Benchmarks add losses; Nifty slips below 8400 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 100 points and Nifty falling below the 8400 level, as funds and retail investors indulged in booking profits at prevailing levels. Besides, a weakening trend on the other Asian markets following overnight losses on the US bourses also influenced the sentiment. The broader indices too dipped as BSE 100 recorded a loss of 0.25 per cent and mid-cap and small-cap stocks lost over 0.40 percent each. However, losses remained capped as some encouragement came with Reserve Bank of India Governor Raghuram Rajan’s statement that government has taken steps to propel growth. He also said that investors’ unhappiness over the taxation issues could have been avoided, but once raised, they have to go through a legal process which is on. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 123.49 crore on May 20, 2015.

On global front, Asian stock markets were lackluster after China's economy showed new signs of weakness and Fed minutes shed little light on the timing of a U.S. interest rate hike. Manufacturing in China shrank for the third straight month in May as demand remained soft, raising the chances of more stimulus to prop up growth in the world's No. 2 economy. Back home, Indian rupee strengthened by 17 paise to 63.65 against the dollar in early trade on fresh selling of the US currency by exporters and banks amid a higher opening in the equity market.

Back on street, stocks from IT, Consumer Durables and TECK counters were supporting the markets’ uptrend, while those from Power, Metal and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Aarti Drugs have dipped after reporting a 14% year on year drop in net profit at Rs 18.86 crore for the fourth quarter ended March 31, 2015, on account of lower sales. On the other hand, Shares of IRB Infrastructure have gained after the company bagged Rs 2,650 crore order from the National Highways Authority of India (NHAI).

The market breadth on BSE was negative, out of 2090 stocks traded, 820 stocks advanced, while 1168 stocks declined on the BSE.

The BSE Sensex is currently trading at 27733.78, down by 103.43 points or 0.37% after trading in a range of 27719.54 and 27911.44. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.71%, while Small cap index down by 0.45%.

The top gaining sectoral indices on the BSE were IT up by 0.15%, Consumer Durables up by 0.14%, Realty up by 0.08% and TECK up by 0.08%, while Power down by 0.95%, Metal down by 0.89%, Oil & Gas down by 0.80%, Infrastructure down by 0.76% and FMCG down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.17%, Tata Motors up by 0.89%, Axis Bank up by 0.83%, Larsen & Toubro up by 0.47% and Hindustan Unilever up by 0.30%. On the flip side, Tata Steel down by 5.35%, Vedanta down by 2.99%, Cipla down by 2.30%, GAIL India down by 1.78% and Tata Power down by 1.42% were the top losers.

Meanwhile, Finance Minister Arun Jaitley weighing down the fear of rebound in the inflation has said that it will not be a significant challenge though there is a possibility of below average monsoon and food prices getting impacted. Moreover, Jaitley added, “steps taken by the government has kept food prices low and pro-active government will always keep food prices low”. FM reportedly said that “Global oil prices have moderated, it is excellent for us. Inflation is low because oil prices are low... I don't think in days to come inflation (will be a) significant challenge.”

Jaitley pointing to the challenges that the government may face, said it include the possibility of weak monsoon, promoting private investment and dealing with the global economic problems. The meteorological department has projected the possibility of below normal monsoon which may have implications on country's food production.

Finance Minister has earlier lent his voice to a growing consensus that the Reserve Bank of India (RBI) needs to cut interest rates and had said that “I want the interest rates to be lower a lot more, but they (RBI) balance inflation with growth.” The RBI has cut rates by a 50 basis points or 0.50 per cent since January and is due to review them next month.

Wholesale Price Index (WPI) inflation has been in the negative zone since November, 2014 and came at (-) 2.65 percent in April, from (-) 2.33 percent in March. Retail inflation in April has also softened further and fell to a four-month low of 4.87 percent as prices of food items, vegetables and fruits turned cheaper.

The CNX Nifty is currently trading at 8393.15, down by 30.10 points or 0.36% after trading in a range of 8382.50 and 8446.35. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.80%, Ultratech Cement up by 1.51%, Tech Mahindra up by 1.48%, Tata Motors up by 0.89% and HCL Tech up by 0.82%. On the flip side, Tata Steel down by 5.27%, Vedanta down by 3.26%, Bank of Baroda down by 2.82%, Yes Bank down by 2.15% and Cipla down by 2.08% were the top losers.

Asian markets were trading mostly in the red; Taiwan Weighted declined 1.1%, KOSPI Index decreased 0.77%, Jakarta Composite shed 0.29%, Straits Times down by 0.13%, Hang Seng slipped 0.04% and FTSE Bursa Malaysia KLCI was down by 0.16%. On the flip side, Shanghai Composite surged 1.12% and Nikkei 225 was up by 0.34%.