Benchmarks end slightly in red on Thursday

Indian equity benchmarks resumed their southward journey after a day of halt on Thursday with both the frontline gauges ending slightly in red. Markets kick-started the day’s trade on daunting note pressurized by feeble global cues, but displayed a decent pullback afterwards, supported by recovery in rate sensitive counters viz., Auto, Realty and Bankex. The sentiments on the street also turned somewhat positive after Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission stated that fiscal deficit is clearly coming under control. The country’s fiscal deficit fell to 4.9% of GDP in the fiscal year ended March and the government targets it at 4.8% in the current fiscal year.

Flat-to-positive start of European markets also provided strength to Indian equity markets and markets gained positive trajectory, recapturing 5,950 (Nifty) and 19,600 (Sensex) in the last leg of trade. European shares got off to a positive start even as investors await policy announcement from European Central Bank and Bank of England. The expectation is that ECB will probably keep its benchmark interest rate unchanged at record low of 0.5% when it meets later on June 6.

But, weakness in Asian counters took their toll on domestic sentiments dragging the Indian bourses back into red in the dying hours. All the Asian equity indices shut shop in red with Japanese Nikkei declining below 13,000 for the first time in two months on Thursday, extending its slide from a five and a half year high hit last month to the verge of bear-market territory.

Back home, sentiments remained frail after the rupee weakened against the US dollar and hit lowest since June 28, 2012. The partially convertible rupee was at 56.91, down 18 paise against its previous close. Meanwhile, index heavyweight Reliance Industries (RIL) declined on absence of any positive surprise announcement at its annual meet, even though Chairman Mukesh Ambani said that the company planning to invest Rs 1.5 lakh crore in its businesses over the next three years. Additionally, shares of Jewellery makers like Titan Industries, Tribhovandas Bhimji Zaveri etc edged lower during the trades after the government increased customs duty on gold by two percentage points to eight per cent, to arrest rising gold imports, which could widen the current account deficit (CAD).

The NSE’s 50-share broadly followed index Nifty dipped by two points to hold its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by about fifty points to end below its crucial 19,550 mark. Moreover, broader markets too traded in-line with benchmarks and snapped the session slightly in green.

The overall volumes stood above Rs 1.52 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth remained in favor of declines as there were 1,140 shares on the gaining side against 1,226 shares on the losing side while 136 shares remain unchanged.

Finally, the BSE Sensex lost 48.73 points or 0.25% to settle at 19,519.49, while the CNX Nifty declined by 2.45 points or 0.04% to end at 5,921.40.

The BSE Sensex touched a high and a low of 19,635.37 and 19,395.32, respectively. The BSE Mid cap index up by 0.11% and Small cap index was up by 0.14%.

The top gainers on the Sensex were, ICICI Bank up by 1.70%, Wipro up by 1.38%, Maruti Suzuki up 1.19%, SBI up 0.86% and L&T up by 0.61%, while Bharti Airtel down by 2.17%, Sun Pharma down 1.87%, NTPC down 1.85%, Infosys down 1.41% and Tata Steel down by 1.30% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Bankex up 0.83%, Realty up 0.48% and Capital Goods up 0.28%, while Health Care down 1.19%, Oil & Gas down 0.72%, Power down 0.59%, Metal down 0.41% and TECk down 0.40% were the top losers on the sectoral space.

Meanwhile, in an attempt to rein in surging demand for the precious metal like gold, the government has raised the import duty to 8% from 6% for the second time in six months. India is the largest consumer of gold and the recent drop in its price has further boosted demand. This move is likely to result in a sharp decline in shipments over the next couple of months.

In May, India’s gold imports touched 162 tonnes, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Strong demand of gold has become a worrying factor for the Indian policymakers, as the country is facing a record current account deficit (CAD), partly stoked by Indian consumers’ appetite for the yellow metal. The CAD widened to a record high of 6.7% in the third quarter of FY13. 

Recently, the World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put restrictions on banks on gold imports.  

The CNX Nifty touched a high and low of 5,956.55 and 5,869.50 respectively. 

The top gainers on the Nifty were Reliance Infra up by 3.25%, HCL Tech up 2.71%, Axis Bank up 2.66%, Ambuja Cement up 2.51% and Bank of Baroda up by 2.34%.

On the flip side, the top losers of the index were, Bharti Airtel down 2.53%, Lupin down 1.86%, Infosys down 1.75%, Sun Pharma down 1.70% and NTPC down by 1.66%.

The European markets were trading in green, France’s CAC 40 up by 0.46%, Germany’s DAX up by 0.33% and the United Kingdom’s FTSE 100 up by 0.13%.

Asian equity markets closed shutter on a weak note after touching fresh lows in 2013 on Thursday, following a lower-than-expected growth in private sector employment in May in the world's top economy. Japan's benchmark Nikkei ended below 13,000 for the first time in two months on extending its decline from a 5-1/2 year high hit last month to the verge of bear-market territory. Shares in Taiwan came under pressure as investors took cues from a plunge suffered by Wall Street.

Stock markets in China, Indonesia and South Korea remained shut for the trade today on account of public holidays.