Markets give up most of their last session gains; Banks and power drag

Indian markets have completely lost their momentum and were trading deep in red in early noon session, with benchmarks giving up most of their last session gains. There is hardly any sign of resistance and the slide has aggravated towards the second half of trade. Suffering cut of triple digit, Sensex was trading below the 26800 levels, while the Nifty has lost its crucial level of 8100 with a wide margin. Traders have overlooked the positive economic data of CAD narrowing to $1.3 billion or 0.2% of the GDP in the March quarter, as the Reserve Bank of India (RBI) showed that the CAD was actually a shade higher than $1.2 billion that was recorded in the fourth quarter of 2013-14, on year-on-year basis. Back on street, the plunge spread to every corner and the broader markets too were witnessing sharp cuts, all the sectoral indices on the BSE were trading in red led by banking, auto, power and IT. Sugar stocks which came into limelight in last session after the government approved an interest free loan of Rs 6000 to sugar mills to pay cane growers arrears, too have turned somber after Indian Sugar Mills Association said the move did not address the basic problem of surplus sugar and depressed prices. Bajaj Hindusthan, Shree Renuka, Balrampur Chini and Dhampur Sugars all were suffering cut of 3-4 percent. 

The BSE Sensex is currently trading at 26571.85, down by 268.65 points or 1.00% after trading in a range of 26486.61 and 27000.14. There were just 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index and Small cap index both were down by 0.60% each.

The top losing sectoral indices on the BSE were Bankex down by 1.22%, Power down by 1.17%, Auto down by 1.12%, Consumer Durables down by 1.03%, IT down by 0.99%.

The gainers on the Sensex were Hindustan Unilever up by 0.68%, Sun Pharma Inds up by 0.55%, Hero MotoCorp up by 0.50% and Coal India up by 0.04%. On the flip side, SBI down by 2.23%, Tata Motors down by 2.14%, Reliance Industries down by 2.10%, Wipro down by 2.01% and Cipla down by 2.01% were the top losers.

Meanwhile, in a positive sign for the economy, current account deficit (CAD), the excess of spending overseas than earnings, narrowed to $1.3 billion or 0.2 percent of the GDP in the March quarter from $8.3 billion or 1.6 percent of GDP in the previous quarter, due to the slide in crude oil and commodity prices. On year-on-year basis, CAD in the fourth quarter was a shade higher than $ 1.2 billion or 0.2 percent of GDP in the same quarter of financial year 2013-14. The CAD has narrowed for the second straight quarter now.

For the full fiscal 2014-15, the CAD shrank to $ 27.5 billion, or 1.3 percent of GDP, from $ 32.4 billion or 1.7 percent of GDP a year ago. The Reserve Bank of India data further showed that the country’s balance of payments recorded a quarterly surplus of $30.1 billion, helped by robust capital inflows and the narrow CAD.

RBI stated that lower CAD, on the back of contraction in trade deficit and marginal improvement in the net invisible earnings, along with a sizable increase in net financial flows enabled a large build-up of reserves. The central bank also said that it added a whopping $ 61.4 billion to the foreign exchange reserves in 2014-15 compared to $ 15.5 billion in the previous fiscal.

Merchandise trade deficit for the January-March period stood at $27 billion, much lower than around $40 billion in the previous three-month period. However, a fall in exports is worrisome. However, in year-over-year terms, the trade deficit in the fourth quarter widened marginally as exports registered a larger decline of 15.4 percent than imports of 10.4 percent.

The CNX Nifty is currently trading at 8031.45, down by 93.00 points or 1.14% after trading in a range of 8009.00 and 8163.05. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were BPCL up by 0.71%, Hindustan Unilever up by 0.65%, Sun Pharma Inds up by 0.50%, Hero MotoCorp up by 0.50% and Coal India up by 0.02%. On the flip side, Idea Cellular down by 2.85%, Asian Paints down by 2.77%, SBI down by 2.42%, Cairn India down by 2.38% and Yes Bank down by 2.24% were the top losers.

Asian markets were showing mixed trend, Taiwan Weighted was up by 3.99 points or 0.04% to 9,302.49, KOSPI Index gained 5.29 points or 0.26% to 2,056.61, Straits Times was higher by 22.72 points or 0.68% to 3,348.49, Hang Seng gained160.06 points or 0.6% to 26,847.70 and Nikkei 225 surged by 304.41 points or 1.52% to 20,350.77.

On the other hand, Shanghai Composite lost 37.48 points or 0.73% to 5,068.55, Jakarta Composite was down by 5.44 points or 0.11% to 4,928.12 and FTSE Bursa Malaysia KLCI was tad lower by 0.91 points or 0.05% to 1,734.72.