Weakness persist; Nifty below 5900 level

After four consecutive days of gains, Indian equity markets were trading weak in the late morning session on last trading day of the week. Profit booking dragged Nifty below 5900 level, while Sensex came down by around 90 points on the first day of the new series. Sharp rise in benchmark index in the last two weeks indicates that market has already discounted a rate cut and current levels are widely used to lighten up positions ahead of the RBI policy on May 3. However, losses were restricted on reports that government has pitched for a rating upgrade at a meeting with ratings agency Standard & Poor’s. In currency markets, rupee depreciated marginally against dollar amid increasing demand for greenback from importers. On sectoral front, all sectors were trading in red.

On the global front, most Asian shares were trading mostly higher after upbeat US labor market data, with investors turning their attention toward corporate earnings to assess the outlook for growth after a recent run of soft global data undermined sentiment. Back home, the market breadth was favoring negative trend; there were 855 shares on the gaining side against 1,042 shares on the losing side, while 113 shares remains unchanged.

The BSE Sensex is currently trading at 19318.89, down by 87.96 points or 0.45% after trading in a range of 19384.95 and 19310.07. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.16% and Small cap index was down by 0.04%.

There was no gaining sectoral index on the BSE, while Bankex down by 1.45%, IT down by 1.04%, Health Care down by 0.67%, Power down by 0.56%, and FMCG down by 0.53% were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 5.06%, Bajaj Auto up by 1.60%, GAIL India up by 1.41%, Coal India up by 1.36% and HDFC up by 1.10%.

On the flip side, Mahindra & Mahindra was down by 2.85%, Jindal Steel was down by 2.24%, SBI was down by 1.93%, Hero MotoCorp was down by 1.90% and TCS  was down by 1.86% were the top losers on the Sensex.

Meanwhile, in a bid to prevent any more downgrade from rating agencies which would take India's rating to 'Junk' status, the Government made a strong defense towards upgrading the sovereign rating to the representatives of Standard and Poor's saying that the recent policy reforms would resolve deficit issues and boost investment in the country. In August last year, the rating agency had revised its outlook on India's long-term credit rating to ‘negative' from ‘stable' with a sovereign rating of ‘BBB-’ which is the lowest investment grade.

During the meeting, the finance ministry led by the Economic Affairs Secretary Arvind Mayaram, gave details about various reforms measures initiated and its impact during last few months. On the other hand, S&P agency expressed concern on twin deficits- fiscal and current account, inflation and subsidy bills.  However, Arvind Mayaram emphasized that the Government has taken bold and hard decisions to contain the country’s deficits and working on a strategies to eliminate some of the fuel subsidy.

Moreover, the Government constituted Cabinet Committee on Investment (CCI), which has cleared projects with investment worth $14 billion. The government has also approved Rs 70,000 crore worth of projects. With these initiatives, investment is expected to flow in and which in turn will create demand, he added.

Presently, the Government is meeting rating agencies to improve the country’s outlook because any lowering in rating grade will take it to junk investment grade, making it difficult for the country to attract foreign investments or the companies to borrow from abroad. The meeting with rating agencies started with Fitch earlier this month and now Moody’s is scheduled to meet the Finance Ministry officials during first week of May. The rating agencies will announce their stand on ratings and outlook within a month.   

The CNX Nifty is currently trading at 5,881.40 down by 34.90 points or 0.59% after trading in a range of 5,907.05 and 5,877.85. There were 18 stocks advancing against 31 declines on the index and one remained unchanged.

The top gainers of the Nifty were Bharti Airtel up by 5.46%, Gail up by 1.63%, Bajaj Auto up by 1.54%, Asian Paints up by 1.45% and Coal India up by 1.18%.

On the flip side, HCL Tech down by 3.39%, M&M down by 2.84%, Jindal Steel down by 2.52%, Axis Bank down by 2.22% and IDFC down by 2.17%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng surged by 0.81%, Jakarta Composite increased 0.13%, KLSE Composite rose 0.53, Straits Times added 0.15% and Taiwan Weighted was up by 0.31 points.

On the flip side, Shanghai Composite declined 0.26%, Nikkei 225 declined 0.30% and KOSPI Composite was down by 0.36%.