Benchmarks extend losses; Metal, CG, and Realty drags

Indian equities continued to trade weak in the late morning session. On the global front, Asian markets were trading in red after ECB failed to deliver immediate action, also there were concern that Chinese monetary authorities too will go slow to ease policy. Back home, traders were seen piling up position in HC sector, while selling was witnessed in Metal, CG and Realty sector. Though, the monsoon worries are keeping the mood cautious as India Meteorological Department (IMD) had said that Monsoon rains will not be enough to save the country from its first drought in three years. The NSE Nifty and BSE Sensex were managing to hold their psychological 5150 and 17000 levels respectively. The market breadth on BSE was negative in the ratio of 1119:899 while 93 scrips remained unchanged.

The BSE Sensex is currently trading at 17059.11 down by 165.25 points or 0.96% after touching a high of 17164.48 and a low of 17039.32. There were 4 stocks advancing against 26 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index was down 0.49%, while Small cap index was down 0.40%.

On the BSE sectoral space, HC up by 0.20% was only the gainer while Metal down by 2.04%, CG down by 1.49%, Realty down by 1.24%, Bankex down by 1.15% and Power down by 1.10% there were losers on the index.

Dr Reddys Lab up by 0.70%, NTPC up by 0.37%, Cipla up by 0.21% and ONGC up by 0.04% were the gainers on the Sensex, while Tata Steel down by 2.62%, Hindalco Industries down by 2.31%, Coal India down by 2.31%, Sterlite Industries down by 2.24% and Tata Motors down by 1.93% were the major losers in the index.

 Meanwhile ,the India Meteorological Department (IMD) has finally said what the government has been hesitating to accept, IMD has said that monsoon rains will not be enough to save the country from its first drought in three years. The weather office said that rains over the entire June to September season were now expected to be less than 90 percent of long-term averages. Earlier it was reported that between June 1 and August 1, rainfall was about 19 percent below average, close to the 23 percent shortfall in the 2009 season.

The first two months of the monsoon season, the rainfall over the country as a whole up to July was 79% and in August too is expected to be normal. But the MET department has been reported saying that the rainfall in the next two months may remain below normal and around 91% due to the El Nino impact. IMD has said that El Nino conditions are building up in the equatorial Pacific with sea surface temperature (SST) anomalies of ≥ 0.5oC observed over much of the equatorial east Pacific during the recent two weeks. The latest forecasts from a majority of the dynamical and statistical models indicate strong possibility (with a probability of about 65%) for weak to moderate El Nino conditions to emerge during the next two months. 

Confirming that, based on the rainfall distribution over the country till date and outlook for the second half of the season, the seasonal rainfall of the entire southwest monsoon season (June to September) is likely to be deficient.

Meanwhile, the government too realizing the situation has said that it has prepared contingency plans for 320 districts where monsoon rains have been poor. The contingency plan prepared by Central Research Institute for Dryland Agriculture (CRIDA), apart from various other measures will provide knowledge input twice a week from ICAR besides seeds for alternate crop. The government is also trying to provide states with additional electricity to draw water from tube wells.

The S&P CNX Nifty is currently trading at 5,178.70, down by 49.05 points or 0.94% after trading in a range of 5,204.35 and 5,170.60. There were 8 stocks advancing against 42 declines on the index.

The top gainers on the Nifty were Ranbaxy up by 1.17%, Asian Paint up by 0.79%, DR Reddy up by 0.69%, Cipla by 0.64% and Ambuja Cement up by 0.33%. While, Tata Steel down by 2.71%, Reliance Infra down by 2.50%, Hindalco down by 2.39%, Sail down by 2.37% and JP Associates down by 2.33% were the major losers on the index.

Asian indices were trading in red; Kospi Composite Index down 1.11%,  Jakarta Composite  down by 0.48%, Hang Seng index  down by 0.98%, Straits Times down by 0.14%, KLSE Composite down by 0.18%, Taiwan Weighted down by 0.69% and Nikkei 225  down 1.18%, while Shanghai Composite gained 0.77%  was only the gainer.