Markets continue to trade in red dragged down by FMCG and metal counters

Markets continue to trade in red with benchmarks finding it difficult to hold their psychological levels of 27750 (Sensex) and 8400 (Nifty). The early cautiousness was persisting with trade remaining under pressure, dragged down by FMCG and Metal stocks. Metal gauge was particularly under pressure after a preliminary Chinese factory gauge missed the estimates and came in at 49.1, raising demand concern from the second largest consumer of metals. Marketmen were unable to get any respite with the government constituting committee on MAT issue headed by Justice A.P. Shah, with other members Dr. Girish Ahuja and Dr. Ashok Lahiri. To begin with, the Committee will examine the matter relating to levy of MAT on FIIs for the period prior to 01 April 2015. Back on street, while the broader markets continued underperforming, FMCG, power metal and healthcare were dragging the markets lower. On the other hand, the IT sector too was trading higher, though the rupee strengthened against the dollar on fresh selling of the US currency by exporters and banks. Some strength was also seen in realty and capital goods stocks.

The BSE Sensex is currently trading at 27734.08, down by 103.13 points or 0.37% after trading in a range of 27712.73 and 27911.44. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index lost 0.36%.

The gaining sectoral indices on the BSE were Realty up by 0.33%, IT up by 0.24%, TECK up by 0.17%, Capital Goods up by 0.13%, Consumer Durables up by 0.10%, while FMCG down by 0.95%, Metal down by 0.77%, Power down by 0.73%, Oil & Gas down by 0.58%, Bankex down by 0.52% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.08%, Bajaj Auto up by 1.14%, Axis Bank up by 1.13%, Tata Motors up by 0.83% and ONGC up by 0.62%. On the flip side, Tata Steel down by 5.27%, Vedanta down by 2.96%, Cipla down by 2.18%, ITC down by 1.64% and Tata Power down by 1.55% were the top losers.

Meanwhile, Reserve Bank of India Governor Raghuram Rajan, coming in support of the government has said that the new government has taken steps to propel growth, adding that the expectations from the new government when it came to power last year were “probably unrealistic” but it has taken steps to create an environment for investment.

Rajan said that the government is sensitive to the concerns of investors and is looking into addressing economic issues. There are several areas where the government has taken more “serious and significant” advances to improve investor confidence and propel growth. The RBI governor said a “big part” of the business environment was taxes and the government had said it would not bring retrospective taxation again.

The governor 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. He added that India could have done a “better job” in handling tax issues, but “going forward the government says no more of this kind of stuff”. “Once the tax authority levies a demand on you, there is a quasi-judicial nature of that proceeding and, therefore, it has to go through the courts before it is resolved. The government cannot intervene'. The corporate tax rate will also come down 1 per cent every year going forward, he added.

The CNX Nifty is currently trading at 8395.50, down by 27.75 points or 0.33% after trading in a range of 8382.50 and 8446.35. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.89%, Ultratech Cement up by 1.99%, ACC up by 1.56%, Tech Mahindra up by 1.48% and HCL Tech. up by 1.18%. On the flip side, Tata Steel down by 5.31%, Vedanta down by 3.10%, Bank Of Baroda down by 2.41%, Cipla down by 2.26% and Yes Bank down by 1.94% were the top losers.

The Asian markets barring the Japanese and Chinese indices were trading in red, Nikkei 225 was marginally up by 6.31 points or 0.03% to 20,202.87 and the Shanghai Composite was higher by 30.97 points or 0.7% to 4,477.26.

On the other hand, Hang Seng lost 141.21 points or 0.51% to 27,443.84, Taiwan Weighted declined by 106.75 points or 1.1% to 9,578.56, KOSPI Index was lower by 16.73 points or 0.78% to 2,122.81, Jakarta Composite decreased by 12.17 points or 0.23% to 5,280.58, FTSE Bursa Malaysia KLCI was down by 2.89 points or 0.16% to 1,807.22 and Straits Times lost 2.25 points or 0.07% to 3,437.43.