Weakness persist in markets amid sustained selling

Following a negative start and subsequent marginal gain, Indian equity markets again slipped into negative territory and continued trading lower in the late morning session on Wednesday. The Sensex was down by 60.93 points, while the Nifty fell by 26.50 points. The central bank’s move to curb gold imports by stopping importers from buying on credit, as the bank blames large gold and oil imports for the country’s record high current-account deficit, also failed to boost markets sentiment. In currency market, rupee trading flat in positive territory against greenback, after touching a week’s high in the early trade amid dollar selling by banks and exporters. On the sectoral front, realty, oil and health care stocks were trading in green, while FMCG, IT and banking stocks were trading in red. Meanwhile, shares of Indian property companies fell after a minister said the Indian cabinet had approved late on Tuesday the appointment of the first regulator for a sector that has struggled with a reputation for corrupt deals. 

On the global front, Asian shares hit 2013 lows on Wednesday as uncertainty over when the Federal Reserve would begin trimming its massive stimulus programme fanned worries about funds exiting the region, raising caution before key US jobs data later this week. Back home, the market breadth was favoring negative trend; there were 886 shares on the gaining side against 987 shares on the losing side, while 132 shares remain unchanged.

The BSE Sensex is currently trading at 19,484.85, down by 60.93 points or 0.31% after trading in a range of 19,564.91 and 19,441.35. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01% and Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were, Realty up by 0.45%, Oil & Gas up by 0.45% and Health Care up by 0.22%, while FMCG down by 0.97%, IT down by 0.59%, Teck down by 0.53%, Bankex down by 0.44% and Consumer Durables down by 0.43% were the top losers on the BSE.

The top gainers on the Sensex were Gail India up by 1.53%, Sun Pharma up by 1.28%, Hindalco Industries up by 0.84%, ONGC up by 0.55% and Dr Reddy’s up by 0.53%.

On the flip side, ITC was down by 1.82%, Coal India was down by 1.54%, Bajaj Auto was down by 1.07%, ICICI Bank was down by 0.92% and Infosys was down by 0.83% were the top losers on the Sensex.

Meanwhile, as per the Chief Economic Advisor in the Finance Ministry Raghuram Rajan, recent initiatives of the government will push economic growth rate in the current fiscal. Rajan said that the government is not satisfied with the 5 percent GDP growth in previous fiscal and hoped that good Rabi crop and accelerated government spending would propel growth.

Referring to the inflation, Rajan said that the overall WPI inflation is showing signs of easing and efforts should be made to bring down food inflation. The WPI in April stood at 4.89 percent. Retail inflation too would come down and hoped that it would find reflection in the next monetary policy of the RBI on June 17.

By adding further, he said ‘There are a number of pieces of legislations which have to be passed. If we can summon up for the passage of GST, insurance and companies bills that could be a signal to domestic and external investors that there is a forward movement’. Rajan hoped that reforms legislations like the GST and insurance bill will be passed soon to improve investor confidence. The Goods and Service tax (GST) Bill will usher in a new indirect tax regime, while, the insurance bill seeks to raise FDI cap in the sector to 49 percent, from existing 26 percent.

The CNX Nifty is currently trading at 5,892.95 down by 26.50 points or 0.45% after trading in a range of 5,921.80 and 5,883.70. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were DLF up by 2.02%, GAIL up by 1.43%, Sun Pharma up by 1.29%, Hindalco up by 1.29% and BPCL up by 0.71%.

On the flip side, Ambuja Cements down by 2.15%, ITC down by 1.85%, ACC down by 1.77%, Coal India down by 1.66%, and HCL Technologies down by 1.61% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite slipped 0.25%, Hang Seng declined 1.21%, Jakarta Composite dropped 0.85%, Nikkei 225 decreased 3.83%, KLSE Composite dipped 0.01 points, Straits Times contracted 1.39%, KOSPI Composite was down by 1.52% and Taiwan Weighted was down by 0.11%.