Sensex, Nifty recovers some lost ground

Indian equity markets recovered from lost ground and currently trading at high point of the day but in negative territory as few blue chip stocks finding some support at lower levels. In currency markets, Indian rupee continued to fall against American currency on increasing dollar demand from importers. The benchmarks Nifty and Sensex were trading in a narrow band trying hard to get back in the green. On sectoral front, Automobile stocks, led by Tata Motors, continue to trade weak because of sustained selling pressure. Bank, realty and capital goods stocks were also trading weak. On the other hand, Power and metal stocks are off their lows now. Select oil, pharmaceuticals, FMCG and information technology stocks were trading higher. On the global front, Asian shares were under amid lasting worries about the financial situation in Europe and woes about Spain's increasing borrowing costs and prospects that more spending may be needed to hold up its ailing banks. Back home, the market breadth favoring negative trend; there were 1,005 shares on the gaining side against 1,284 shares on the losing side while 131 shares remained unchanged.

The BSE Sensex is currently trading at 16,367.68, down by 70.90 points or 0.43%. The index has touched a high 16,391.90 and low 16,299.53 of respectively. There were 14 stocks advancing against just 16 declines on the index.

The broader indices too following the benchmarks; the BSE Mid cap and Small cap indices down by 0.40% and 0.26% respectively.

The top gaining sectoral indices on the BSE were Information Technology (IT) up by 0.64%, TECk up by 0.50% and Fast Moving Capital Goods (FMCG) up by 0.07%. While, Auto down by 3.07%, Consumer Durables (CD) down by 1.13%, Bankex down by 1.09%, Capital Goods (CG) down by 0.81% and Realty down by 0.74% were losers on the index.

The top gainers on the Sensex were Tata Power up by 1.56%, Sun Pharma up by 1.47%, Maruti Suzuki up by 1.15%, Infosys up by 1.07%, and Jindal Steel up by 1.06%.

On the flip side, Tata Motors down by 8.95%, BHEL down by 1.56%, DLF down by 1.49%, SBI down by 1.24% and Coal India down by 0.92%, were the major losers on the index.

Meanwhile, acknowledging that the textile industry needs help during the current times, the government has decided to restructure loans worth Rs 35,000 crore for the sector. The move is likely to come as a big relief for the sector which is reeling under loans worth Rs 155,809 crore.

The textile sector has been recently hit by poor global as well as domestic demand. Also yarn prices have taken a hit which has reduced the ability of the sector to pay back its loans. It is also facing difficulty in financing its working capital. 

However now the government will be issuing directions to the banks and an inter-ministerial committee of senior officials will be constituted to expedite the process of restructuring. This decision was taken in a meeting between the Commerce and Textiles Minister Anand Sharma and Finance Minister Pranab Mukherjee.

Textile industry associations have also been demanding that the industry be granted a two year moratorium on long term loans. However the Finance Ministry has said a decision regarding this will be taken in conjunction with the RBI.

Furthermore, the Finance Ministry, in a bid to avoid asset reclassification may examine the demand for special provision in NPA norms. It may also aid the eroded working capital by converting it into working capital term loans repayable over a period of 3-5 years.

The S&P CNX Nifty is currently trading at 4,964.15, lower by 25.95 points or 0.52%. The index has touched a high and low of 4,970.40 and 4,945.70 respectively. There were 14 stocks advancing against 35 declines and one remained unchanged on the index.

The top gainers of the Nifty were Sun Pharma up by 1.36%, Tata Power up by 1.23%, Ambuja Cement up by 1.16% HCL Tech up by 1.05%, and Jindal Steel up by 1.04%. 

On the flip side, Tata Motors down by 9.28%, BPCL down by 2.63%, IDFC down by 2.05%, Reliance Infra down by 1.94% and Axis Bank down by 1.86% were the major losers on the index.

Most of the Asian equity indices continued to reel under pressure; Jakarta Composite down 0.21%,  Shanghai Composite down 0.13%, Hang Seng Index  down 1.84%, Straits Times Index  down 0.21%, KOSPI Composite Index down 0.27%, Taiwan Weighted  down 1.10%, and Nikkei 225 was down 0.28%.

On the other hand, KLSE Composite up by 0.17% was only gainer in the Asian pack.