Subdued global cues drag benchmarks lower; Nifty holds 5,300 level

Sentiments once again turned bearish and benchmarks snapped the day’s trade in red as market participants chose to take some profits off the table after the significant rise in previous session amid subdued global cues. The undertone has been hit by concerns that a global economic slowdown will hurt corporate earnings. The sentiment in the domestic markets is also cautious ahead of Thursday’s important session. Results from IT giants, TCS and Infosys will vie for investors’ attention along with the latest IIP data.

However, the down side remained capped and Nifty managed to hold its crucial 5,300 level at the end on report that the rainfall deficit over the past week has fallen to 23%, a sign that monsoon has arrived at most parts of the country. While certain parts of western India have yet to be covered, the Indian Meteorological Department Director, S C Bhan said there is no need to worry because the monsoon is expected to cover the whole country by today.

The global cues remained un-supportive as US markets, overnight, ended lower on various profit warnings from the technology sector companies’ adding to concerns, the economy is losing steam. However, Asian markets, after a subdued opening, managed to close on a positive note. Though, Japanese Nikkei edged lower as yen rose to a five-week high against the euro before Bank of Japan’s policy decision tomorrow. Moreover, European counters too traded choppy in the early trade.

Back home, bourses traded in a tight band throughout the session but below their equator led by selling in Auto and FMCG segments. Auto shares witnessed profit taking after recent gains following encouraging sales growth of 8.3% in June compared to the same month last year. Tata Motors was the top loser down 2.2% in the auto pack. Other losers include, Maruti Suzuki, Bajaj Auto, Hero Motocorp and Mahindra & Mahindra. Besides, FMCG shares were down on concerns that lower agri output would lead to higher input costs. ITC and Hindustan Unilever were both down over 1% each. However, good set of Q1 FY13 numbers from HDFC also failed to cheer the market’s mood. The non-banking finance company registered 19% rise in April-June quarter net profit at Rs 1001.91 crore as compared to Rs 844.50 crore in the similar quarter a period ago.

Bucking the trend, shares of Fertiliser companies like Zuari Industries, Nagarjuna Fertilizers & Chemicals, Chambal Fertiliser & Chemicals, Rashtriya Chemicals & Fertilizers and Deepak Fertilisers and Petrochemicals Corporation edged higher in the trade on reports that southwest monsoon has picked up pace, and is now on the verge of covering almost the entire country, while, rally in AP papers on delisting buzz also spelled optimism over other paper stocks viz. Tamil Nadu Newsprint & Papers and West Coast Paper. Meanwhile, Financial Technologies (India) rose after capital market regulator Securities & Exchange Board of India (SEBI) approved MCX Stock Exchange to launch stock trading.

The broader indices, after trading in green for most part of the day, ended in the negative terrain with BSE Mid cap and Small cap indices down by 0.12% and 0.24% respectively moreover, the market breadth remained in favor of declines as there were 1,617 shares on the losing side against 1,211 shares on the gaining side while 112 shares remained unchanged.

Meanwhile, the overall volumes remained over Rs 1.17 lakh crore while the turnover for NSE F&O segment remained on the lower side as compared to that on Tuesday at over Rs 0.87 lakh crore.

The BSE Sensex lost 129.21 points or 0.73% to settle at 17,489.14, while the S&P CNX Nifty declined by 39.05 points or 0.73% to close at 5,306.30.

The BSE Sensex touched a high and a low of 17,582.99 and 17,466.99 respectively. The BSE Mid cap index was down by 0.12% and Small cap index down by 0.24%.

L&T up 1.20%, NTPC up 0.44%, Infosys up 0.29%, Gail India up 0.25% and Coal India up 0.03% were the major gainers on the Sensex, while Hindalco down 2.74%, Wipro down 2.68%, Tata Motors down 2.03%, Sterlite Industries down 1.89% and Bharti Airtel down 1.87% were top losers on the index.

The only gainer on the BSE sectoral space was Capital Goods up 0.37%, while Auto down 1.18%, FMCG down 1.14%, Realty down 1.06%, Metal down 1.05% and Oil & Gas down 1.05% were top losers on the BSE sectoral space. 

Meanwhile, in an attempt to help ailing five PSU’s, a total investment of Rs 4,575 crore is being considered by the Ministry of Heavy Industries and Public Enterprises, which also includes revival  of Lucknow-based Scooters India without inducting any strategic partner. The proposals to revive the PSUs are under different stages of approval.

The ministry has also appointed renowned consultants for formulation of appropriate revival plans and strategy to restructure these PSUs. The PSU’s, which will be revived through induction of funds by the government, include HMT, HMT Bearings, HMT Watches, newsprint-maker NEPA, Nagaland Pulp and Paper.

The maximum investment of Rs 1,292 crore has been set aside for the NEPA, followed by HMT Watches Rs 1,500 crore, HMT Rs 992 crore and Nagaland Pulp and Paper Company Rs 679 crore and HMT Bearings Rs 112 crore. Further, Cement Corporation of India and Ranchi-based Heavy Engineering Corporation have already been revived with government’s aid of Rs 1,716 crore and about Rs 1,400 crore respectively.

The S&P CNX Nifty touched a high and low 5,336.45 and 5,300.25 respectively.

The top gainers on the Nifty were L&T up 1.32%, Kotak Bank up 1.31%, BPCL up 0.92%, Power Grid up 0.66% and Bank of Baroda up 0.54%. On the flipside, Hindalco down 3.25%, Reliance Infra down 2.64%, Tata Motors down 2.23%, Wipro down 2.21% and Siemens down 2.21% were the top losers on the index. 

The European markets were trading mixed, as France's CAC 40 down 0.18%, Germany's DAX up 0.59% and United Kingdom’s FTSE 100 down 0.12%.

Most of the Asian markets closed in green on Wednesday as it went up in the latter part of the day from the bearish zone offsetting some of the earlier losses, due to fall in US indices and concerned about Italy’s financial problem which sparked fresh fear in investors mind. The stocks had plunged to new low after Germany delayed to launch a permanent bailout fund to rescue debt ridden euro zone.

Nikkei fell to two weeks low and Kospi Composite Index continued to lose its market value for fourth consecutive day of trading. While Shanghai Composite ended its day’s trade on a positive note after making loses in two of its consecutive sessions; cement coal and machinery shares made gains on the hopes of government led-investments as China seek to boost its declining economic growth. Hang Seng Index after starting in red, due to slide in US markets adding to worries related to Europe and China will Bank and property developers taking the hit, managed to shut in green.