Benchmarks trade in tight band with a cut of half a percent

Indian equity benchmarks continue to trade in tight band with a cut of over half a percent and frontline gauges declining below their crucial 26,700 (Sensex) and 8,100 (Nifty) levels, as fears of selling by foreign funds on expectation of a rate hike by the US Fed amid strong jobs data dampened market sentiment. Depreciation in Indian rupee too weighed on sentiments. The Indian rupee has once again breached the 64-level mark at the Interbank Foreign Exchange, caused by the capital outflows by foreign funds amid strengthening of the American currency against others overseas. Sentiments also remained dampened with industry body, Assocham’s  latest assessment that in the face of slow global demand for merchandise, India’s exports in the current financial year are likely to stay flat or may even move backward of $ 310 billion, the figure achieved in 2014-15.

Global cues too remained sluggish with European counters making a weak start. Asian markets were trading mostly in the red terrain at this point of time after upbeat US employment data raised bets that the US central bank would raise interest rates as early as September. Back home, none of the sectoral indices were trading in the green. While consumer durables and infrastructure witnessed the maximum losses in trade, realty, oil and gas, power, auto, healthcare, fast moving consumer goods, metal and banking too lost significantly. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 770 shares on the gaining side against 1541 shares on the losing side while 93 shares remain unchanged.

The BSE Sensex is currently trading at 26620.27, down by 148.22 points or 0.55% after trading in a range of 26588.70 and 26827.06. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.24%, while Small cap index down by 0.99%.

The losing sectoral indices on the BSE were Consumer Durables down by 1.29%, INFRA down by 1.25%, Realty down by 1.11%, Oil & Gas down by 1.05% and Power down by 0.97%, while there were no gainers on the index.

The top gainers on the Sensex were Coal India up by 1.54%, Bajaj Auto up by 1.12%, Tata Power up by 0.85%, Axis Bank up by 0.85% and Larsen & Toubro up by 0.68%. On the flip side, Vedanta down by 2.54%, Tata Motors down by 2.33%, Tata Steel down by 2.19%, Hindustan Unilever down by 1.66% and HDFC down by 1.63% were the top losers.

Meanwhile, industry body the Associated Chambers of Commerce & Industry of India (Assocham) in its latest assessment has said that in the face of slow global demand for merchandise, India’s exports in the current financial year are likely to stay flat or may even move backward of $ 310 billion, the figure achieved in 2014-15, which itself was lower against a target of $ 340 billion for 2014-15 fiscal.

The industry body has further noted that, while it has been a weak trend since July 2014, exports have been witnessing contractions since January this year right through April. Engineering products, gems and jewellery and petroleum products are the biggest contributors to the overall export basket in terms of value. In the previous fiscal, while engineering goods registered a modest increase, the other two segments have been witnessing sharp drop. It further stated that the trend is likely to continue at least for gems and jewellery, while the situation may somewhat stabilize for the petroleum segment since after seeing a sharp fall, the crude oil prices have stopped seeing much of drop. Petroleum exports are related to the prices of crude oil.

Assocham’s paper has also said that going forward, the merchandise exports are likely to average around $22-25 billion a month till the end of second quarter of the current fiscal. The shipments would improve thereafter, but the upside remains limited, the paper noted with concern. However, the impact of the flat or some drop in exports would not have major impact on the trade balance since imports too would remain in muted form because of the poor consumption demand in the domestic Indian economy. Imports too would remain between $440-450 billion in the current fiscal -- more or less in sync with the previous year.

The CNX Nifty is currently trading at 8062.50, down by 52.20 points or 0.64% after trading in a range of 8053.80 and 8131.00. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.83%, Zee Entertainment up by 1.23%, Bajaj Auto up by 1.14%, Axis Bank up by 0.76% and Tata Power up by 0.71%. On the flip side, PNB down by 3.76%, Cairn India down by 3.45%, Bank of Baroda down by 2.90%, Vedanta down by 2.87% and Tata Steel down by 2.60% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite was down by 1.69%. KOSPI Index lost 0.14%, FTSE Bursa Malaysia KLCI down by 0.40%, Straits Times down by 0.28% and Nikkei 225 was marginally down by 0.02%. On the other hand, shanghai Composite up by 2.12%, Hang Seng up by 0.54% and Taiwan Weighted was up by 0.30%

European Markets were trading in the red; Germany’s DAX dropped 0.32%, UK’s FTSE declined 0.18% and France’s CAC was down by 0.51%.