Sensex, Nifty continue to trade in red; CPI-inflation eases to 9.39% in April

The Indian benchmarks witnessed cautious trading as markets remained pressurized while they extended initial losses in the late morning session on the back of weak global cues. On the global front, most of the Asian equity indices were trading in red at this point of time with sentiment hit by selling in commodities triggered by a strong dollar, which rose to a fresh four-and-a-half-year peak against the yen on the back of growing confidence in the US economy.

Back home, Declining for second straight month, annual rate of inflation, based on the consumer prices index (CPI), eased in the month of April at 9.39%. The General Indices for rural, urban and combined are 128.7, 127.4 and 128.1 respectively.  According to the data released, provisional annual inflation rate based on all India general CPI (Combined) for April 2013 on point to point basis stood at 9.39% as compared to 10.39% final inflation number for the previous month of March 2013. The corresponding provisional inflation rates for rural and urban areas for March 2013 are 9.16% and 9.73% respectively.

The traders were seen piling up positions in Health Care and Consumer Durables while selling was seen in FMCG, IT and Teck sector. In scrip specific actions, Dr.Reddy's Laboratories soared on expectations it would beat March-quarter estimates. Dr Reddy's will post its March quarter results on Tuesday. Unichem Laboratories surged after the drug firm reported a 33.57 per cent rise in net profit at Rs 31.03 crore for the fourth quarter ended March 31, 2013 on the back of robust sales. DLF slipped after the company announced issue of 8.18 crore shares sale tomorrow. The price band for share issue was fixed at Rs 222-233 per share. The floor price of Rs 222, is at discount to the current price. Bank of India was trading weak ahead of its results. Dena Bank dropped after the public sector lender reported a massive 50.7 per cent decline in net profit to Rs 125.7 crore in the fourth quarter of last fiscal in the wake of higher provisions.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,000 and 19,900 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 761: 932.

The BSE Sensex is currently trading at 19980.30, down by 142.02 points or 0.71% after trading in a range of 20109.08 and 19962.61. There were 9 stocks advancing against 21 declines on the index.The broader indices were trading in red; the BSE Mid cap index was down by 0.25% and Small cap index was down by 0.13%.

The only gaining sectoral indices on the BSE were, Health Care up by 0.53% and Consumer Durables up by 0.47% while, FMCG down by 1.72%, IT down by 1.35%, Teck down by 1.14% ,Capital Goods down by 1.01%, and Auto down by 0.49% were the top losers on the BSE.

The top gainers on the Sensex were Dr Reddys Lab up by 2.70%, Cipla up by 0.40%, NTPC up by 0.29%, HDFC Bank up by 0.25%, and ICICI Bank up by 0.21%. On the flip side, ITC was down by 3.02%, TCS was down by 1.99%, BHEL was down by 1.69%, Infosys  was down by 1.24% and L&T was down by 1.09% were the top losers on the Sensex.

Meanwhile, as per the Ernst & Young (E&Y) survey, majority of senior corporate executives (around 67 percent) are convinced that the current regulatory environment is supportive of business growth in the country. Further, the survey, which covered over 70 respondents from India, also found that around 86 percent of the executives consider domestic economy to be stable or improving while investing capital is the priority for about 40 percent of the respondents.

The report said that the greatest confidence booster was allowing Foreign Direct Investment (FDI) in retail chains and air carriers. The government allowed 51 percent FDI in multi-brand retail and 49 percent in civil aviation. Besides this, the setting up of Cabinet Committee on Investment (CCI) to fast track big-ticket infrastructure projects and partial de-regulation of diesel prices, have also boosted the overall confidence, it said.

The survey noted that India is witnessing a high level of confidence in its economic growth and more than 50 percent of the Indian respondents (as compared to 27 percent six months ago) were of the opinion that the domestic economy is recovering. Positively, the percentage of respondents with negative views about the Indian economy recorded a considerable decline to 14 percent, as compared to 46 percent in October 2012.

Further, the report added that compared to their global counterparts, Indian respondents are more focused on cost reduction and improvement of operational efficiency.  Organic growth remains a focus area for about 48 percent of the executives and the continued focus on organic growth indicates that confidence in the economy's long-term growth remains intact, it added.

Referring to the global economy, the E&Y survey said that about 42 percent of the Indian respondents believe the global economy is improving whereas the same sentiment was expressed by just 21 percent participants when the survey was conducted in October 2012.

The CNX Nifty is currently trading at 6,065.40 down by 41.85 points or 0.69% after trading in a range of 6,104.95 and 6,064.25. There were 10 stocks advancing against 39 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Dr. Reddy's Laboratories up by 2.55%, Asian Paints up by 0.99%, Axis Bank up by 0.73%, Jindal Steel up by 0.53% and CIPLA up by 0.36%. On the flip side, ITC down by 2.54%, TCS down by 2.19%, BHEL down by 1.86%, DLF down by 1.48%, and ACC down by 1.43%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 4.76 points or 0.21% to 2,242.07, Hang Seng tumbled 248.88 points or 1.07% to 23,072.34, Jakarta Composite dropped 43.11 points or 0.84% to 5,062.83, Straits Times slipped 3.82 points or 0.11% to 3,439.95, and Taiwan Weighted was down by 41.46 points or 0.50% to 8,238.80.

On the flip side, KLSE Composite rose 13.65 points or 0.77% to 1,786.03, Nikkei 225 was up by 136.86 points or 0.94% to 14,744.40 and KOSPI Composite surged by 0.82 points or 0.04% to 1,945.57.