Markets slip to lowest point of the day; Realty drag

Markets are not getting any respite with major indices plunging to the lowest points of the day in early noon session. Sensex has slipped off its long held support level of 27000, while the Nifty was trading near 8150 mark. There is selling across board and not only the bluchips, the broader markets too were suffering deeper cuts. Traders have been going through slew of disappointing developments from the economy front, as after RBI indicated a pause in further rate cuts, met department forecasted a deficient southwest monsoon, now an HSBC survey has stated that India's services sector activity contracted for the first time in 13 months in May, largely due to decline in new order flows amid competitive pressure and natural disasters. Although, agriculture minister has stated that the government  has started preparing contingency plans for 580 districts from April onwards and is ready to face the draught situation and will overcome it with the help of states. Traders were even unable to find any support with the gains in rupee, which was trading higher after last session’s fall. Back on street, all the sectoral indices were trading in red with Realty, FMCG and consumer durables have taken the lead.

The BSE Sensex is currently trading at 26876.78, down by 311.60 points or 1.15% after trading in a range of 26863.88 and 27276.22. There were just 6 stocks advancing against 24 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index was down by 1.88%, while Small cap index lost 2.34%.

The top losing sectoral indices on the BSE were Realty down by 8.48%, FMCG down by 3.03%, Consumer Durables down by 2.75%, INFRA down by 2.61%, Power down by 2.17%, while there were no gainers.

The top gainers on the Sensex were NTPC up by 0.76%, Coal India up by 0.57%, TCS up by 0.44%, HDFC up by 0.35% and HDFC Bank up by 0.23%. On the flip side, Tata Motors down by 4.64%, ITC down by 4.25%, Tata Power down by 3.33%, ICICI Bank down by 2.68% and BHEL down by 2.63% were the top losers.

Meanwhile, the met department has downgraded its forecast for India’s June-September monsoon from 93% to 88% Long Period Average (LPA), with north-west region of the country expected to be hit the most. Although, the latest prediction, has an error margin of 4 percentage points either way but a rainfall of less than 90% is considered to be a drought year.

In April, the Indian Meteorological Department (IMD) had forecast that monsoon rains would be 93% of the average, which is categorised as “below normal”. Now, with the revised projection of 88%, the monsoon is categorised as “deficient”.

The North-West region which includes Delhi NCR, Haryana, Western Uttar Pradesh and Rajasthan will be affected as per the forecast with it receiving around 85% of rainfall of the LPA. The season rainfall is likely to be 90% of LPA over Central India, 92% of LPA over South Peninsula, and 90% of LPA over North-East India all with a model error of plus or minus 8% The projection of low rainfall, which may be attributed to the El-Nino phenomena, is likely to trigger fears about drought situation in some parts of the country.

The rains are vital not only for agriculture and rural incomes but also the broader economy, the Southwest monsoon which begins its four-month journey across India on June 1 in Kerala, is also crucial for power, drinking and irrigation. After missing its normal date of onset, Southwest Monsoon is now expected to hit Kerala coast on June 5. An advanced government estimate of winter output made before the recent unseasonal rains had already projected a 2.6% decline due to effects of a late drought.

The CNX Nifty is currently trading at 8130.10, down by 106.35 points or 1.29% after trading in a range of 8130.00 and 8236.70. There were 7 stocks advancing against 43 stocks declining on the index.

The gainers on Nifty were NTPC up by 0.76%, TCS up by 0.37%, Power Grid Corpn up by 0.35%, Coal India up by 0.34% and Infosys up by 0.19%. On the flip side, Tata Motors down by 4.52%, ITC down by 4.46%, Tata Power down by 4.06%, BHEL down by 3.42% and Bosch down by 3.27% were the top losers.

The Asian markets were trading mostly in the red; Nikkei 225 decreased 0.34%, Jakarta Composite was down by 1.35%, KOSPI Index decreased 0.74%, and Taiwan Weighted was lower by 0.60%. On the other hand, Hang Seng gained 0.87%, Shanghai Composite was up by 0.05% and Straits Times was higher by 0.23%.