Benchmarks reverse gears; slip into negative territory in absence of positive triggers

Reversing gears, Indian benchmark indices have now slipped into negative territory in absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks. The sentiments were distrustful ahead of March quarter GDP numbers and March fiscal deficit data, which are scheduled for release after the market hours. However, investors got some comfort with the report that Indian economy will grow 7.7 per cent in the ongoing fiscal amid likely improvement in the industrial and agricultural sectors' performance on account of good monsoon, though the investment cycle is expected to take at least 6 months to witness a pick-up. Some support also came with the expectation that the Mainland India is expected to get the first monsoon showers on June 6 or 7, about a week later than the usual June 1 date that the rains keep with Kerala coasts.  According to the private report, most parts of India would get normal to excess rainfall between July and September 2016, an encouraging prediction for a country that suffered two consecutive years of drought. 

On the global front, Asian markets trading mostly higher on Tuesday as investors found some solace in the latest economic data from Japan, which showed factory output and consumer spending data improved in April, though they remained weak. Investors are also watching for the latest monthly manufacturing index for China, due Wednesday, and an OPEC meeting Thursday as they seek to gauge the world economic outlook. Shares in Japan were also buoyed by expectations that a 2017 sales tax hike will be delayed until 2019, and by a weakening in the Japanese yen. Further, China stocks jumped to a three-week high with financials leading a broad rally as investors bet that MSCI will add mainland shares to its index for the first time next month.

Back home, stocks from information technology (IT), Capital Goods and Realty counters were among the worst performers, while Auto and Metal counters battled out against all odds. Jewelers stocks too surged on the report that the government has rolled back its budget decision to apply 1 percent tax collection at source (TCS) on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh with effect from June 1, 2016. In scrip specific development, shares of Tata Motors rallied after reporting stellar numbers for the March quarter, with 19% year-on-year consolidated revenue growth at Rs 80,684 crore. On the other hand, Reliance Communications has declined after the company posted a 22% drop in the March quarter net profit owing to lower revenue from voice and data services.

The market breadth on BSE was negative, out of 2184 stocks traded, 762 stocks advanced, while 1318 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26643.67, down by 81.93 points or 0.31% after trading in a range of 26608.52 and 26837.20. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.18%, while Small cap index down by 0.41%.

The top gaining sectoral indices on the BSE were Auto up by 1.28%, Metal up by 0.39% and Bankex up by 0.01%, while IT down by 1.21%, TECK down by 1.12%, Capital Goods down by 0.60%, Realty down by 0.50% and FMCG down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 5.97%, NTPC up by 2.62%, Tata Steel up by 1.19%, Maruti Suzuki up by 1.00% and Lupin up by 0.94%. On the flip side, Sun Pharma down by 5.58%, GAIL India down by 2.71%, Infosys down by 1.63%, Bharti Airtel down by 1.45% and Adani Ports &Special down by 1.31% were the top losers.

Meanwhile, the International Institute for Management and Development (IMD), a Switzerland-based private business school whose World Competitiveness Center research group has ranked nations on their competitiveness on the global business stage since 1989, in its annual evaluation has said that India climbed three spots and China dropped an equal number of places in the 2016 ranking.

According to IMD’s World Competitiveness Center report India moved up the ranking from 44 in 2015 to 41 in 2016, while China slipped from 25 to 22 in a survey of 61 nations. India improved its overall performance, image, openness, and managerial practices, but remains bedeviled by rising social disparities due to the neglect of investments in education, health, and environment during the last two years. India now ranks 26th in terms of image, 11th in openness and 32nd in managerial practices.

About other countries, the institute’s report said that Hong Kong came at the top spot as it is diversified and therefore safer from economic shocks within the region. The country is business-friendly, promoting competition, and at the same time investing in public education. But the rest of Asia, overall, did not advance much on the 2016 ranking, with countries like Taiwan (14), Malaysia (19), The Korea Republic (29), and Indonesia (48) losing ground.

The report also noted that the United States was knocked out of the top spot in this year’s ranking of the world’s most competitive countries, a position it has held since 2013, falling two positions on the annual ranking, supplanted by Hong Kong and Switzerland.

The CNX Nifty is currently trading at 8157.70, down by 20.80 points or 0.25% after trading in a range of 8144.90 and 8213.60. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 7.75%, Tata Motors up by 5.83%, Hindalco up by 2.72%, NTPC up by 2.51% and Aurobindo Pharma up by 2.17%. On the flip side, Sun Pharma down by 5.57%, GAIL India down by 2.82%, Infosys down by 2.01%, Tata Power down by 1.86% and Adani Ports & Special down by 1.45% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.76%, Shanghai Composite up by 2.63%, Nikkei 225 up by 0.77% and Hang Seng was up by 1.41%. On the flip side, Taiwan Weighted was down by 0.31%, Jakarta Composite down by 0.45% and FTSE Bursa Malaysia KLCI down by 0.22%.