Indian bourses continue weak trade; FMCG, Metal drag

Indian equity benchmarks continued their weak trade in the afternoon session on account of selling pressure, mainly in the metal counter. The mood on the street remained cautious with a private report stating that  Indian employers expect steady hiring outlook for next three months, but their confidence have dipped to the least optimistic level since 2005 amid uncertainties in global markets. Besides, weak trend in Asian markets too affected the market sentiment. The downside was however, capped with the report that the wholesale price index based inflation eased to 2.17 per cent in May this year from 3.85 per cent in April. In the currency front, the rupee firmed up 6 paise to 64.28 against the dollar in early trade even as traders expect an increase in interest rates by the US Fed at its policy meet today. In scrip specific development, Almondz Global Securities was trading in green after receiving the Certificate of Registration (CoR) as Research Analyst in terms of SEBI (Research Analysts) Regulations, 2014 to carry on the activities as a Research Analyst.

On the global front, Asian markets were trading mostly in red as investors remained cautious ahead of the US Federal Reserve’s (Fed) two-day meeting to decide on further interest rate hikes. Back home, the BSE Sensex is currently trading at 31079.94, down by 23.55 points or 0.08% after trading in a range of 31054.94 and 31183.11. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were Energy up by 1.33%, Oil & Gas up by 0.60%, Realty up by 0.24% and Capital Goods up by 0.17%, while FMCG down by 0.73%, Metal down by 0.73%, Basic Materials down by 0.52%, Power down by 0.37% and Utilities down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.91%, Dr. Reddys Lab up by 2.01%, Hero MotoCorp up by 0.83%, Power Grid up by 0.81% and ICICI Bank up by 0.46%. On the flip side, Wipro down by 2.41%, Cipla down by 1.73%, Asian Paints down by 1.50%, ITC down by 1.43% and HDFC down by 1.17% were the top losers.

Meanwhile, the Chief Economic Advisor Arvind Subramanian has said that the 13- year old Fiscal Responsibility and Budget Management (FRBM) framework has failed to prevent a build-up of dangerous fiscal imbalances and also did not succeed in putting debt in continuous declining trajectory. He added that FRBM in India worked up to certain point but not completely.

Subramanian has pointed out that when India first introduced FRBM around 2002-03, India was a very different country than what it is today. He explained that during 2002, the economic boom had not happened, in fact, things were looking pretty bad then, growth had declined, private investment had declined, and thus it was very different world then. He noted that today it's very different world because India is now much faster growing economy than in 2002 and added that there is a sense in which it is natural to review the FRBM.

In May last year, the FRBM committee was set up to review the working of the FRBM Act over the last 12 years and suggest the way forward 'keeping in view the broad objective of fiscal consolidation and prudence and the changes required in the context of the uncertainty and volatility in the global economy'. The panel, headed by former Revenue Secretary N K Singh, had recently suggested that fiscal deficit should be brought down to 2.5 percent of the GDP by 2022-23 in a phased manner.

The CNX Nifty is currently trading at 9588.85, down by 18.05 points or 0.19% after trading in a range of 9580.45 and 9627.40. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.83%, Bank of Baroda up by 2.33%, Dr. Reddys Lab up by 2.17%, Hero MotoCorp up by 0.81% and Power Grid up by 0.74%. On the flip side, Wipro down by 2.36%, Yes Bank down by 2.00%, Cipla down by 1.91%, ITC down by 1.64% and Asian Paints down by 1.63% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 55.69 points or 0.55% to 10,072.46, Shanghai Composite shed by 20.99 points or 0.67% to 3,132.76, Nikkei 225 declined 15.23 points or 0.08% to 19,883.52, Hang Seng dipped 10.16 points or 0.04% to 25,841.94 and KOSPI Index was down by 2.06 points or 0.09% to 2,372.64.

On the flip side, FTSE Bursa Malaysia KLCI increased 5.85 points or 0.33% to 1,790.29 and Jakarta Composite was up by 27.53 points or 0.48% to 5,735.18.