Benchmarks extend losses on weak global cues

The Indian benchmarks were trading in range with a negative bias after opening on a subdued note in the late morning session as global worries about a possible withdrawal of quantitative easing in the U.S. weighed heavy on risk assets. Sentiments have remained bearish on sustained selling by funds and retail investors driven by a weak trend in the Asian region. The markets may remain volatile today, on account of expiry day of future contracts on the last Thursday of the month, as traders roll over positions in the futures & options (F&O) segment from the near-month May 2013 series to June 2013 series. On the global front, most of the Asian equity indices were trading in red with Japanese Nikkei tumbling over three percent to breach 14,000 level, dragged lower by the dollar’s decline to its lowest since May 10 against the yen which weighed on exporters.

Back home, the traders were seen piling up positions in Auto, FMCG and Capital Goods while selling was seen in Realty, Consumer Durables and Oil & Gas sector. In scrip specific actions, IPCA, Mahindra & Mahindra traded, Aurobindo Pharma higher ahead of its quarterly results. Apollo Tyres rose after the company sold part of its South African operations to Japanese trading firm Sumitomo Rubber Industries (SRI) for $60 million (Rs 333 crore) including the Ladysmith passenger car tyre plant. BEML gained after the company posted a Rs 85.35-crore profit for the fourth quarter of financial year 2012-13, against a loss of Rs 13.99 crore in the same period the previous fiscal (2011-12). TCS soared after the IT major said it has bagged a six-year contract from the Department of Posts (DoP) worth over Rs 1,100 crore. MCX surged after the leading commodity bourse posted 16% rise in net profit at Rs 76.62 crore for the quarter ended March 31, this year. Housing Development & Infrastructure Ltd (HDIL), tanked after the company received a termination notice from Mumbai International Airport Limited (MIAL) for its slum rehabilitation project. ONGC dropped after the upstream oil company reported a 40 per cent decline in net profit to Rs 3388.7 crore for the quarter ended March 2013 as compared to a net profit of Rs 5,644 crore in the corresponding quarter last fiscal. Cipla slipped after the drug major reported 8.28 per cent decline in its net profit at Rs 267.56 crore for the fourth quarter ended March 31, 2013 mainly due to higher tax expenses. DLF traded lower ahead of its quarterly results.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,000 and 20,000 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 691: 951.

The BSE Sensex is currently trading at 20130.58, down by 17.06 points or 0.08% after trading in a range of 20156.02 and 20066.14. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.17% and Small cap index was down by 0.19%. The top gaining sectoral indices on the BSE were, Auto up by 1.13%, FMCG up by 0.56%, Capital Goods up by 0.18% and Health Care up by 0.06% while, Realty down by 2.04%, Consumer Durables down by 1.33%, Oil & Gas down by 0.89%, TECK down by 0.51% and Bankex down by 0.43%were the losers on the BSE.

The top gainers on the Sensex were Tata Motors up by 2.93%, Mahindra & Mahindra up by 1.98%, ITC up by 1.04%, Sun Pharma up by 1.02% and HDFC up by 0.85%. On the flip side, Cipla was down by 2.30%,  ICICI Bank was down by 2.02%, ONGC was down by 1.81%, Bharti Airtel was down by 1.61% and Hero MotoCorp was down by 1.09% were the top losers on the Sensex.

Meanwhile, India’s engineering exports has declined by 10 per cent to $4.5 billion in April from $5 billion recorded in the same month of previous fiscal year, owing to sluggish demand in western markets. In FY13, the engineering exports also declined by 3 per cent to $56.7 billion.

Engineering goods exports which include exports of goods, transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners, constitutes around one-fourth of the country's total merchandise shipments. The US and Europe together account for 60 per cent of the country’s total engineering exports.

Indian exporters are getting less number of orders as the demand is still weak in the US and European markets. The global economic crisis, sovereign debt crisis in Europe and the economic slowdown in developed economies are the major reasons contracting the engineering goods exports.  Although, the domestic exporters have found new markets in Africa and Latin America, but they are cautious due to reasons such as fear of payment default.

Concerned over the declining export, the export council feels that the government needs to take urgent steps to boost exports from the sector in the coming years. In the annual foreign trade policy, the government had announced a slew of measures to boost the country’s export. These measures include sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

The CNX Nifty is currently trading at 6,094.50 down by 9.80 points or 0.16% after trading in a range of 6,103.40 and 6,072.15. There were 20 stocks advancing against 29 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.03%, M&M up by 1.88%, NMDC up by 1.80%, PNB up by 1.23% and Sun Pharmaceuticals up by 0.99%. On the flip side, JP Associate down by 2.75%, Cipla down by 2.35%, ICICI Bank down by 2.03%, ONGC down by 2.03% and Bharti Airtel down by 1.81% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 7.35 points or 0.32% to 2,316.67, Hang Seng declined 177.38 points or 0.79% to 22,377.55, Jakarta Composite tumbled 55.10 points or 1.06% to 5,145.60, KLSE Composite contracted 7.45 points or 0.42% to 1,776.02, Nikkei 225 crumbled 572.05 points or 3.99% to 13,739.99, Straits Times dropped 47.67 points or 1.40% to 3,320.39 and Taiwan Weighted was down by 100.29 points or 1.20% to 8,240.77.

On the flip side, KOSPI Composite was up by 1.12 points or 0.06% to 2,002.32 .