Benchmarks extend southward journey for fifth straight day

Extending their losing streak for yet another day, stock markets in India staged a dismal performance on Tuesday with both the frontline indices snapping the session below their crucial 5,500 (Nifty) and 18,250 (Sensex) levels as investors turned cautious ahead of fourth quarter results. Earlier markets made a positive start and traded firmly in first half as sentiments got some support with the Asian Development Bank’s (ADB) outlook as the agency in an improvement over disappointing numbers last year, said that domestic consumption could boost India’s slowing economy to 6 percent growth this year. But, the domestic gauges pared most of their profit and turned red in noon trade as investors booked their initial profits ahead of Industrial production numbers which is due later this week. India’s industrial production is expected to shrink in February due to a contraction in infrastructure industry output and flagging demand, after a surprisingly strong rise in January. The factory production is expected to decline by 0.7 percent in February y-o-y, following a 2.4 percent surge in January.

Selling got intensified in the late trade after a meeting of all political parties to arrive at a consensus over a proposed land acquisition law remained inconclusive. The leaders will meet again on April 18 to discuss the draft law. Meanwhile, reports of foreign funds emerging as net sellers in Indian equities for fourth consecutive session, with net selling of $30.03 million of equities on April 08, also dampened the sentiment at D-street.

However, market-men shrugged off firm global cues as European counters traded firm in early session, lifted by miners, as investors hoped for more accommodative monetary policy from China after it reported benign inflation data and as US firm Alcoa reported solid earnings. Asian indices too shut shop mostly in green as inflation in the world’s second-largest economy eased more than forecast from a 10-month high.

Back home, selling in software and technology stocks too dampened the sentiments. IT stocks edged lower as weak US non-farm payrolls raised questions about the health of the US economy, the sector’s biggest revenue generator. Wipro slumped over 12% on the first trading session of demerger of non-IT business while, Infosys stock declined by over two percent, on concerns ahead of Q4 earnings. Selling in Capital goods pack too extended the downfall as stocks like BEML, Siemens, BHEL, Bharat Electronics and L&T edged lower on worries that ongoing slowdown in the economy could restrict new orders.

The NSE’s 50-share broadly followed index Nifty declined by about 50 points to end below the psychological 5,500 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dipped by over two hundred and ten points to end below its crucial 18,250 mark. Moreover, broader markets too butchered badly during the trade and ended the session with a cut of about a percent. 

The overall volumes stood above Rs 1.80 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favor of declines as there were 561 shares on the gaining side against 1,133 shares on the losing side while 767 shares remain unchanged.

Finally, the BSE Sensex shaved off 211.30 points or 1.15% to settle at 18,226.48, while the CNX Nifty plunged by 47.85 points or 0.86% to end at 5,495.10.

The BSE Sensex touched a high and a low of 18,565.56 and 18,206.61, respectively. The BSE Mid cap index down by 1.00% and Small cap index was down by 0.84%.

The top gainers on the Sensex were, Tata Motors up by 2.26%, TCS up by 1.10%, Jindal Steel up by 0.73%, NTPC up by 0.25% and ICICI Bank up by 0.12%, while Wipro down by 12.19%, ONGC down by 2.91%, Infosys down by 2.36%, SBI down 2.30% and GAIL down by 2.22% were the top losers on the index.

The only gainer on the BSE Sectoral space was Auto up 0.41%, while IT down by 2.10%, TECk down 1.88%, Oil & Gas down 1.65%, PSU down 1.57% and FMCG down 1.44% were the top losers on the sectoral space.

Meanwhile, stronger external demand and progress on reforms could boost India's slowing economy to 6% growth this year. As per the multilateral funding agency ADB, reforms are required to facilitate more favorable investment environment and spur growth. However, cautioned that the country may fail to reach that level, if the government fails to pursue structural reforms further.

The agency in its report 'Asian Development Outlook 2013' has predicted growth in India to recover to 6% this year and 6.5% in 2014 from around 5% in 2012. As per the report, the growth forecast is an improvement over disappointing numbers last year but still far short of the capability of Asia's third-largest economy, which was seen few years back as a rising economic power that could even rival China, with the growth of over 9%.  

Highlighting inflation, as a key concern that is hampering India's scope to show high growth, ADB’s report said that the slowing growth has been paired with persistently high inflation. High prices, especially for food, limit the central bank's scope to reduce interest rates, although the Reserve Bank of India last month made its second cut this year to a key lending rate.  

Regarding the Asia’s emerging economies, it said that the growth in the developing Asia is expected to gain growth momentum this year, powered by rising domestic consumption and intra-regional trade, but authorities need to defend against the risks of inflation and asset bubbles arising from strong capital inflows.

The CNX Nifty touched a high and a low of 5,603.05 and 5,487.00 respectively. 

The top gainers on the Nifty were Cairn up by 2.07%, Tata Motors up 2.06%, TCS up 1.30%, Ambuja Cement up 0.89% and NTPC up by 0.60%.

On the flip side, the top losers of the index were, Reliance Infra down by 3.54%, ONGC down by 3.50%, GAIL down by 2.61%, SBI down by 2.59% and PNB down by 2.50%.

Most of the European markets were trading in green, France’s CAC 40 up by 0.50%, the United Kingdom’s FTSE 100 up by 0.36% and Germany’s DAX up by 0.14%.

Asian markets ended mostly higher on Tuesday, encouraged by positive inflation data from China and a firm start to the US earnings season. Shanghai Composite ended higher, the first advance in five days, as inflation in the world’s second-largest economy eased more than forecast from a 10-month high. However, Japan’s Nikkei went home with red mark after several sessions of gains, on profit-taking as the yen edged up slightly after hitting multi-year lows. Meanwhile, South Korea’s Kospi closed higher but gains were limited by companies that do business in North Korea after the communist nation said it will suspend operations at a jointly run industrial complex.