Feeble global cues drag benchmarks lower in early deals

Pressurized by feeble global cues, Indian equity indices have made a negative start with both the frontline gauges tumbling below their crucial 5,900 (Nifty) and 19,450 (Sensex) levels. The US markets suffered sharp selling on Wednesday and slipped to their lowest levels in a month on getting mixed economic data. ADP reported a weaker than expected private sector job growth in the month of May, raising concerns about Friday’s monthly jobs report. All the Asian equity indices were trading in red at this point of time 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 also 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. Additionally, shares of Jewellery makers like Titan Industries, Tribhovandas Bhimji Zaveri etc edged lower in early morning 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).

On the sectoral front, consumer durables and capital goods remained the only gainers while, metal, power and oil and gas remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 435 shares on the gaining side against 777 shares on the losing side while 62 shares remain unchanged.

The BSE Sensex opened at 19,503.68; about 65 points lower compared to its previous closing of 19,568.22, and has touched a high and a low of 19,503.74 and 19,395.32 respectively.

The index is currently trading at 19,429.48, down by 138.74 points or 0.71%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a weak start with 34.14% stocks advancing against 60.99% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices up by 0.33% and 0.13% respectively. 

The only gaining sectoral indices on the BSE were, Consumer Durables up by 0.48% and Capital Goods up by 0.28%, while Metal down by 0.93%, Power down by 0.85%, Oil and Gas down by 0.85%, PSU down by 0.84% and Realty down by 0.79% were the top losers on the sectoral index.

The top gainers on the Sensex were Cipla up by 0.97%, Wipro up by 0.83%, L&T up by 0.74%, TCS up by 0.43% and HUL up by 0.08%.

On the flip side, Bharti Airtel was down by 2.25%, Hindalco was down by 1.71%, Hero MotoCorp was down by 1.50%, Sun Pharma was down by 1.44% and NTPC was down by 1.36% were the top losers on the Sensex.

Meanwhile, with an aim to provide a uniform regulatory environment to the real estate sector, the government has approved the real estate bill to set up a regulator for the sector. The law will cover any developer coming up with a project of 1,000 sq metres and above. The bill has various provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly.

The bill also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. Further, relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction. The bill also makes it mandatory for builders to clarify the carpet area of the flat, which would be made uniform for the entire country.

The proposed real estate bill includes tough provisions to deter builders from using pictures of housing projects in foreign countries to lure buyers while advertising a project. They will have to use pictures reflecting the actual project, which will be delivered to home buyers. The developers will have to maintain a separate bank account for a particular project, and will not be allowed to divert the money for other projects. Failure to compliance for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail up to three years.

The regulator will act only if there is a complaint of any deviation from the project details disclosed by a developer. Further, the bill also prohibits developers from collecting any money from buyers before completing all necessary permits to start construction on the project.

The CNX Nifty opened at 5,895.00; about 28 points lower as compared to its previous closing of 5,923.85, and has touched a high and a low of 5,895.70 and 5,869.50 respectively.

The index is currently trading at 5,881.45, down by 42.40 points or 0.72%. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Cipla up by 0.84%, Bank of Baroda up by 0.74%, HCL Tech up by 0.73%, L&T up by 0.65% and TCS up by 0.48%.

On the flip side, Bharti Airtel down by 2.46%, Ranbaxy down by 1.95%, Hindalco down by 1.85%, Hero MotoCorp down by 1.66% and Reliance Infra down by 1.64% were the major losers on the index.

All the Asian equity indices were trading in red; Hang Seng declined 254.59 points or 1.15% to 21,814.65, KLSE Composite slipped 3.37 points or 0.19% to 1,771.05, Nikkei 225 decreased 40.86 points or 0.31% to 12,974.01, Straits Times tumbled 45.32 points or 1.40% to 3,198.11 and Taiwan Weighted was down by 75.21 points or 0.92% to 8,106.70.

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