Benchmarks continue to show signs of fatigue; Rupee depreciation bothers

Local barometer gauges continue to show signs of exertion after previous session’s up run, in light of gloomy global leads, which have weighed down heavily on the risk appetite of the local investor’s. Barometer 30 share index, Sensex, after reclaiming the 17k mark, is currently trading off it, with loss of close to 0.50 percentage points. Similarly, the widely followed 50 share index, Nifty, on NSE, after concluding after 5150 level, is currently oscillating sub that bastion. Domestically, depreciation of Rupee above ‘56.80/$’ psychological level combined with the glumness of Cement stocks have mainly casted a shadow into Indian equity markets. Cement stocks took a huge knock today after the Competition Commission of India slammed with more than Rs 6,000 crore fine on 11 cement companies, which were found violating the provisions of the Competition Act, 2002 for inflating prices by keeping production low. ACC, Ambuja Cements, Jaiprakash Associates, Grasim, Ultratech Cement, Madras Cement and India Cement were down 1.5-3.5%. However, retail related stocks, were trading jubilant after Commerce and Industry Minister Anand Sharma said that political consensus is building over allowing foreign direct investment in multi-brand retail in the next few days. Stocks of Koutons Retail, Cantabil Retail and Shoppers Stop were seen rallying in the range of 1-2%.

On the global front, Asian markets traded lower on Friday after ratings agency Moody's downgraded the credit scores of some of the world's largest banks. Moody's released the latest downgrades of 15 financial institutions, including Bank of America and Goldman Sachs, after the closure of U.S. markets on Thursday. In a statement the agency said, 'All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities.' Meanwhile, the US future indices continued to show sharp downtick in the screen trade.

Closer home, the BSE Sensex is currently trading lower by 76.46 points or 0.45% at 16,956.10. The index has touched a high and low of 16,956.10 and 16,855.85 respectively.  There were 9 stocks advancing against 21 declines on the index. The overall market breadth on BSE, however, continued to remain in the favour of advances which thumped declines in the ratio of 1158:929, while 103 shares remained unchanged.

The broader indices gained some additional traction in comparison to their morning deals; the BSE Mid cap and Small Cap indices were trading higher by 0.21% and 0.32% respectively.

The few gaining sectoral indices on the BSE were, HC up by 0.42%, Auto up by 0.31% and Realty up by 0.22%, Consumer Durable (CD) up by 0.16% and FMCG up by 0.07%. While, Metal down by 1.08%, Oil and Gas down by 0.64%, Technology down by 0.42%,Information Technology down by 0.41% and  Bankex down by 0.40% were the top losers on the index. The top gainers on the Sensex were Cipla up by 1.63%, Hero MotoCorp up by 1.42%, Maruti Suzuki up by 1.33%, TCS up by 0.89% and Mahindra & Mahindra up by 0.86%.

On the flip side, Tata Steel down by 1.66%, HDFC down by 1.55%, Hindalco Industries down by 1.53%, Sterlite Industries down by 1.31% and Reliance Industries down by 1.16% were the top losers on the Sensex.

Meanwhile, India’s Union Commerce and Industry Minister Anand Sharma expressed his conviction over early implementation of the government's decision to allow 51 percent foreign direct investment (FDI) in multi-brand retail, one of the crucial reforms that got deferred due to lack of political consensus. Exuding confidence that political consensus is emerging over liberalizing FDI in multi-brand retail, the commerce minister was hopeful that some positive results would come to the fore in next few weeks.

Government’s contentious decision to liberalizing FDI in multi-brand retail, which they believed would open immense opportunities for domestic masses, had not gone down well with the BJP led NDA and other opposition parties while Trinamool Congress, one of the key allies of the ruling UPA government, too came out strongly criticizing government’s policy decision in the open, leading the government to defer the proposal to allow FDI in multi-brand retail.

However, the government seems to have revived its efforts to build political consensus on the contentious issue with Anand Sharma writing to three non-UPA chief minister Odisha’s Naveen Patnaik, Punjab’s Prakash Singh Badal and Uttar Pradesh’s Akhilesh Yadav seeking their support for early implementation of the government's decision. He has also elucidated various benefits like higher investments, better technologies and efficiencies to unlock the true potential of the agricultural value chain that would come to their states with the implementation of FDI in multi-brand retail. He also stated that the move is likely to open up immense employment opportunities for rural youth and make them stakeholders in the entire agriculture business chain from farm to fork.

The commerce minister also endeavored to allay some concerns pertaining to predatory measures that the multinational companies would employ to drive away small retailers by highlighting that the competition watchdog - Competition Commission of India (CCI) has been established by law to ensure that such practices receive great scrutiny. Citing various examples of developing economies like China, Brazil, Argentina, Singapore and Thailand, where FDI is permitted up to 100 percent in multi-brand retail, Sharma encouraged local retailers to resort to innovative ways to co-exist along with organized retailers.

The S&P CNX Nifty is currently trading at 5,133.00, lower by 32.00 points or 0.62%. The index has touched a high and low of 5,140.85 and 5,097.30 respectively.  There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Cipla up by 1.79%, Hero MotoCorp up by 1.37%, Maruti Suzuki up by 1.18%, Ranbaxy up by 1.09% and BPCL up by 0.74%.

On the flip side, Jaiprakash Associates down by 4.16%, Ambuja Cement down by 2.56%, ACC down by 2.29%, Hindalco Industries down by 1.94% and Tata Steel down by 1.74%, were the major losers on the index.

All the Asian equity indices were trading in the red. Nikkei fell 0.49%, South Korea’s Kospi plunged 2.26%, Hang Seng index dipped 1.08%, Straits Times declined 0.45% and Jakarta Composite dropped 0.88%.KLSE composite up by 0.41% was the lone gainer amongst the Asian pack.

Shanghai Composite remain closed today due to the Dragon boat festival.