Benchmarks prune losses; negative trend prevails

Benchmark equity indices managed to prune some of their losses, witnessed on account of continued domestic political uncertainty and worries about early elections after the withdrawal of a key regional ally from the ruling coalition last month. Nevertheless, an uptick of European future indices combined with the optimistic statement by Vice president of the Congress party Rahul Gandhi, buttressed the sentiment at D-Street to some extent.

Meanwhile, European stock futures advanced as the Bank of Japan doubled its bond-buying program in an attempt to stimulate the economy. Closer home, Sensex and Nifty were trading above 18650 and 5700 psychological levels respectively. Broader indices however extended their decline. Sectorally, Auto and Health Care counters showed resilience. Beaten down Auto stocks gained steam on bargain buying while, Health Care counter witnessed some traction on defensive buying. However, amongst the worst performing indices included, Information Technology, Realty and Bankex counters. Meanwhile, Sugar stocks continue to witness demand on hopes the government will remove a requirement that they sell a portion of their output to the government at reduced prices, while also easing some of the restrictions on the sector. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1507:772, while 110 shares remained unchanged.

The BSE Sensex is currently trading at 18673.54, down by 128.10 points or 0.68% after trading in a range of 18733.62 and 18612.32. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap index were down by 0.97% and 1.16% respectively.

The top gaining sectoral indices on the BSE were Auto up by 0.40% and Health Care up by 0.24%, while IT down by 1.89%, Realty down by 1.78%, TECK down by 1.54%, Bankex down by 1.23% and Consumer Durable down by 1.09% were the top losers on the BSE.

The top gainers on the Sensex were Coal India up by 3.42, Dr Reddys Lab up by 2.87%, Tata Motors up by 1.67%, Hindustan Unilever up by 1.32% and Mahindra & Mahindra up by 1.32%.

On the flip side, Tata Steel was down by 2.21%, Infosys down by 2.19%, Sterlite Industries down by 2.04%, TCS down by 2.03% and BHEL down by 1.67%, were the top losers on the Sensex.

Meanwhile, citing Micro, Small and Medium Enterprises (MSMEs) vital for driving the country’s economic growth further, President Pranab Mukherjee said, MSMEs need to get more institutional credit and we must direct our efforts at increasing the competitiveness of this sector by enhancing the availability of institutional credit. These enterprises contribute around 8% of the country's GDP, 45% of the manufactured output and 40% of the total country’s exports.

As per Mukherjee these enterprises are perhaps the most crucial link between India's economic growth and socio-economic transformation. The growth potential of the MSME units should not be impeded by lack of access to financial resources.

He also expressed the need to increase the reach and coverage of financial institutions by expanding branch network to locations near industrial clusters. Moreover, with the adequate financial support, MSME sector would investment more for innovation and technology, skill development and for adequate industrial infrastructure development.

Regarding the technology development in the MSME sector, Mukherjee said India's future economic progress would be determined largely by the level of technology and innovation that the industry is using. Innovation and technology provided the competitive edge that the industrial sector at large and the MSME sector in particular should not be deprived of. 

The CNX Nifty is currently trading at 5,625.80, down by 47.10 points or 0.83% after trading in a range of 5,643.45 and 5,606.80. There were 14 stocks advancing against 36 declines and one remained unchanged on the index.

The top gainers of the Nifty were Coal India up by 3.80%, Dr. Reddy's Laboratories up by 2.69%, Tata Motors up by 1.87%, Cairn Indian up by 1.36% and Maruti Suzuki up by 1.34%.

On the flip side, JP Associate down by 3.81%, HCL Tech down by 3.41%, UltraTech Cement down by 3.24%, Grasim Industries down by 2.59% and Infosys down by 2.52% were the major losers on the index.

Markets in mainland China, Hong Kong and Taiwan remained shut for the trade. While, those trading in red; Jakarta Composite declined 0.57%, Straits Times dipped 0.26%, KLSE Composite tumbled 0.21 points or 0.01% to 1,685.58 and KOSPI Composite was down by 25.92 points or 1.31% to 1,957.30.

On the flip side, Nikkei 225 was up 0.20% and KLSE Composite were trading flat with positive bias.

Meanwhile, European markets got off to mixed start; with CAC 40 trading with gains of 0.19% and DAX adding 0.18%, however, FTSE 100 was trading with loss of over 0.15%.