Benchmarks dip to intra-day’s low; broader indices hold their neck above the water

After being on losing spree from the morning deals, benchmark equity indices have dipped their head to intra-day’s low level, as negative global set-up, continue to discourage investors from investing into risky equities. Lack of additional stimulus measures announcement after the conclusion of Federal Reserve's two days meeting has mainly left the markets high and dry, with the investor’s now shifting their focus to European Central Bank meeting later in the day for further cues. The speculation has been rife that ECB could renew its bond buying programme in order to bring down borrowing costs for Italy and Spain to head off a brewing debt crisis, a development if materializes could revive risk appetite.

30 share index of Bombay Stock Exchange (BSE), Sensex, offloading over half a percent, was currently staggering below the 17200 psychological level, while the 50 share index, Nifty, declining in similar magnitude, was gyrating below the 5250 bastion. However, commendable resilience was put forth by broader indices, as both Midcap and Smallcap were holding their neck above the water in green. Sectorally, stocks from Consumer Durable, Fast Moving Consumer Goods and Power counters emerged as the prominent gainers, while stocks from Oil & Gas, Bankex and Auto counters remained as the pocket of weakness. Being a festive day, volumes remained lower, with the overall market breadth on BSE, being in the favour of advances which thumped declines in the ratio of 1238:1055, while 125 shares remained unchanged.

 The BSE Sensex is currently trading at 17,171.41 down by 85.97 points or 0.50% after touching a high of 17246.01 and a low of 17,157.28. There were 10 stocks advancing against 20 declining one’s on the index.

The broader indices manage to sustain gains; the BSE Mid cap index held up by 0.01%, while Small cap index was trading higher by 0.18%.

On the BSE sectoral space, CD up by 0.33%, FMCG up by 0.26%, CG up by 0.18%, Power up by 0.16% and Health Care up by 0.08% while Oil & Gas down by 0.96%, Bankex down by 0.81%, Auto down by 0.59%, Metal down by 0.57% and PSU down by 0.56% were the losers on the index.

NTPC up by 2.10%, Jindal Steel up by 1.23%, Bharti Airtel up by 0.96%, Dr Reddy’s Lab up by 0.46% and TCS up by 0.40% were the gainers on the Sensex, while Tata Motors down by 1.89%, HDFC Bank down by 1.52%, Tata Power down by 1.51%, Sterlite Industries down by 1.42% and SBI down by 1.21% were the major losers in the index.

 Meanwhile, reflecting both weak global demand, as well as likely supply side issues the Indian exports have extended their declining trend for the second straight month in June. Impact of slowdown in US, European nations, China and Japan was clearly visible on the Indian exports, which fell by 5.5% to $25 billion in June, compared with $26.5 billion in the corresponding month last year, while imports declined by 13.5% to $35.4 billion, compared with $40.9 billion in June 2011.

As the imports declined sharply, the trade deficit for June fell to $10.31 billion from $14.4 billion in June 2011. For the quarter ended June too, the trade deficit narrowed to $40.05 billion from $46.23 billion in the corresponding period last year. Cumulative value of exports for the period April-June 2012-13 was $75.20 billion compared to $76.51 billion, down by 1.70% in Dollar terms, however in Rupee terms it registered  a growth of 18.97% to Rs 407055.99 crore from Rs 342163.55 crore in the same period last year.

In June, non-oil imports fell 17.80% to $22.68 billion, compared with $27.59 billion in the year-ago month, indicating a slowdown in the domestic economy and a fall in demand by the Indian industry. Oil imports during April-June, 2012-13 were valued at $41585.0 million higher by 5.48% from $39425.0 million in the corresponding period last year.

Non-oil imports during the April-June period fell 11.6% to $73.7 billion, compared with $83 billion in the corresponding period of the previous year. Non-oil imports during April-June, 2012-13 too were down by 11.57% to $73.67 billion compared to $83.32 billion in April-June, 2011-12.

Weak exports and wide trade and current account deficits have added to India’s economic growth outlook, which slipped to a nine-year low of 6.5% in 2011-12. With markets in euro-zone, US, China and Japan still not showing healthy growth, the situation may worsen further for the Indian export.  

The S&P CNX Nifty is currently trading at 5218.80, down by 21.70 points or 0.41% after trading in a range of 5,236.90 and 5209.95. There were 19 stocks advancing against 31 declines on the index.

The top gainers on the Nifty were NTPC up by 2.10%, Jindal Steel up by 1.15%, Asian Paints up by 1.05%, Bharti Airtel by 0.92% and SAIL up by 0.70%. While, Tata Motors down by 2.02%, Cairn India down by 1.68%, Sterlite Industries and Tata Power down by 1.60% and Ambuja Cement down by 1.53% were the major losers on the index.

Asian indices continued reeling in red; Kospi Composite Index slid 0.56%,  Jakarta Composite  lost 0.50%, Hang Seng index  offloaded 0.82%, Straits Times shed  0.56%,  KLSE Composite inched lower by 0.03%, and  Shanghai Composite plunged by 0.64%  while Nikkei 225 up 0.13%, was the lone gainer on the gainer.

European markets got off to an optimistic start; France’s CAC40 was trading higher by 0.09%, Germany’s DAX shot up by 0.08% and UK’s FTSE100 added 0.26%.