Indian equities trim losses, trade on a firm note

Indian equities trimmed losses to trade in green in the late morning session. While on the global front, the majority of Asian markets were trading in red after Japan’s economy slowed more-than-expected and as evidence mounts of a worsening slowdown in China. Traders were seen piling up position in Oil & Gas, Realty and PSU sector, while selling was witnessed in Bankex, Auto and IT sector. In the scrip specific development, Gitanjali Gems gained on reporting a rise of 9.87% in its net profit at Rs 77.05 crore for the quarter, as compared to Rs 70.13 crore for the same quarter in the previous year.  Reliance Communications rose on reporting decent Q1 numbers. Subex trades surged on bagging five-year contract from MTN. The NSE Nifty and BSE Sensex were managing to hold their psychological 5300 and 17500 levels respectively.

The market breadth on BSE was positive in the ratio of 1250: 767 while 83 scrips remained unchanged.

The BSE Sensex is currently trading at 17577.98 up by 20.24 points or 0.12% after touching a high of 17594.55 and low of 17531.10. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 0.48%.

On the BSE sectoral space, Oil & Gas up by 1.23%, Realty up by 1.08%, PSU up by 0.65%, CD up by 0.64% and Power up by 0.50% were the gainers while Bankex by 0.34%, Auto down by 0.23%, and IT down by 0.08% were the losers on the index.

Maruti Suzuki up by 2.19%, Gail India up by 1.65%, Bharti Airtel up by 1.60%, Sterlite Industries up by 1.44%, ONGC up by 1.43% were the major gainers on the Sensex, while Tata Motors down by 1.57%, ITC down by 0.93%, ICICI Bank down by 0.82%, Tata Steel down by 0.66% and TCS down by 0.58% were the major losers on the index.

 Meanwhile, one thing that could act as an embarrassment to the government and increase its woes is going to be the downgrade of country’s sovereign rating. After Moody’s slashed India’s growth estimates last week, Fitch Ratings, which recently lowered India’s credit outlook to negative, has said that possibility of downgrading the country’s sovereign rating is more than 50 per cent in the next 12-24 months.

Negative outlook suggests that there is a more than likely chance of Fitch revising rating downwards from BBB- to BB+ in the next 12 to 24 months. Downgrading sovereign rating could impact investor sentiments and could lead to higher borrowing costs. While, the downgrade of credit outlook indicated that the country’s medium-to long-term growth potential could gradually deteriorate if further structural reforms are not hastened to create a more positive operational environment for business and private investments.

Earlier, in June mid, Fitch scaled down India’s sovereign credit outlook to ‘negative’ from ‘stable’. The rating agency had then went on to point out that the revision in outlook reflected the “heightened risks” that India’s medium-to-long-term growth potential would gradually deteriorate if further structural reforms are not hastened, including measures to enhance the effectiveness of the government and create a more positive operational environment for business and private investments. However, that time India’s sovereign rating at ‘BBB-’, a notch above the speculative grade was retained.

Recently, there has been slew of downgrades of India’s economic growth forecast from domestic, as well as international agencies including, Banking giant Citi, CLSA and Crisil to around 5.5 per cent, even the Reserve Bank of India (RBI), in its quarterly policy review, had trimmed its growth forecast to 6.5 per cent from 7 per cent.   

The S&P CNX Nifty is currently trading at 5,325.85, up by 5.45 points or 0.10% after trading in a range of 5,330.05 and 5,313.95. There were 30 stocks advancing against 20 declines on the index.

The top gainers on the Nifty were Maruti up by 2.23%, Reliance Infra up by 1.86%, Bharti Aitrel up by 1.82%, Gail by 1.81% and ONGC up by 1.68%. While, Tata Motors down by 1.85%, ICICI Bank by 0.98%, TCS down by 0.96%, Siemens down by 0.96% and ITC down by 0.84% were the top losers on the index.

Most of the Asian indices were trading in red; Kospi Composite Index down  0.60%, Nikkei 225 down 0.01%, Jakarta Composite down by 0.15%, Taiwan Weighted down by 0.07%, Hang Seng index down by 0.20% and Shanghai Composite down by 0.54% while KLSE Composite up by 0.14% and Straits Times up by 0.22% were the lone gainers.