Benchmarks trade in red ahead of Q4 GDP data

Key domestic benchmarks have made a dismal start to the June F&O series with both the frontline indices tumbling below their crucial 20,000 (Sensex) and 6,100 (Nifty) levels ahead of the January-March economic growth data (GDP data) due later in the day today. The economy grew 4.5 percent in the December quarter, but there is expectation that the economy will perform a little better and expand by 4.8 percent in the quarter ended March, though a weaker than expected numbers can act negatively for the markets. Sentiments also remain dampened after Reserve Bank of India’s Governor D Subbarao warned of upside risks to inflation and expressed worry over the country’s high current account deficit, denting hopes for rate cuts and sending bond yields to a two-week high and the rupee to a 10-month low.

However, global cues remained supportive as the US markets bounced back and ended modestly higher overnight on the back of some weaker than expected economic data that eased concerns about Federal Reserve’s tapering down of the stimulus program. While, most of the Asian equity indices were trading in green at this point of time with Japanese Nikkei surging about a percent after nation’s industrial output expanded faster than estimated last month.

Back home, on the sectoral front, software remained the lone gainer while, fast moving consumer goods, banking and oil and gas remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, the market breadth on the BSE was negative; there were 505 shares on the gaining side against 780 shares on the losing side while 64 shares remain unchanged.

The BSE Sensex opened at 20,186.67; about 28 points lower compared to its previous closing of 20,215.40, and has touched a high and a low of 20,191.29 and 19,917.57 respectively.

The index is currently trading at 19,983.12, down by 232.28 points or 1.15%. There were 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a weak start with 37.44% stocks advancing against 57.82% declines. The broader indices were trading in red; the BSE Mid cap down by 0.21% and Small cap indices trading down by 0.24%.

The only gaining sectoral indices on the BSE was, IT up by 0.16% while, FMCG down by 1.55%, Bankex down by 1.27%, Oil & Gas down by 1.15%, Auto down by 1.01% and Capital Goods down by 0.64% were the top losers on the sectoral index.

The top gainers on the Sensex were Sterlite Industries up by 1.37%, Tata Power up by 1.16%, Gail India up by 1.01%, Infosys up by 0.46% and Maruti Suzuki up by 0.41%.

On the flip side, ITC was down by 3.11%, Mahindra & Mahindra was down by 3.00%, Bajaj Auto was down by 2.15%, HDFC Bank was down by 2.11% and  HDFC was down by 2.01% were the top losers on the Sensex.

Meanwhile, the government will provide subsidy to LPG consumers in 18 districts across the country from June 1, 2013. The consumers in the select districts will get the subsidy amount transferred into their bank accounts linked with Aadhaar number. Earlier, the scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary by polls.

From June 1, consumers in 18 districts will get Rs 435 in their bank accounts every time, when they book a LPG refill. The government intends to extend the scheme to rest of the country but want to see the results of the roll-out in these districts.  Meanwhile, the move will help the government to cut its subsidy outgo by around Rs 8000-10,000 crore annually by eliminating diversions.

Oil Minister M Veerappa Moily said, although around 90 per cent of the LPG consuming population in these districts has Aadhaar number, the government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred. From September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, he added. There are around 14 crore LPG consumers in India and once the DBT for LPG is implemented, the government subsidy will reach the intended beneficiary only.    

The CNX Nifty opened at 6,098.70; about 26 points lower as compared to its previous closing of 6,124.05, and has touched a high and a low of 6,106.25 and 6,031.80 respectively.

The index is currently trading at 6,049.55, down by 74.50 points or 1.22%. There were 11 stocks advancing against 38 declines, while one stock remains unchanged on the index.

The top gainers of the Nifty were JP Associate up by 1.57%, Tata Power up by 1.44%, Sesa Goa up by 1.21%, Gail up by 1.09% and NMDC up by 0.96%.

On the flip side, ITC down by 3.12%, M&M down by 3.02%, HDFC Bank down by 2.35%, Kotak Bank down by 2.18% and Reliance Industries down by 2.13%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.77 points or 0.03% to 2,318.52, KLSE Composite increased 2.39 points or 0.13% to 1,777.31, Nikkei 225 surged 132.52 points or 0.98% to 13,721.55, KOSPI Composite added 3.89 points or 0.19% to 2,003.99 and Taiwan Weighted was up by 27.60 points or 0.33% to 8,270.89.

On the flip side, Hang Seng slipped 24.49 points or 0.11% to 22,459.82, Jakarta Composite declined 20.29 points or 0.40% to 5,109.36 and Straits Times was down by 23.48 points or 0.70% to 3,312.53.