Benchmarks continue negative trade; Oil stocks major laggard

Following a positive start and subsequent retreat, Indian equity markets continued trading in negative territory amid heavy selling in several blue chip stocks from across various sectors. The Sensex was down by 76.76 points, while Nifty fell by 28.65 points. Heavy capital outflows on the back of narrowing expectations of another rate cut in the central bank's upcoming policy review in mid-June also weighed on markets. In currency market, rupee continued depreciating against greenback amid increasing dollar demand from importers. On the sectoral front, shares from power, automobile, oil and realty stocks were among the prominent losers, while IT stocks, led by heavyweight Infosys, were attracting buyers. Select metal and healthcare stocks were also trading higher. Meanwhile, Infosys shares rallied over 4% after the country's second largest software services major re-appointed N R Narayana Murthy as its executive chairman with immediate effect to put the company back on high growth path. Credit rating agencies like CRISIL, ICRA and CARE were also trading higher after CRISIL's promoters made voluntary open offer to buy shares at significant premium to the Friday's closing price.

On the global front, Asian stock markets were mostly trading lower on Monday with investors pressing sales, tracking a weak lead from Wall Street where stocks ended on a negative note on Friday amid uncertainty about the outlook for the Federal Reserve. Back home, the market breadth was favoring negative trend; there were 801 shares on the gaining side against 1,072 shares on the losing side, while 103 shares remain unchanged.

The BSE Sensex is currently trading at 19,683.54, down by 76.76 points or 0.39% after trading in a range of 19,860.19 and 19,631.00. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19% and Small cap index was up by 0.02%

The top gaining sectoral indices on the BSE were IT up by 1.14%, Teck up by 1.10%, Health Care up 0.87% and Metal up 0.50%, while Oil & Gas down by 1.17%, Power down by 0.91%, Auto down by 0.87%, FMCG down by 0.70% and Consumer Durables down by 0.69% were the top losers on the BSE.

The top gainers on the Sensex were Infosys up by 4.08%, Bharti Airtel up by 1.50%, Dr Reddys Lab up by 1.37%, Coal India up by 1.22% and Wipro up by 0.95%.

On the flip side, Bajaj Auto was down by 4.20%,  Maruti Suzuki was down by 2.85%, Hero MotoCorp was down by 2.35%,  Sun Pharma was down by 2.15%, and TCS was down by 1.67% were the top losers on the Sensex.

Meanwhile, in a big disappointment to the government that despite its several policy decisions in the past few months to attract foreign investments to promote India as a favorable investment destination, the foreign direct investment (FDI) inflows for the fiscal 2012-13 recorded a decline of 38% to $22.42 billion compared to the $35.12 billion inflow in the previous year. In March, the country had attracted $1.52 billion FDI, taking the total to $22.42 billion in the entire financial year.

Sectors which received large FDI inflows during 2012-13 include services ($4.83 billion), hotel and tourism ($3.25 billion), metallurgical ($1.46 billion), construction ($1.33 billion), automobiles ($1.53 billion) and Pharmaceuticals ($1.12 billion). On country wise, Mauritius remained at the top spot with maximum FDI of $9.49 billion, followed by UK ($7.87 billion), Singapore ($5.25 billion), Japan ($2.97 billion) and United States ($1.11 billion).   

Foreign investment is considered crucial for economic development of a country and India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Meanwhile, the decline in foreign investments could put pressure on the country’s balance of payments and may also impact the value of the rupee. Indian rupee has declined by 12 paise to end at 11-month low of 56.50 against the US dollar on May 31.

In the past few months, the government has taken several policy decisions to attract foreign investments including allowing FDI in multi-brand retail and civil aviation sectors and seeking legislative approval for increasing FDI cap in insurance and pension sectors. 

The CNX Nifty is currently trading at 5,957.30 down by 28.65 points or 0.48% after trading in a range of 6,011.00 and 5,941.90. There were 16 stocks advancing against 33 declines and one remains unchanged on the index.

The top gainers of the Nifty were Infosys up by 3.97%, Lupin up by 2.79%, Bank of Baroda up by 2.26%, Coal India up by 1.31% and Bharti Airtel up by 1.28%.

On the flip side, Bajaj-Auto down by 4.20%, Maruti Suzuki down by 2.75%, Hero MotoCorp down by 2.64%, Grasim down by 2.18% and Sun Pharma down by 2.16% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite declined 1.07%, Nikkei 225 tumbled 3.72%, Straits Times slipped 0.49%, KOSPI Composite decreased 0.57% and Taiwan Weighted was down by 0.65%.

On the flip side, Shanghai Composite strengthened 0.23%, Hang Seng added 0.26% and KLSE Composite was up by 0.13%.