Markets continue to trade weak; Healthcare outperforms

Markets continue to trade week, with traders unable to get any major respite despite some stabilization and benchmarks after slipping below their crucial psychological levels of 28000 (Sensex) and 8450 (Nifty) respectively were making futile attempts to gain traction. The knee-jerk reaction to the result of Greek voters rejecting more austerity demands from creditors, fuelled fears that the country will crash out of the Eurozone and has weighed heavily on the equity markets across the globe, triggering selling by participants. On the domestic front too there were some dampeners, keeping the markets under pressure, private weather forecaster Skymet has reported that though rains were 16% above normal in month of June, they came down by 10% from the normal in the first week of July. Also, there was report that the Goods and Services Tax (GST) Bill is unlikely to be taken up in the coming monsoon session of Parliament, as the Congress members on the joint parliamentary panel on GST are likely to submit dissent notes against the panel’s report to be submitted on July 17. Back on street, the broader markets were posing some resistance with comparatively lower cuts than the benchmarks. On the sectoral front, the laggards included metal, banking, technology, IT and auto, while modest gains were being seen in healthcare and oil & gas stocks.

The BSE Sensex is currently trading at 27867.25, down by 225.54 points or 0.80% after trading in a range of 27774.80 and 27946.68. There were just 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.22%, while Small cap index was up by 0.09%.

The gaining sectoral indices on the BSE were Healthcare up by 0.64% and Oil & Gas up by 0.17%, while Metal down by 1.63%, Consumer Durables down by 1.32%, Bankex down by 1.10%, IT down by 0.90%, INFRA down by 0.87% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 3.12%, Cipla up by 2.04%, Hero MotoCorp up by 1.60%, Coal India up by 0.50% and Bajaj Auto up by 0.34%. On the flip side, Vedanta down by 5.74%, Tata Steel down by 2.38%, Hindalco down by 2.35%, Tata Motors down by 2.22% and ICICI Bank down by 1.97% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has once again pitched for the passage of land acquisition and GST bills in Parliament, amid threats from the opposition of disrupting the upcoming monsoon session of the parliament. Jaitley has said that policy reforms and 8-10 per cent economic growth are a must to eliminate poverty, citing the results of Socio Economic and Caste Census that 'growth and economic reforms help the poor as do targeted schemes'.

He said that the latest data suggest that the investment cycle is slowly turning around and stalled projects are being unblocked at a faster pace. Passing the GST and reforming the land law will accelerate this investment turnaround.

Finance Minister also said that that NDA government was trying to create conditions for accelerating growth to 8-10 percent through a set of measures.'...The government is creating the conditions for greater private investment: implementing the GST and creating a common market, reforming the land law, easing the costs of doing business, and unblocking stalled projects are all measures that will improve the conditions for investment.'

While the Goods and Services Tax Bill is being scrutinised by a select committee of the Rajya Sabha, the Land Acquisition bill is being discussed by the joint committee of Parliament. Both the committees are expected to submit their reports at the beginning of the next session.

The CNX Nifty is currently trading at 8428.35, down by 56.55 points or 0.67% after trading in a range of 8386.15 and 8443.80. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.12%, BPCL up by 3.03%, Cipla up by 2.16%, Hero MotoCorp up by 1.65% and Ambuja Cement up by 1.07%. On the flip side, Vedanta down by 5.60%, NMDC down by 2.85%, Tata Steel down by 2.47%, Hindalco down by 2.40% and Tata Motors down by 2.20% were the top losers.

All the major Asian markets barring Shanghai Composite, which was higher by 24.16 points or 0.66% to 3,711.08, were trading in red.

Hang Seng slumped by 1096.18 points or 4.21% to 24,967.93,Nikkei 225 plunged by 427.67 points or 2.08% to 20,112.12, Taiwan Weighted lost 102.27 points or 1.09% to 9,255.96, Jakarta Composite declined by 62.91 points or 1.26% to 4,920.00, KOSPI Index lost 50.48 points or 2.4% to 2,053.93, Straits Times was down by 34.69 points or 1.04% to 3,308.04 and FTSE Bursa Malaysia KLCI decreased by 22.6 points or 1.3% to 1,711.64.