Benchmarks continue weak trade; GDP data fails to lift markets

The benchmarks have extended their early losses in the late morning session and slipped below crucial support levels following continued weakness in the rupee against the US dollar. The rupee, which is down for the fourth straight session, came under pressure following the Reserve Bank of India Governor D Subbarao's comments inflation still remained high and it will take into account the current account deficit for policy decisions. The sentiment turned bearish on concerns that the RBI may not cut rates at its next policy review meet in June.

On the global front, 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, Gross domestic product (GDP), a measure of the country's total economic output, expanded at a 4.8% percent for the fourth quarter ended March 31, 2013, much in line with the expectation and better than the 4.5% growth in the previous three months, which now stands revised to 4.7%.GDP at factor cost at constant (2004-05)  prices in the year 2012-13 stood at  Rs 55,05, 437 crore (as against Rs 55,03,476 crore estimated earlier on 7th February, 2013), showing a growth rate of 5.0% over the First Revised Estimates of GDP for the year 2011-12 of Rs 52, 43,582 crore, released on  January 31, 2013.

The traders were seen piling up positions in IT and Health Care while selling was seen in FMCG, Bankex and Auto sector. In scrip specific actions, Unitech  zoomed  after the realty major reported an over thirteen-fold jump in consolidated net profit at Rs. 30.33 crore for the quarter ended March 31. Ruchi Soya soared after the edible oil company reported over two fold jump in standalone net profit at Rs 78.58 crore for the quarter ended March 31, due to lower financial costs, higher export realisation and increased sale of branded oils. United Breweries surged after the company reported a standalone net profit at Rs 5.85 crore for the fourth quarter ended March 31, 2013. SAIL tanked after the state-owned steel major reported a steep 71.68 per cent fall in standalone net profit at Rs 446.53 crore for the fourth quarter ended March 31, 2013 due to fall in sales and rise in cost. MMTC slipped after state-run trading giant reported a huge 97.52% dip in its net profit to Rs 2.21 crore for the quarter ended March 31, 2013, on account of decline in total revenue.DLF dropped after India's largest real estate developer posted its first-ever quarterly net loss, weighed down by slowing home sales in a sluggish economy. MTNL tumbled after the state-run company reported net loss which widened to Rs 1,985.93 crore for the quarter ended March 31, 2013 due to higher outgo for employee remuneration. Fortis Healthcare dipped after the company posted a loss of Rs 116 crore in the fourth quarter of fiscal year ended March 31, 2013, as against a loss of Rs 42 crore quarter in the comparable quarter of the year ago period. Educomp Solutions declined after the firm reported a consolidated net loss of Rs 147.93 crore for the quarter ended March 31, 2013. Suzlon Energy traded lower after the wind turbine maker reported its biggest ever quarterly loss of Rs 1,913 crore in Q4 of 2012-13 as the company paid huge interest on its debt even as sales volume plummeted. Aurobindo Pharma plummeted after the pharma major reported consolidated net profit of Rs 108.6 crore for the fourth quarter ended March 31 2013. The consolidated total income from operations of the company in Q4 went up to Rs 1,570 crore.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,000 and 19,000 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 726: 1019.

The BSE Sensex is currently trading at 19978.87, down by 236.53 points or 1.17% after trading in a range of 20191.29 and 19917.57. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39% and Small cap index was down by 0.32%. The only gaining sectoral indices on the BSE was, IT up by 0.29%  and Health Care up by 0.06% while, FMCG down by 1.54%, Bankex down by 1.33%, Auto down by 1.25% , Oil & Gas down by 1.22%, and Realty down by 1.12% were the top losers on the BSE.

The top gainers on the Sensex were Sterlite Industries up by 1.75%, Tata Power up by 1.05%, Gail India up by 1.01%, Infosys up by 0.61% and Dr Reddys Lab up by 0.44%.

On the flip side, Mahindra & Mahindra was down by 3.15%, ITC was down by 3.05%, RIL was down by 2.24%, HDFC Bank was down by 2.10% and Hindalco Inds was down by 1.97% were the top losers on the Sensex.

Meanwhile, Diminishing the hopes of further rate cut, RBI Governor D Subbarao said that there is upside risks to inflation and containing the high current account deficit (CAD) would be priority, adding that India’s economic growth is significantly moderated, while retail inflation is still high. The growth has slowed down to decade low at around 5 percent in FY13. While, the wholesale price based inflation (WPI) fell to over three-year low of 4.89% in April, retail inflation was high at 9.39%.

By adding further, Subbarao said that the country’s balance of payment is under stress and high CAD is leading to the weakening of rupee. The governor emphasized that large CAD is the biggest risk factor to the economy and said ‘global prices especially commodity prices had certainly softened in the last few months, but it would not take the soft prices for granted’. High oil and gold imports pushed Current Account Deficit (CAD) to a record high of 6.7% in the third quarter of   previous fiscal.

The central bank is scheduled to announce its mid-quarter policy review on June 17. In its last review, the RBI had cut the key interest rates by 0.25 percent.

The CNX Nifty is currently trading at 6,048.05 down by 76.00 points or 1.24% after trading in a range of 6,106.25 and 6,031.80. There were 11 stocks advancing against 39 declines on the index. The top gainers of the Nifty were Sesa Goa up by 2.00%, Tata Power up by 1.33%, JP Associate up by 1.20%, Gail up by 1.19% and HCL Tech up by 1.08%.

On the flip side, M&M down by 3.14%, ITC down by 3.06%, Reliance Industries down by 2.42%, Hindalco down by 2.39% and HDFC Bank down by 2.29% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.49 points or 0.02% to 2,318.24, KLSE Composite increased 1.55 points or 0.09% to 1,776.47, Nikkei 225 surged 247.15 points or 1.82% to 13,835.43, KOSPI Composite added 3.97 points or 0.20% to 2,004.77 and Hang Seng up 6.47points or 0.03% to 22,490.78. On the flip side, Jakarta Composite declined 18.51 points or 0.36% to 5,111.13, Taiwan Weighted was  down by 2.94 points or 0.04% to 8,240.35 and Straits Times was down by 20.79 points or 0.64% to 3,315.42.