Sensex recuperates some ground to trade above 16,400 bastion

Volatility is playing at the fore on the penultimate day of May month’s F&O expiry series, as the barometer gauges swirling in and around the important psychological level, have currently slashed some losses. Sensex, recuperating some lost ground is trading above the 16,400 crucial level. However, widely followed 50 share index, Nifty, is seen testing the 5,000 mark ahead of the release of fourth GDP numbers. The trend is also exceptional for broader indices, which have magnified losses.

Support from Information Technology, Fast Moving Consumer Goods and Technology counters, is providing some solace to otherwise gloomy global set-up. European counterparts, witnessing nasty laceration are languishing at the bottom, tracing the bond yields, which surged after the country’s debt was pushed further into junk late the prior day. Subdued performance of Asian equities is also bothering already flexed investor’s. Back home, underlying weakness of auto, consumer durable and realty stocks too endorsing weakness of the bourses.

 The BSE Sensex is currently trading at 16,402.58, down by 36.00 points or 0.22% after trading as high as 16408.85 and as low as 16,299.53. There were 14 stocks advancing against 16 declines on the index.

The broader indices enticed additional weakness; the BSE Mid cap index declined 0.92% and Small cap index dropped 0.71%.

On the BSE sectoral space, IT up 1.14%, TECk up 1.08%, FMCG up 0.20% and Oil & Gas up by 0.19% were the only gainers, while Auto down 3.375%, Consumer Durables down 1.59%, Realty down 1.24%, Bankex down 1.24%, and Capital Goods down 1.10% were the major laggards in the space.

Maruti Suzuki up 1.96%, Bharti Airtel up 1.82%, Tata Power up 1.67%, Infosys up 1.66% and Sun Pharma up 1.14% were the major gainers on the Sensex, while Tata Motors down 11.42%, BHEL down 2.48%, DLF down 2.45%, ICICI Bank down 1.54% and Sterlite Industries down 1.49% were the major losers in 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 crores for the sector. The move is likely to come as a big relief for the sector which is reeling under loans worth Rs 1,55,809 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 4,966.55, lower by 23.55 points or 0.47% after trading as high as 4,966.55 and as low as 4,966.55. There were 17 stocks advancing against 33 declines on the index.

The top gainers on the Nifty were Ambuja up 3.07%, Maruti Suzuki up 1.87%, Tata Power up 1.66%, Bharti Airtel up 1.58% and Infosys up 1.54%.

Tata Motors down 11.64%, IDFC down 3.73%, R Infra down 3.73%, BHEL down 2.82% and BPCL down 2.60% were the major losers on the index.

In the Asian space, Shanghai Composite declined 0.21%, Hang Seng plummeted 1.92%, Jakarta Composite eased 0.03%, Nikkei 225 dropped 0.28%, Straits Times Index fell 0.51%, KOSPI Composite Index shed 0.27% and Taiwan Weighted plunged 1.10%.

On the other hand only KLSE Composite advanced by 0.63%.

The European markets continued to reel under pressure as France’s CAC 40 plunged 1.55%, Germany’s DAX sank 0.94% and United Kingdom’s FTSE shed 1.32%.