Domestic benchmarks drift lower in early trade tailing weak Asian markets

Indian equity indices have made a soft start on Tuesday following weakness in other Asian counterparts as all the Asian equity indices were trading in red at this point of time with the latest figures from China adding to the growing concerns about the world’s number two economy. The flash HSBC Purchasing Managers’ Index for April fell to 50.5 in April from 51.6 in March but was still stronger than February’s reading of 50.4. Though, the US markets closed higher overnight supported by the latest batch of earnings news from some big companies, while the technology and resource stocks firmed up after witnessing steep losses last week.

Back home, trade remained choppy after the Cabinet Committee on Economic Affairs has dropped the proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants. The report that foreign direct investment (FDI) in the country declined by 19% at $1.79 billion in February, too was dampening the sentiments. However, the losses remained capped as some support came in from the power and oil & gas sector after the Cabinet Committee on Investment (CCI) cleared 25 exploration and production blocks out of the 31 blocks where work had been stalled on account of security restrictions. The panel also approved 13 power projects entailing investments worth Rs 33,000 crore that were stuck due to various reasons.

On the sectoral front, metal witnessed the maximum gain in trade followed by software and technology while, banking, capital goods and consumer durables remained the top losers on the BSE sectoral space. However, the broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 754 shares on the gaining side against 505 shares on the losing side while 68 shares remain unchanged.

The BSE Sensex opened at 19,210.26; about 40 points higher compared to its previous closing of 19,169.83, and has touched a high and a low of 19,210.26 and 19,100.63 respectively.

The index is currently trading at 19,134.90, down by 34.93 points or 0.18%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 56.71% stocks advancing against 38.36% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.15% and 0.17% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 1.28%, IT up by 0.81%, Teck up by 0.57%, Health Care up by 0.33% and Power up by 0.23% while, Bankex down by 0.99%, Capital Goods down by 0.97%, Consumer Durables down by 0.51%, FMCG down by 0.32% and Auto down by 0.29% were the top losers on the sectoral index.

The top gainers on the Sensex were Hindalco Industries up by 2.15%, Bajaj Auto up by 1.84%, Sterlite Industries up by 1.75%, Hero MotoCorp up by 1.66% and Tata Steel up by 1.35%.

On the flip side, L&T was down by 1.83%, Tata Motors was down by 1.75%, SBI was down by 1.34%, HDFC Bank was down by 0.95% and ICICI Bank was down by 0.87% were the top losers on the Sensex.

Meanwhile, the International Monetary Fund (IMF), an international organization of 188 countries working to foster global monetary cooperation and financial stability, in its latest edition of annual Fiscal Monitor report has said that India would achieve its potential growth rate on the back of recent measures taken by the government like liberalising foreign direct investment, putting pending projects on fast track and fiscal consolidation. It has said that at a time when many countries are facing challenges on the fiscal consolidation front, India with its favorable interest rate growth differential has an advantage in addressing deficit concerns in 2013.

According to the report, the overall debt situation in most emerging market economies and low-income countries remains more favorable than in advanced economies, owing in part to relatively low levels of debt and deficits combined with low interest rates and growing economies.

Anoop Singh Director of the Asia and Pacific Department, IMF has said that potential growth in India could certainly go from current level as the government is acting on a number of areas, he further stated that IMF believes that India has the potential of a higher growth rate than it is now.

IMF report attributed much of the improved picture globally to concerted efforts by governments to bring spending under control following the peak of the crisis in 2009  and has highlighted that in India, subsidy reduction measures, other spending cuts and tax administrative measures recommended by the government-appointed Kelkar Commission will contribute to a reduction in the projected 2013 deficit of about 0.75 per cent of GDP relative to previous forecasts.

The CNX Nifty opened at 5,843.10; about 8 points higher as compared to its previous closing of 5,834.40, and has touched a high and a low of 5,843.35 and 5,808.90 respectively.

The index is currently trading at 5,818.10, up by 16.30 points or 0.28%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were JP Associate up by 2.34%, Hindalco up by 1.99%, Bajaj-Auto up by 1.95%, Sesa Goa up by 1.91% and HCL Tech up by 1.50%.

On the flip side, IndusInd Bank down by 2.81%, L&T down by 1.81%, Tata Motors down by 1.72%, Cairn down by 1.55% and SBI down by 1.53%, were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite tumbled 48.05 points or 2.14% to 2,194.12, Hang Seng declined 270.65 points or 1.23% to 21,773.72, Jakarta Composite slipped 15.83 points or 0.32% to 4,981.09, KLSE Composite contracted 6.03 points or 0.35% to 1,700.65, Nikkei 225 dipped 32.90 points or 0.24% to 13,535.47, Straits Times decreased 15.72 points or 0.48% to 3,293.20, KOSPI Composite dropped 16.98 points or 0.88% to 1,909.33 and Taiwan Weighted was down by 45.73 points or 0.57% to 7,924.65.