Benchmarks enlarge losses; Sensex slips below 26500 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Nifty losing around 100 points and Sensex falling below its crucial 26500 level, in absence of positive triggers and profit booking in frontline line blue-chip stocks. Sentiments remained down-beat with report that India’s merchandise exports contracted again, albeit at their slowest pace in 18 months in May as non-petroleum exports finally turned positive, led by exports of engineering goods and gems and jewellery. Exports contracted at 0.79% in May while imports slipped 13.16%, leaving a trade deficit of $6.27 billion. Further, investors turned jittery with the report that India's monsoon deficit has widened to 25% since the beginning of this month as rainfall in the past day was less than half of the normal level, increasing the anxiety of farmers. Weather scientists say total rainfall is well below average, primarily because of the monsoon hit peninsular India a week late and has not progressed smoothly after that.  However, losses remained capped with a report that India with a low leverage score looks promising among emerging Asian countries, which can deliver a solid growth rate and where the potential for a significant expansion is maximum.

On the global front, Asian markets were trading lower in the first half, as traders turned jittery after the Federal Reserve's cautious policy stance and with Japanese equities hit hard by a strong yen as the Bank of Japan refrained from taking further stimulus steps. US Federal Reserve Chair Janet Yellen had kept the interest rates unchanged on Wednesday and signaled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years. Overnight, US stocks relinquished gains and closed lower on Wednesday, stretching a losing streak to five days, as investors weighed the Federal Reserve's decision to delay rate increases.

Back home, all sectoral indices on the BSE were in the red with Teck index emerging as the top loser, down by over a percent followed by Capital Goods and Banking indices among others. In scrip specific development, Ujjivan Financial Services have dipped after the Reserve Bank of India (RBI) notified that the aggregate foreign shareholdings in the company has crossed the permissible limit, which means overseas investors will not be able to buy further equity in the company. On the other hand, Alstom T&D gained after the company bagged contracts worth over Rs 202 crore from Power Grid Corporation of India (PGCIL) for execution of two projects in Madhya Pradesh. Meanwhile, shares of all three listed associate banks of State Bank India have moved higher by up to 20 percent for the second straight trading session, after the Union Cabinet on Wednesday gave a go-ahead to the merger of five associate lenders and Bharatiya Mahila Bank with the SBI.

The market breadth on BSE was pessimistic, out of 2208 stocks traded, 684 stocks advanced, while 1402 stocks declined on the BSE.

The BSE Sensex is currently trading at 26423.44, down by 302.90 points or 1.13% after trading in a range of 26393.55 and 26686.03. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.30%, while Small cap index lost 0.51%.

The top losing sectoral indices on the BSE were TECK down by 1.24%, Capital Goods down by 1.20%, Bankex down by 1.18%, FMCG down by 1.16% and IT down by 1.06%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were SBI up by 0.37% and GAIL India up by 0.28%. On the flip side, ICICI Bank down by 3.08%, Maruti Suzuki down by 2.73%, NTPC down by 2.24%, Bharti Airtel down by 2.05% and ITC down by 1.99% were the top losers.

Meanwhile, India’s merchandise exports extended its declining trend for the eighteenth month in row, though it declined marginally in dollar terms and posted a small increase in rupee terms in May 2016. After months of fall, India’s exports looked to be stabilizing, which suggested that the worst can be over. Exports fell marginally by 0.79 percent to $22.17 billion compared to the same month last year, hit by low global demand and falling commodity prices. On the other side, Imports declined by 13.16 per cent to $28.44 billion during the month, bringing down trade deficit to $6.27 billion compared to $10.40 billion in May 2015. The trade deficit for April-May, 2016-17 was estimated at $11117.77 million which was lower than the deficit of $21398.54 million during April-May, 2015-16.

As per the data released by the Commerce Ministry, exports during May, 2016 were valued at $22170.62 million which was 0.79 per cent lower in Dollar terms than the level of $22346.75 million and in rupee terms stood at Rs 148336.31 crore, 4.04 per cent higher compared to Rs 142572.92 crore during May, 2015.Cumulative value of exports for the period April-May 2016-17 was $42739.47 million, as against $44401.47 million, while in rupee term it stood at  Rs 285056.42 crore compared to Rs 280973.36 crore, registering a negative growth of 3.74 per cent in Dollar terms and 1.45 per cent in Rupee terms over the same period last year.

Meanwhile, Imports during May, 2016 were valued at $28443.52 million in dollar terms, 13.16 per cent lower over the level of imports valued at $32752.99 million in same period last year. In rupee terms imports were valued at Rs 190306.19 crore, 8.93 per cent lower than Rs 208965.06 crore during May 2015. Cumulative value of imports for the period April- May 2016-17 in Dollar terms was $53857.24 million, as against $65800.01 million, registering a negative growth of 18.15 per cent in Dollar terms. In rupee terms the imports for the period April-May 2016-17 stood at Rs 359229.90 crore, down by 13.72 per cent compared to Rs 416345.69 crore in the same period last year.

Oil imports which accounts for 31 percent of the total imports, dropped by 30.45 per cent during May, 2016 at $5938.59 million than oil imports valued at $8538.67 million in the corresponding period last year. Oil imports during April- May, 2016-17 were valued at $11594.51 million which was 27.45 per cent lower than the oil imports of $15981.59 million in the corresponding period last year. Non-oil imports during May, 2016 were estimated at $22504.93 million which was 7.06 per cent lower than non-oil imports of $24214.32 million in May, 2015. Non-oil imports during April- May 2016-17 were valued at $42262.73 million which was 15.17 per cent lower than the level of such imports valued at $49818.42million  in April- May, 2015-16.

The CNX Nifty is currently trading at 8106.85, down by 99.75 points or 1.22% after trading in a range of 8100.35 and 8180.65. There were 4 stocks advancing against 47 stocks declining on the index. The top gainers on Nifty were Hindalco up by 0.65%, GAIL India up by 0.54%, SBI up by 0.12% and Bank Of Baroda up by 0.07%. On the flip side, Bharti Infratel down by 3.22%, ICICI Bank down by 2.94%, Maruti Suzuki down by 2.79%, Ultratech Cement down by 2.41% and NTPC down by 2.34% were the top losers.

Asian markets were trading in red; Hang Seng declined 2.02%, Nikkei 225 tumbled 2.79%, Taiwan Weighted decreased 1.31%, KOSPI Index shed 0.93%, Shanghai Composite slipped 0.13% and FTSE Bursa Malaysia KLCI declined 0.69% and Jakarta Composite was down by 0.06%.