Markets come off the day's low; still trades in red

Markets continue to show a sluggish trend in the early noon session, with not much respite in sight, though the selling has got arrested and the benchmarks have recovered from the day’s low, but the major benchmarks continue to trade lower tracking the steep fall in some regional equity markets. Traders seem to have overlooked the Finance Secretary Rajiv Mehrishi’s statement that the government will come out with a 'carefully thought-out response' to deal with the situation of devaluation of Chinese yuan hitting Indian exports. Traders’ sentiments apart from the concern of weak trade data were also weighed down by the report from the weather department that India's monsoon rainfall deficit had widened to 10% as a strengthening El Nino weather pattern trimmed rainfall. The rainfall is likely to remain subdued even this week over most parts of the country, raising concerns over output from summer-sown crops such as cotton, oilseeds, paddy and pulses. Back on street, there was across the board selling and most of the sectoral indices were in red; however PSU banking shares bucked the trend amid reports the government is soon likely to initiate the bank recapitalisation process to help public sector banks tide over the growing NPA menace and prop up loan growth. The global rating agency Crisil too has said that the seven-pronged PSU banks' revival plan 'Indradhanush' could help the lenders register higher growth rate than earlier estimated and effectively deal with the issue of NPAs. The broader indices have recovered a bit and were in green, outperforming the benchmarks.

The BSE Sensex is currently trading at 27929.59, down by 137.72 points or 0.49% after trading in a range of 27739.13 and 28095.97. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was higher by 0.27%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.35%, PSU up by 1.07%, Metal up by 0.65%, Bankex up by 0.51%, while Oil & Gas down by 0.98%, Realty down by 0.65%, Capital Goods down by 0.55%, IT down by 0.46%, Auto down by 0.45% were the major losing indices on BSE.

The top gainers on the Sensex were SBI up by 4.08%, Tata Steel up by 2.11%, Sun Pharma Inds. up by 1.99%, GAIL India up by 1.04% and Coal India up by 0.73%. On the flip side, Cipla down by 3.47%, ONGC down by 2.27%, Hindalco down by 2.04%, Mahindra & Mahindra down by 1.46% and Reliance Industries down by 1.30% were the top losers.

Meanwhile, the ailing Indian aviation sector is likely to sigh some relief at least at the fares front, as amid calls from various quarters for regulating and capping airfare, the Competition Commission of India (CCI) Chairman Ashok Chawla has said that capping of airfares will violate competition norms as it stifles the movement of market forces.

Chawla said that capping of airfares has no place on the competition side and the prices have to be determined by the market forces as the sector is deregulated. He said that “Capping (of airfare) is antithetical to the policy of deregulation as well as to the whole philosophy of competition and what market determines.” CCI chief further said that “deregulation is where you allow market forces to operate and if you allow market forces to operate and you sought of stifle the market forces saying you will not allow this beyond a level, then actually you are not allowing the full play of market forces.'

Though, government too has emphasized that airfares are not regulated by the government as they are determined by the interplay of market forces, but the Minister of State for Civil Aviation Mahesh Sharma had hinted in recent times that ways were being looked at to curb predatory pricing of air tickets.

Recently, aircraft maker Boeing in its latest report titled 'India Current Market Outlook' has said that the domestic airfare has seen about 23% fall during the period from May 2014 to May 2015. It also said that the fuel prices have decreased by about 33% from their October 2013 peak.

The CNX Nifty is currently trading at 8488.05, down by 30.50 points or 0.36% after trading in a range of 8428.05 and 8530.60. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bank Of Baroda up by 13.77%, PNB up by 4.78%, SBI up by 4.23%, Sun Pharma Inds. up by 2.13% and Tata Steel up by 1.96%. On the flip side, Cipla down by 3.49%, ONGC down by 2.20%, Hindalco down by 1.93%, Zee Entertainment down by 1.64% and Mahindra & Mahindra down by 1.61% were the top losers.

The Asian markets were showing mixed trend, Jakarta Composite was marginally up by 1.14 points or 0.02% to 4,585.39, Shanghai Composite gained 17.57 points or 0.44% to 3,982.90 and Nikkei 225 was higher by 100.81 points or 0.49% to 20,620.26.

On the other hand, Hang Seng plunged by 200.53 points or 0.84% to 23,790.50, Taiwan Weighted declined by 92.22 points or 1.11% to 8,213.42, FTSE Bursa Malaysia KLCI lost 24.18 points or 1.51% to 1,572.64, Straits Times  was down by 22.15 points or 0.71% to 3,092.10 and KOSPI Index lost 14.94 points or 0.75% to 1,968.52