

Meanwhile, the Parliamentary Standing Committee on Commerce has suggested that the government in order to lift industrial share to 25% of the GDP should infuse modern, green and latest technology to its industrial/manufacturing base, more so, in the SME sector. However, the committee did express apprehension over the ambitious goals of the national manufacturing policy (NMP) 2011 of enhancing the share of manufacturing in GDP to 25 per cent and creation of 100 million jobs over a decade and said that this could be adversely affected given the extremely slow pace of progress made under the policy.

It also highlighted that the scheme for implementation of NMP was yet to be notified and that its notification was pending approval of all the components under the policy.  The committee noted that capacity constraints in critical infrastructure sectors such as electricity and railways was the reason responsible for reduced profitability of manufacturing industries which are logistics intensive, while it also pointed that complex and complicated regulatory regime including land, environmental clearances, supply of critical inputs like coal, gas that increased risks of project implementation also led to low private sector investment in manufacturing activities in the recent years.

The committee suggested that Department of Industrial Policy and Promotion (DIPP), the nodal agency for the industrial health of the country to vigorously tackle all infrastructural bottlenecks and the discouraging business environment existing in the country. It suggested DIPP to closely monitor the projects' progress and pursue the concerned ministries and departments and states for expeditious action so as to ensure there are no cost/time overruns.

The CNX Nifty is currently trading at 8239.75, down by 45.85 points or 0.55% after trading in a range of 8219.20 and 8291.40. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.99%, ICICI Bank up by 1.88%, Tech Mahindra up by 1.79%, Lupin up by 1.68% and GAIL India up by 1.56%. On the flip side, Sesa Sterlite down by 3.96%, Idea Cellular down by 3.08%, ITC down by 2.59%, HDFC down by 2.47% and Cairn India down by 2.36% were the top losers.

Asian markets were trading lower; with Jakarta Composite down by 183.09 points or 3.49% to 5,059.07; Taiwan Weighted down by 103 points or 1.03% to 9,853.83; Hang Seng down by 52.39 points or 0.18% to 28,390.36; FTSE Bursa Malaysia KLCI down by 7.81 points or 0.42% to 1,847.25; KOSPI Index down by 5.04 points or 0.23% to 2,142.63; Straits Times down by 4.31 points or 0.12% to 3,490.78 and Shanghai Composite down by 3.47 points or 0.08% to 4,472.75