Markets extend early losses amid choppy trade

Indian equity markets extended early losses in the late morning session on Wednesday amid selling across some sectors. Investors remained cautious amid a lack of domestic triggers, while at some counters, movements are a bit choppy due to the ensuing expiry of near month derivatives contracts. In currency market, rupee depreciated to nine-month low against greenback amid increasing month-end demand for the US currency from importers and banks. On the sectoral front, healthcare stocks were trading firm and mirroring their surge, the BSE Healthcare index has gained more than 1.9%. FMCG, automobile and consumer durables stocks were off their earlier highs. Capital goods, bank, power and realty stocks were trading weak.

On the global front, most Asian shares eased as strong economic data rallied US stocks to record highs, throwing market focus back on to the possibility of reduced Federal Reserve monetary stimulus in the future. Back home, the market breadth was favoring negative trend; there were 887 shares on the gaining side against 1,076 shares on the losing side, while 129 shares remain unchanged.

The BSE Sensex is currently trading at 20,101.56, down by 59.26 points or 0.29% after trading in a range of 20,216.49 and 20,062.89. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.17% and Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were, Health Care up by 1.97%, FMCG up by 0.44%, Auto up by 0.07% and Consumer Durables up by 0.01% while, Realty down by 1.36%, Capital Goods down by 1.08%, Bankex down by 1.05%, Power down by 1.04% and Metal down by 0.68% were the top losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 7.78%, Tata Motors up by 1.23%, Hero MotoCorp up by 0.70%, Coal India up by 0.59% and ITC up by 0.47%. On the flip side, BHEL was down by 2.14%, HDFC was down by 1.63%, Sterlite Industries was down by 1.37%, Jindal Steel was down by 1.22% and L&T was down by 1.14% were the top losers on the Sensex.

Meanwhile, ruling out ban on sale of gold coins by banks, the Reserve Bank of India (RBI) governor Duvvuri Subbarao said, the central bank does not intend to ban banks from selling gold coins, but asked the lenders to refrain from aggressively selling the precious metal, though it is sticking to its stance of discouraging speculative investments in gold.

By adding further, the governor said, the attractiveness of gold is a consequence of high inflation and the route of buying gold for the purpose of genuinely saving should be available to the people. He also emphasized that investment in the financial sector is good for the economy. Recently, the central bank imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold Exchange Traded Funds (ETFs) and Mutual Funds (MFs).

India is the largest consumer of gold and the record buying of gold is seen as a key reason for higher current account deficit (CAD), which stood at a record high of 6.7% in third quarter of FY 13. In April, gold import jumped by 138% to $7.5 billion the highest so far this year. Further, to curb the gold import, the government has also taken several steps recently, including raising import duty.

The CNX Nifty is currently trading 6,087.70 down by 23.55 points or 0.39% after trading in a range of 6,125.05 and 6,077.35. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 7.87%, Lupin up by 2.21%, Tata Motors up by 1.40%, Hero MotoCorp up by 0.77% and PowerGrid up by 0.76%. On the flip side, JP Associate down by 3.28%, BHEL down by 2.38%, IDFC down by 2.28%, Grasim down by 2.02% and Ranbaxy down by 1.77% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.15%, KLSE Composite strengthened 0.47%, Nikkei 225 surged 0.10%, KOSPI Composite jumped 0.75%, Jakarta Composite up 0.16% and Taiwan Weighted was up by 0.91%.

On the flip side, Hang Seng declined 0.97% and Straits Times was down by 0.41%.