Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions amid subdued cues from the global front. The sentiments remained dampened as rising inflation in US and a hawkish tone from the U.S. Federal Reserve Chair rekindled expectations that the Fed is on track to hike interest rates. Furthermore, Finance Minister Arun Jaitley’s statement that inflation in India has been brought under control in the past one year but global economy and agrarian situation as well as domestic investments pose challenge to the Indian economy. Down in red with loss of over 0.35%, both Sensex and Nifty were trading below the psychological 27,850 and 8,450 levels respectively. However, the session turned productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.25-0.27%. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 211.42 crore on May 22, 2015.

On global front, Chinese stocks rallied for a fifth straight day Monday, leading Asian markets mostly higher, while a stronger dollar also provided a tonic for regional exporters, helping Japanese shares gain ground. However, worries about Greece weighed on the sentiment. Back home, Indian rupee fell seven paise to 63.59 against the US dollar in early trade due to rise in the greenback’s value against other global currencies.

Back on street, stocks from Oil & Gas, Infrastructure and PSU counters were supporting the markets’ uptrend, while those from FMCG, Metal and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Shares of ITC have dipped after the company reported a lower-than-expected 3.7% year on year growth in its net profit at Rs 2,361 crore for the fourth quarter ended March 31, 2015. Furthermore, Rolta India too slipped after the company’s consolidated net profit for the quarter ended March 31, 2015 (Q3) more than halved at Rs 36.01 crore over the previous quarter due to lower operational revenues.

The market breadth on BSE was positive, out of 2099 stocks traded, 1030 stocks advanced, while 968 stocks declined on the BSE.

The BSE Sensex is currently trading at 27840.97, down by 116.53 points or 0.42% after trading in a range of 27814.10 and 27903.29. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.27%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.90%, Infrastructure up by 0.43%, PSU up by 0.35%, TECK up by 0.18% and Realty up by 0.18% while, FMCG down by 1.12%, Metal down by 0.78%, Capital Goods down by 0.34%, Consumer Durables down by 0.23% and IT down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.19%, ONGC up by 1.26%, Mahindra & Mahindra up by 0.97%, HDFC Bank up by 0.28% and Maruti Suzuki up by 0.13%. On the flip side, ITC down by 2.42%, Vedanta down by 2.22%, Tata Steel down by 1.30%, Hindustan Unilever down by 1.03% and Tata Motors down by 0.93% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has stated that inflation has been brought under control in the past one year but cautioned that global economic situation, state of agrarian sector and domestic investment would be the major challenges before the government in the coming year. FM said that “In the past one year inflation has been under control to a great extent Overall inflation situation has been much better than it has been in the past one decade.”

Jaitley while highlighting the achievements of Narendra Modi government in first year in office, said 'restlessness' of people for the economy to grow at a faster pace should put pressure on Congress to shed anti-growth and anti-development agenda. He added that the BJP government has replaced crony capitalism with liberal policy-based governance and left no place for lobbying and said that the government would focus on increasing the growth rate, which would ensure resource mobilisation for welfare schemes, as well as the social sector. While the decline in international oil and commodity prices have helped cool inflation, the government too has taken steps to control food inflation that has led to both wholesale and retail inflation come down from a peak of 11 per cent.

Finance Minister though talking about the challenges said that global economic situation and domestic agrarian scenario were a challenge. Adding the global economic situation was beyond the control of the government he said that “Domestic investment has to pick up, that is a challenge and even though on economic front we have succeeded in some areas. These are three areas where there are challenges.”

FM further said that “If India grows by 7.5 percent, India should never be satisfied. We have to aspire for more and this aspiration and restlessness of people should be a pressure on parties, especially Congress, which have adopted an anti-growth and anti development agenda.”

The CNX Nifty is currently trading at 8428.90, down by 30.05 points or 0.36% after trading in a range of 8414.95 and 8441.95. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.95%, Bharti Airtel up by 2.36%, Lupin up by 1.99%, Bank of Baroda up by 1.45% and HCL Tech up by 1.38%. On the flip side, ITC down by 2.70%, Ambuja Cement down by 2.09%, Asian Paints down by 1.84%, Vedanta down by 1.77% and Hindustan Unilever down by 1.22% were the top losers.

Most of the Asian equity indices were trading in the green; Straits Times increased 0.26%, KOSPI Index surged 1.1%, Shanghai Composite soared 2.32%, Nikkei 225 gained 0.65% and Hang Seng was up by 1.7%. On the flip side, Jakarta Composite decreased 0.38%, FTSE Bursa Malaysia KLCI declined 0.98% and Taiwan Weighted was down marginally by 0.05 points.