Benchmarks hover near intra-day’s low; murk US job data plays the havoc

Extended weekend failed to do any good to Indian equity markets as benchmark equity indices after starting the fresh week on a bleak note are hovering near their intra-day’s low. Lack of positive triggers on the home front combined with dreary global set up, has played curmudgeon for the market. Moreover, trader’s cautious approach ahead of the release of Infosys’ fourth quarter numbers, index of Industrial production (IIP) and Wholesale price index (WPI) is also restricting the breakout of the bourses.

Providing sympathy to deep growth concerns in world's biggest economy, regional counterparts slipped in early trade after weaker-than-expected US jobs data hit market sentiment. The US Labor Department reported on Friday that the number of unemployed workers hovered close to 13 million and hiring slowed, a warning sign that an economic recovery in the world's biggest economy may be in trouble. The Labor Department figures showed that the economy only pumped out 120,000 jobs last month, although the unemployment rate did dip from 8.3 percent to 8.2 percent -- a three-year low. Meanwhile, the US future indices were showing a downtick on the screen trade.

Back home, although weakness was witnessed across all the sectoral gauges, however, stocks from Metal, Capital Goods (CG) and Power counters were suffering maximum brunt of profit booking. BSE’s Sensex- after offloading over 200 points were hovering around the 17250 level. The widely followed NSE’s Nifty-after trimming over 50 points was trading sub 5250 crucial level. The broader indices too by now succumbed to selling pressure.

The BSE Sensex is currently trading at 17,277.97, down by 208.05 points or 1.19%. The index has touched a high and low of 17,407.66 and 17,261.00 respectively. There were 4 stocks advancing against 26 declines on the index.

Weakness could be sensed across broader space too; the BSE Mid cap and Small cap indices were trading lower by 1% and 0.39% respectively.

Metal down by 2.59%, CG down by 2.39%, Power down by 1.92%, Bankex down by 1.55% and Oil and Gas down by 1.40% were the top losers on the index. While, there were no gainers on the BSE Sectoral chart.

The top gainers on the Sensex were DLF up by 0.78%, HUL up by 0.69%, Bajaj Auto up by 0.56% and TCS up by 0.52%.

On the flip side, Hindalco down by 3.79%, BHEL down by 3.09%, Sterlite Industries down by 3.07%, Jindal Steel down by 3.06% and L&T down by 2.58% were the top losers on the Sensex.

Meanwhile, Indian economy is expected to grow at a slow pace of 6.1% in the calendar year 2012, as per Ernst & Young’s quarterly Rapid Growth Markets Forecast (RGMF). However, growth is expected to pick up by the second half if the global scenario improves. E&Y also believes that given India’s strong domestic demand and the macroeconomic resilience shown by it during the recent difficult times, will prompt a recovery in investments which could lead to the country achieving a 9% growth by 2014.

E&Y’s GDP estimates are much lesser than the government estimated number of around 7% for FY’13. It believes that though India has posted good numbers on the purchasing managers Index (PMI) and car sales data in January and February of 2012, have also hinted at a stronger growth, the country will have to address its inflation situation, before it can register a recovery.

In fact given the high rate of inflation, the RBI may not be in a position to cut interest rates which will impact growth. Also as the economy picks up momentum, it may be months before the core inflation takes a downward trajectory. The wholesale price inflation should trend down through 2012 to about 5% in Q4, reflecting the lagged impact of the weaker economy and lower food prices, the forecast said.

As per E&Y, India’s domestic demand-driven growth model is acting as a catalyst for attracting foreign investments into the country. Although the ongoing global uncertainty may have prompted global investors to become more cautious, India’s inherent advantages and proven resilience to counter-act macroeconomic challenges generally outweighs these concerns.

The S&P CNX Nifty is currently trading at 5,252.30, lower by 70.60 points or 1.33%. The index has touched a high and low of 5,287.90 and 5,249.80 respectively.  There were 7 stocks advancing against 43 declining one’s on the index.

The top gainers of the Nifty were Ranbaxy up by 2.35%, Dr Reddy’s up by 0.84%, DLF up by 0.66%, TCS up by 0.64% and HUL up by 0.63%.

On the flip side, JP Associates down by 3.95% Hindalco down by 3.87%, Sterlite Industries down by 3.21%, Sesa Goa down by 3.21% and Jindal Steel down by 3.16% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite slid 0.23%, Jakarta Composite trimmed 0.35%, KLSE Composite slot 0.29%, Nikkei 225 plunged 1.00%, Straits Times dipped by 0.85%, Seoul Composite plummeted 1.37% and Taiwan Weighted plunged by 1.25%.

Markets in Hong Kong remained closed on Monday on account Easter holiday.