Benchmarks continue to reel under pressure; BHEL’s FY 13 performance provides some relief

Benchmarks after erasing their morning gains are reeling under pressure on account of sustained selling activity amidst mixed global set-up. On one hand, Asian pacific shares were trading mostly lower, with Chinese shares sliding the most amid rising concerns over the latest outbreak of avian flu on the mainland, while European shares, on the other, made a positive start, recovering some of the previous session's hefty losses, led by banks and miners. Closer home, trading near day’s low, barometer 30 share index, Sensex was down over 25 points and is oscillating near the crucial 18400 level. Similarly, 50 share index Nifty, too sliding close to 15 points, was hovering below the 5550 mark. Broader indices too succumbed to selling pressure and were currently trading mixed.

However, markets are likely to see some recovery on better than expected FY13 performance of Index heavyweight, BHEL. BHEL's provisional net profit for fiscal 2012-13 came in higher than estimates at Rs 6,485 crore, but lower than Rs 7,040 crore reported in 2011-12. Provisional order inflow stood at Rs 31,528 crore, above estimates of Rs 30,000 crore and sharply higher than Rs 22,000 crore reported last fiscal.  Back on street, sectorally Consumer Durables, Health Care and Power counters were aiding the benchmarks in cutting short their losses, while stocks from IT, FMCG and Capital Goods continued to be top laggards. The overall market breadth on BSE is in the favour of advances which were outnumbering declines in the ratio of 961:947, while 101 shares remained unchanged.

The BSE Sensex is currently trading at 18415.35, down by 34.88 points or 0.19% after trading in a range of 18504.48 and 18402.93. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.05% and Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.98%, Health Care up by 0.83%, Power up by 0.60%, Oil & Gas up by 0.54% and PSU up by 0.19% while, IT down by 0.85%, FMCG down by 0.80%, Capital Goods down by 0.51%, Metal down by 0.39% and Auto down by 0.37% were the losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.68%, BHEL up by 1.97%, Cipla up by 1.93%, Dr Reddy’s Lab up by 1.45% and Sun Pharma up by 1.40%.

On the flip side, Wipro down by 2.96%, ITC down by 1.97%, Sterlite Industries down by 1.96%, TCS down by 1.20% and Jindal Steel down by 1.15% were the top losers on the Sensex.

Meanwhile, Chief Economic Advisor Raghuram G Rajan, expressed optimism that Indian economy will grow by over 6% during the current fiscal, however highlighted the deteriorated external environment and its impact on the economy. As per Rajan, Indian economy would clock-in a growth rate of 6.1-6.7% this year.

Summarizing the key global issues, Rajan said the sluggish US macro-economic growth, the tensions in Korean peninsula, Cyprus issues in Europe and concerns about the banking systems in some of the peripheral countries have now become the major concerns for the global economy and these issues will remain in the near-term.

However, Rajan was optimistic towards the domestic economy and said that India is watching the external developments of recent weeks and economy’s growth will pick up by the end of the year.  Regarding inflation, Rajan said, inflation has been contained at very subdue levels month on month, while the big issue is to bring food prices under control. However, indications are good for the Indian harvest which would help control food prices, he added.

On foreign direct investment (FDI), he said that the FDI takes time to come - so changing the caps will be the indications of the broader directions of the reforms that will be going in and we will look at the FDI very carefully.The CNX Nifty is currently trading at 5,540.20, down by 13.05 points or 0.23% after trading in a range of 5,569.20 and 5,537.05. There were 22 stocks advancing against 26 declines on the index, while 2 stocks remained unchanged.

The top gainers of the Nifty were Reliance Infrastructure up by 2.90%, Bharti Airtel up by 2.65% Ambuja Cements up by 1.91%, Cipla up by 1.77% and Sun Pharmaceuticals up by 1.53%.

On the flip side, Ranbaxy down by 2.29%, Cairn India down by 2.20%, Sesa Goa down by 2.07%, ITC down by 1.91% and Punjab National Bank down by 1.65% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 0.66%, Jakarta Composite dropped 0.74%, Straits Times slipped 0.30%, KOSPI Composite declined 0.44% and Taiwan Weighted lost 2.39%.

On the flip side, Hang Seng rose 0.14%, KLSE Composite increased 10.17% and Nikkei 225 surged 2.80%.

European shares opened on a positive note; CAC 40 gained 0.79%, DAX added  0.18% and FTSE100 rose 0.42%.