Benchmarks trade near day’s high; Nifty reclaims 5,900 level

Benchmark equity indices paring substantial losses have climbed to day’s high point aided by the recovery of rate sensitive, Auto and Bankex counters. Meanwhile, flat to positive start of European markets also provided strength to Indian equity markets, which shrugging off mostly negative regional counterparts, cut short most of the losses, with 50-share index, Nifty, trading tad below its neutral line and even reclaiming the crucial 5,900 mark. 30-share index, Sensex, now trading with loss of over 50 points, has reclaimed its 19,500 bastion on lower level buying. Broader indices too have pruned major portion of their losses. On the global front, European shares have got off to a flat yet 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 today.

Closer home, while stocks from Capital Goods, Auto and Bankex counters were the major pillar of support for benchmarks, stocks from oil & Gas, Public Sector Undertaking (PSU) and Health Care were the weak links of trade. Some encouraging statements of fiscal deficit coming under control by deputy chairman of the planning commission, Montek Singh Ahluwalia also have supported the sentiments at D-street. Meanwhile, retreat of Indian rupee from psychological 57/$ level also has aided the sentiment. The overall market breadth on BSE is in favour of declines, which have outnumbered advances in the ratio of 1165:828; while 144 shares remain unchanged.

The BSE Sensex is currently trading at 19,512.41, down by 55.81 points or 0.29% after trading in a range of 19,519.20 and 19,395.32. There were 9 stocks advancing against 21 declines on the index. The broader indices too pared losses; the BSE Mid cap and Small cap index were trading lower by 0.22% and 0.06% respectively.

The only gaining sectoral index on the BSE was, Capital Goods up by 0.54%, Auto up by 0.04% and Bankex up by 0.01%. While, Metal down by 1.09%, Oil and Gas down by 0.85%, PSU down by 0.77%, Health Care down by 0.70% and Power down by 0.59% were the top losers on the BSE.

The top gainers on the Sensex were HDFC up by 1.58%, Wipro up by 1.52%, L&T up by 1.09%, Maruti Suzuki up by 0.99% and ICICI Bank up by 0.67%. On the flip side, Bharti Airtel was down by 2.25%, Hindalco was down by 2.05%, Gail India was down by 1.64%, Tata Steel was down by 1.50% and Infosys was down by 1.42% were the top losers on the Sensex.

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 is currently trading at 5,915.20 down by 8.65 points or 0.15% after trading in a range of 5,915.90 and 5,869.50. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Axis Bank up by 2.22%, HCL Technologies up by 1.82%, HDFC up by 1.78%, L&T up by 1.36% and Maruti Suzuki up by 1.20%. On the flip side, Bharti Airtel down by 2.28%, Hindalco down by 1.90%, GAIL down by 1.89%, Ranbaxy down by 1.76% and Infosys down by 1.41% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng declined 0.95%, KLSE Composite slipped 0.32%, Straits Times tumbled 1.62%, Nikkei 225 declined by 0.85% and Taiwan Weighted was down by 1.05%.

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

European markets have got off to flat to positive start; with DAX trading higher by 0.05% and FTSE 100 inching up by 0.11%.