Local equity markets continue to stagger under pressure

Local equity markets after getting a muted start continue to stagger under pressure, as funds and retail investors relentlessly pocket profit after previous session’s strong rally. Stocks from Auto, Fast Moving Consumer Goods (FMCG) and Oil & Gas stocks are the ones that are deterring the sentiment. However, stocks from Realty, Consumer Durable and Power counters have featured in the best list of performers. 30 share index, Sensex, after shedding over 25 points, is currently oscillating sub 17400 level. Similarly the widely followed index, Nifty, to appears to be consolidating around the previous closing level. However, the trend seems to be exceptional for broader indices, as both Midcap and Smallcap index, were trading with gains of over half a percentage each.

On the global front, Asian markets showcased resilience, as investors started the month digesting a wide range of regional economic data, while sentiment remained positive following a positive end to the European summit. The main economic number to come out over the weekend was data relating to Chinese manufacturing, which although lower than in May, came in higher than expected. The official purchasing managers' index, came out at 50.2 -- its lowest level since November, but higher than a predicted 49.8. 

Meanwhile, Nikkei Average gained after the Bank of Japan's quarterly “tankan” survey, a measure of business confidence in Japan, surpassed expectations. The survey's headline diffusion index for manufacturers improved to a reading of minus one, compared with a minus three forecast by economists. Meanwhile, the US future indices, continued to depict somber mood.

Closer home, the BSE Sensex is currently trading at 17,394.05, down by 35.93 points or 0.21%. The index, has so far, touched a high and low of 17,464.47 and 17,379.75 respectively.  15 stocks were advancing against 15 declinning one's on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.66% and 0.84% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.35%, CD up by 1.24%, Power up by 0.81%, CG up by 0.66% and TECK up by 0.18%. While, Auto down by 0.58%, FMCG down by 0.45%, Oil and Gas down by 0.43%, IT down by 0.43% and Bankex down by 0.06% were the top losers on the index.

Meanwhile, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) is advocating the idea of fast tracking the process of getting back the hoards of black money that are lying in Swiss banks which would help Asia’s third largest economy in addressing economic challenges and bring it back on track. The FICCI President opined that the issue of repatriation of black money from abroad without asking the countries to disclose the identity of the depositor could bring the economy out of doldrums.

FICCI had citied a series of reasons like monetary tightening, delays and uncertainty over key economic legislations, project delays on account of factors including stalled environmental clearances, problems in land acquisition, prolonged pause in reforms and an atmosphere of unwillingness in decision making in bureaucracy, for the country's economic challenges. The industry body early in June had submitted a twelve point agenda for reviving India’s flagging economic growth to the then Union Finance Minister Pranab Mukherjee, who is now considered by many as the frontrunner in the race of becoming President of India.

FICCI President RV Kanoria also cited examples of nations like Germany, which have signed agreements with the government of Switzerland to retrieve their money. Despite country's economy growing at a steady pace since 1991, the economic situation in India is similar to the way it was in the years before 1991, the year in which India took a decisive turn towards market - friendly policies and opened its market for the foreign investors for the first time as a consequence of the huge economic crisis post-independence. Apart from regretting the fact that the economy which has the potential to grow in double-digits is currently in dismay, the body also underscored that India’s fiscal deficit is widening and the current borrowings have risen to 20% of GDP from 10% earlier.

The industry body also considered poor performance of the union government as one of the many reasons for the overall negative sentiment prevailing in India and urged the Centre to work towards reviving sentiment. FICCI, however, commended the performance of independent states which are outperforming other states. Voicing its support for the Goods and Service Tax (GST), FICCI highlighted that its implementation is likely to double up per-capita income.

The S&P CNX Nifty is currently trading at 5,271.65, down by 7.25 points or 0.14%. The index has touched a high and low of 5,289.70 and 5,265.70 respectively.  There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were ACC up by 2.13%, DLF up by 1.58%, Cairn up by 1.58%, NTPC up by 1.29% and SAIL up by 1.27%. On the flip side, Hero MotoCorp and Jindal Steel were down by 1.83%, Bajaj Auto down by 1.53%, ICICI Bank down by 1.35% and ONGC down by 1.28%, were the major losers on the index.

All the Asian equity indices were trading in the green; Nikkei 225 gained 0.42%, Kospi composite added 0.23%, Taiwan Weighted index jumped 0.82%, Jakarta Composite surged 0.96%, Strait Times soared 0.71% and KLSE composite advanced 0.26%.

Hang Seng Index remained closed due to a public holiday today.