Indian benchmarks extend southward journey to second straight day

Extending their southward journey for second straight day, Indian equity benchmarks ended the session with a cut of over half a percent with frontline gauges tumbling below their crucial 6,150 (Nifty) and 20,200 (Sensex) levels on the back of feeble global cues. Despite recovering in afternoon deals, benchmark equity indices failed to negotiate a positive close weighed down by the vicious selling pressure in the dying hours of trade. Some pressure also came in after investors offloaded their holding in rate sensitive counters viz. banking and auto after recent gains triggered by rate cut hopes.

Sentiments also got dented after Barclays Capital lowered India’s growth forecast to 6 per cent for 2013-14, from earlier projection of 6.2 per cent, citing recent disappointments in economic activity. The brokerage firm cautioned that there is a possibility of further downside risks to growth, especially in the near term as the Reserve Bank of India’s (RBI) policy interest rate cuts in recent months has not been translated into reduction in bank lending rates.

Selling got intensified in last leg of trade with European counters opening in red as investors await congressional testimony this week from Federal Reserve Chairman Ben S Bernanke and minutes of the central bank’s April meeting. Asian markets ended mostly on a listless note in trades on Tuesday as investors remained jittery about the potential for the tapering of asset purchases ahead of Bernanke's testimony to Congress.

Back home, downward momentum was also supported by massive selling in realty counter as investors continued to book their profit for second consecutive day after recent gains triggered by expectations that the RBI may further cut policy rates to perk up economic growth after the latest data showed a sharp fall in wholesale price inflation in April 2013. Additionally, oil and gas companies which moved higher in early trade mainly reacting to the Oil Ministry’s Cabinet note to raise the price of natural gas produced by state-owned as well as private firms to $6.7, i.e., less than $8-8.5 hike previously expected, edged mostly lower by the end of trade. Bucking the trend, software and technology space garnered a gain of about half a percent on account of weak rupee, since most of software firm derive their income in foreign currency.

The NSE’s 50-share broadly followed index Nifty lost by over forty points to end below its psychological 6,150 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex declined by over one hundred and ten points to finish below its psychological 20,200 mark. Moreover, the broader markets too traded in-line with benchmarks and snapped the session with a cut of over half a percent.

The market breadth remained in favor of declines as there were 940 shares on the gaining side against 1,429 shares on the losing side while 143 shares remain unchanged.

Finally, the BSE Sensex lost 112.37 points or 0.56% to settle at 20,111.61, while the CNX Nifty declined by 42.80 points or 0.70% to end at 6,114.10.

The BSE Sensex touched a high and a low of 20,308.04 and 20,072.68, respectively. The BSE Mid cap index down by 0.62% and Small cap index was down by 0.43%.

The top gainers on the Sensex were, Coal India up 2.11%, BHEL up 1.83%, TCS up 1.03%, Infosys up 0.92% and Sun Pharma up 0.78%, while NTPC down 4.21%, Tata Motors down 3.06%, Maruti Suzuki down 2.49%, SBI down 2.16% and Tata Steel down 2.11% were the top losers on the index. 

The top gainers on the BSE Sectoral space were IT up 0.80%, TECk up 0.44% and Consumer Durables up 0.01%, while Realty down 2.59%, Auto down 1.75%, Power down 1.06%, PSU down 1.00% and Bankex down 0.88% were the top losers on the sectoral space.

Meanwhile, in order to kick-start much-delayed plan of building a series of national expressways, the government is planning to introduce alternate financial models involving low-cost foreign loans and leveraging adjoining land. However, the government has scraped the earlier deadline of 2015 for rolling out 1,000 km national expressway.

The road ministry plans to start with the Delhi-Jaipur expressway and is expected to cost over Rs 16,000 crore. The Cabinet had cleared Rs 16,680 crore for the entire 1,000 km in 2006. Though, the government's plan of building expressways continue to be stuck because of red tape and funds crunch, which has also escalated the project costs by several times.

Normally, expressways cost between five to eight times more than highways, which cost about 10 crore per km. In India, 93-km Ahmedabad-Vadodara is the only national expressway. Earlier the government was hoping for Rs 9,000 crore investments from private sector, but given the prevailing economic slowdown, it is not sure funds will come in.

Therefore, the road ministry is planning to build the expressways through the Engineering Procurement & Construction (EPC) route by using cheap foreign loans. The ministry is also working on a proposal to charge toll rates that are 1.25 times more than that on highways.

The CNX Nifty touched a high and a low of 6,180.25 and 6,102.35 respectively. 

The top gainers on the Nifty were Coal India up 2.36%, BHEL up 1.61%, TCS up 1.40%, HCL Tech up 1.34% and Infosys up 1.06%.

On the other hand, top losers on Nifty were, UltraTech Cement down 4.87%, NTPC down 4.42%, JP Associates down 3.94%, Grasim down 3.17% and DLF down by 3.04%.

The European markets were trading mixed, France’s CAC 40 down by 0.33%, the United Kingdom’s FTSE 100 up by 0.19% and Germany’s DAX down by 0.16%.

Asian stock markets ended mixed on Tuesday, as investor remained cautious ahead of Fed chairman Ben Bernanke's Congressional testimony to Congress and the release of the Fed's May minutes due this Wednesday for cues on the outlook for interest rates. Japan's Nikkei went home with green mark, buoyed by the dollar's rebound against the yen ahead of a Bank of Japan meeting. China's Shanghai Composite closed higher, with property developers leading the gainers amid expectations that a high-level meeting in Beijing to support the urbanization process in the coming weeks will support housing prices. Hong Kong's Hang Seng market closed shutter in negative territory on profit taking after previous day’s rally, while Seoul shares ended almost flat amid lack of fresh triggers.