Retracement of Rupee from day's high level offers some solace to gasping Indian equity markets

Some solace came to the Indian equity markets with the retracement of Indian rupee from day's high level , which prompted the barometer gauges to ricochet from intra-day’s low level touched in the opening bell. Bounce-back of Auto sector also aided in capping the losses of the bourses, which participating in global gut, indicated a downtrend for the fourth session in row. On the global front, Asian stocks slumped on Monday with Japan's Topix Index, a broader measure of the Japanese equity market activity, tumbling to its lowest since 1983 to 2.4% after poor unemployment data in the U.S., casted further doubts over the health of the global economy. After markets closed on Friday, the U.S. reported nonfarm payrolls rose 69,000 in May, the smallest increase for a year, while unemployment in the world's largest economy edged up by major 8.2%. The US future indices indicated a downtick on the screen trade.

Back home, Consumer Durables, Realty and Fast Moving Consumer Goods were the worst hit in the BSE sectoral front, dragging 30 scrip sensitive index, Sensex, below the 15900 level, with colossal loss of over a century of points. Capital goods stocks fell on concerns of slowing economy denting new order inflow. The 50 share index, Nifty, was currently oscillating near the 4800 psychological level. Meanwhile, broader indices too trimmed losses in line with the frontline indices. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1341:731, while 96 shares remained unchanged.

The BSE Sensex is currently trading at 15,846.35, down by 118.81 points or 0.74%. The index has touched a high and low of 15,868.16 and 15,748.98 respectively. There were only 2 stocks advancing against 28 declines on the index.

The broader indices too trimmed some loss; the BSE Mid cap and Small cap indices were trading lower by 0.84% and 0.66% respectively.

Selling was witnessed across the board, however, the major losing sectoral indices on the BSE were, Consumer Durables (CD) down by 2.61%, Realty down by 2.04%, FMCG down by 1.17%, Power down by 1.15% and Metal down by 0.98%. On the flip side, Auto up by 0.01% was the lone gainer on the BSE Sectoral front.

The only gainers on the Sensex were Tata Motors up by 1.27% and ONGC up by 0.73%. On the flip side, DLF down by 4.14%, GAIL India down by 2.81%, Bharti Airtel down by 2.11%, Hindalco Industries down by 1.93% and Sterlite Industries down by 1.86% were the top losers on the Sensex.

Meanwhile, the depreciation of rupee, high levels of inflation and a substantial fiscal deficit are expected to pull down growth in most sectors of the economy in the April-June quarter, says a survey by the Confederation of India Industries (CII). The survey which was conducted across 114 sectors involving 35,000 companies found that almost all sectors of the economy expect deceleration in the first quarter of the current fiscal.  

Sectors like electronic motors, earthmoving and construction equipment, rubber goods, tyres and crude are all expected to register a low growth in the range of 0 to 10%. The share of such sectors has moved up from 42.2% in Q1 of 2011 to 52.6% in the Q1 of 2013.

Sectors expected to have negative growth rate are textile machinery, transformer and pumps and their share too is expected to go up from 5.2% in Q1 2011 to 15.7% in Q1 2013. Sectors such as automobile, energy meters, ball and roller bearings and scooters are expected to experience growth rates in the range of 10-20% but their share in the overall growth scenario too is expected to decrease to 24.5% in the quarter under review from 31.8% in the like period of the previous financial year. Sectors foreseen to witness excellent growth rate i.e. in the range of more than 20% include LCD, LED, and microwave ovens.

As per the survey, slowdown in growth is due to the rate cuts made by the Reserve Bank of India (RBI) in its attempt to control inflation and the global slowdown. Hence it has been suggested that the government and the RBI come up with a concrete recovery plan to put the economy back on the path of growth.

The S&P CNX Nifty is currently trading at 4,800.20, lower by 41.40 points or 0.86%. The index has touched a high and low of 4,807.95 and 4,770.35 respectively.  There were only 5 stocks advancing against 45 declines on the index.

The top gainers of the Nifty were Tata Motors up by 1.34%, ONGC up by 0.85%, Ambuja Cement up by 0.67%, Bank of Baroda up by 0.64% and BPCL up by 0.57%.

On the flip side, DLF down by 4.44% Cairn India down by 4.28%, Dr Reddy down by 2.91%, GAIL India down by 2.53% and Hindalco down by 2.27%, were the major losers on the index.

All the Asian counters were trading in the red; Shanghai Composite declined by 1.86%, Hang Seng plunged 2.35%, Jakarta Composite plummeted by 3.19%, KLSE Composite declined 0.93%, Nikkei 225 slid 2.04%, Straits Times lost 1.44%, KOSPI Composite got pounded by 2.78% and Taiwan Weighted pummeled by 2.88%.