Indian markets trade slightly in red on Tuesday

Indian equity benchmarks have made a quiet start and are trading slightly in red on Tuesday’s morning session as funds and retail investors opted to book profit amid a weak trend in global markets. Overnight, the US markets closed lower giving back some last week gains as sentiments remained subdued on disappointing manufacturing data which overshadowed a separate report from the Commerce Department, showing a notable rebound in construction spending. However, Asian markets were trading mostly in green helping the domestic markets to cap their losses.

Back home, the southward journey of the key indices were mainly surfaced due to selling in Auto counter on report that passenger car sales for March fell over 20% led by an across-the board sharp decline posted by leading car makers. However, losses remain limited on Finance Minister P Chidambaram’s statement that the Indian economy is capable of absorbing $50 billion foreign direct investment (FDI) annually. Sentiments also got some support after shares of sugar manufacturer edged higher in morning trades on hopes that the government may soon remove some curbs on the tightly control sector.

On the sectoral front, capital goods witnessed the maximum gain in trade followed by oil and gas and metal while, auto, realty and banking remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,116 shares on the gaining side against 642 shares on the losing side while 95 shares remain unchanged.

The BSE Sensex opened at 18,863.82; about 1 points lower compared to its previous closing of 18,864.75, and has touched a high and a low of 18,885.87 and 18,826.53 respectively.

The index is currently trading at 18,834.48, down by 30.27 points or 0.16%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 60.55% stocks advancing against 34.51% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices up by 0.24% and 0.65% respectively. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.73%, Oil & Gas up by 0.63%, Metal up by 0.55%, Health Care up by 0.51% and PSU up by 0.40% while, Auto down by 1.03%, Realty down by 0.98%, Bankex down by 0.48%, FMCG down by 0.24% and Teck down by 0.22% were the top losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 1.17%, Wipro up by 1.15%, L&T up by 1.00%, ONGC up by 0.99% and Jindal Steel up by 0.96%.

On the flip side, Bajaj Auto was down by 1.90%, Maruti Suzuki was down by 1.51%, Tata Motors was down by 1.47%, ICICI Bank was down by 0.88% and HDFC was down by 0.85% were the top losers on the Sensex.

Meanwhile, expanding at its slowest pace since November 2011, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to 52 in March against its previous reading of 54.2 in February, thereby underscoring shrinking domestic and foreign demand.

Deceleration in new orders and power outages mainly slowed the growth momentum in the manufacturing sector, with the March headline reading showing the biggest month-on-month drop since September 2011. Despite that, Indian goods-producing sector has shown output growth advancement for the forty-eight consecutive month. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years.

Further, although March data signaled higher volumes of incoming new work in the Indian goods-producing sector, the growth in total new orders was the slowest in 16 months. The new orders sub-index in the survey, a reliable gauge of future output, slipped from 56.3 in February to 52.8, the weakest pace of growth since November 2011, with overall output growing at its weakest pace in more than a year. Export orders too rose slightly, however, the rate of expansion eased.

Meanwhile, input prices increased in March, but the rate of cost inflation eased to the slowest in 32 months. Input prices in the Indian manufacturing sector rose for the forty-eight consecutive month, suggesting the increased prices of raw materials and unfavorable exchange rates.

However, even as the survey suggests inflation rate easing over coming months, it also hints at the limited room for rates cut that Reserve Bank of India (RBI) has given the sharp uptick in headline inflation numbers and record-high current account deficit that country is dealing with. The RBI in its mid-quarter monetary policy review on March 18 reduced the repo rate by 25 basis points from 7.75 to 7.50 per cent. Further, India's current account deficit hit a record 6.7 per cent of GDP in December quarter to $32 billion.

The CNX Nifty opened at 5,701.70; about 2 points lower as compared to its previous closing of 5,704.40, and has touched a high and a low of 5,676.80 and 5,652.85 respectively.

The index is currently trading at 5,691.10, down by 13.30 points or 0.23%. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Cairn up by 1.63%, Ambuja Cements up by 1.38%, Lupin up by 1.30%, Sun Pharmaceuticals up by 1.22% and Sesa Goa up by 0.99%.

On the flip side, Bajaj-Auto down by 1.87%, Maruti down by 1.70%, Tata Motors down by 1.53%, DLF down by 1.52% and HDFC down by 1.07%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 3.40 points or 0.02% to 22,303.03, Jakarta Composite jumped 13.11 points or 0.27% to 4,950.69, KLSE Composite increased 6.01 points or 0.36% to 1,673.62, Straits Times added 2.43 points or 0.07% to 3,310.01 and Taiwan Weighted was up by 15.85 points or 0.20% to 7,915.09.

On the flip side, Shanghai Composite decreased 8.50 points or 0.38% to 2,225.89, Nikkei 225 dropped 144.07 points or 1.19% to 11,990.95 and KOSPI Composite was down by 1.84 points or 0.09% to 1,994.15.