Benchmarks witness consolidation; Rupee hits life-time low

Indian equity indices, after witnessing over one and a half percent cut during passing week, witnessed consolidation in volatile day of trade on Monday. Though, both the gauges opened on the positive note supported by firm global cues, failed to hold on to intraday gains and slipped into the negative terrain as profit booking picked up in realty, banks, metals and pharmaceuticals, as the depreciating rupee hurt sentiments. The rupee today fell by a whopping 90 paise to hit a new life-time low of 58 during the trade on persistent dollar demand from importers and banks amid the US currency gaining overseas. Moreover, investors also remained sidelines ahead of Index of Industrial Production (IIP) data slated to be announced on June 12 and Wholesale Price Index (WPI) inflation on June 14. Some cautiousness also prevailed due to FICCI’s survey, which said that business confidence dropped for a consecutive quarter in January-March 2012-13, stood at 57.4 as compared to 61.2 during the previous quarter.

However, global cues remained supportive as most of the Asian equity indices shut shop in green after a report showed that the US added more workers than expected. European counters too traded mostly higher in early deals following a rebound in Japan’s benchmark Nikkei on the back of a strong gross domestic product (GDP) revision and a weaker yen.

Back home, consumer durables mainly bore the brunt of profit booking. Stocks of Rajesh Exports, Gitanjali Gems and Titan Industries fell after Chief Economic Advisor Raghuram Rajan, within days of hiking import duty on gold, said that government could take more steps to curb demand for the gold amidst widening current account deficit (CAD). Metal stocks too declined following uninspiring Chinese economic data released over the weekend. China is the world’s largest consumer of copper and aluminum. Additionally, public sector oil marketing companies viz. IOC, BPCL, HPCL all edged lower as US crude oil futures traded near the highest level in more than two weeks amid speculation that demand will improve in the United States, the world's biggest crude oil consumer.

On the flip side, buying in software and technology counters supported the sentiments. Stocks like Infosys, TCS, Wipro and HCL Technologies edged higher after rupee dropped to a record low during the trade tracking gains in the US dollar after disappointing data from China and slightly better-than-expected US jobs data. Additionally, stocks related to FMCG space too surged as southwest monsoon hit Mumbai a day earlier than its usual date on Saturday.

The NSE’s 50-share broadly followed index Nifty lost by tad over 3 points to end below its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by just over ten points to hold its psychological 19,400 mark. However, the broader markets witnessed massacre during the trade and snapped the session with a cut of about a percent.

The overall volumes stood at over Rs 1.39 lakh crore, which remained on the higher side as compared to that on Friday. The market breadth remained in favor of declines as there were 880 shares on the gaining side against 1,420 shares on the losing side while 145 shares remain unchanged.

Finally, the BSE Sensex gained 11.84 points or 0.06% to settle at 19,441.07, while the CNX Nifty declined by 3.00 points or 0.05% to end at 5,878.00.

The BSE Sensex touched a high and a low of 19,585.75 and 19,366.82, respectively. The BSE Mid cap index down by 0.88% and Small cap index was down by 0.79%.

The top gainers on the Sensex were, Wipro up by 2.12%, Infosys up by 1.64%, NTPC up 1.55%, HDFC up 1.53% and Bajaj Auto up by 1.29%, while Jindal Steel down by 4.46%, BHEL down 3.00%, Maruti Suzuki down 2.18%, ICICI Bank down 2.03% and Tata Motors down by 1.82% were the top losers on the index. 

The only gainers on the BSE Sectoral space were, IT up 1.01%, TECk up 0.46%, FMCG up 0.14% and Oil & Gas up 0.11%, while Consumer Durables down 2.08%, Realty down 1.52%, Bankex down 1.12%, Health Care down 1.04% and Metal down 0.96% were the top losers on the sectoral space.

Meanwhile, concerned over the fall in rupee value to lifetime low of over 57.50 against dollar, the finance ministry said that there is an unwarranted panic in the market and will settle down in some time. Raghuram Rajan, chief economic adviser at the finance ministry has said the weakness in rupee could be a temporary phenomenon and the government will continue to take measures to curb the current account deficit and does not want the rupee to be volatile.

Furthermore, Economic Affairs Secretary Arvind Mayaram said that presently, dollar is appreciating against all the currencies across the world and the rupee has not weakened as much as some of its peers. The central bank also stated that it will do everything to turn down the volatility, but will not disclose its strategy. The RBI has forex reserves of over USD 290 billion to deal with the situation on the external sector.

The rupee is depreciating mainly due to the high CAD, which widened due to rising gold import and high crude oil prices. Further, persistent dollar demand from importers and banks also added to the fall in rupee value. 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. While, the CAD widened to a record high of 6.7% in the third quarter of FY13.

The CNX Nifty touched a high and low of 5,931.65 and 5,857.40 respectively. 

The top gainers on the Nifty were HDFC up by 1.95%, NTPC up 1.76%, Infosys up 1.71%, Bajaj Auto up 1.69% and HCL Tech up by 1.65%.

On the flip side, the top losers of the index were, Jindal Steel down 4.19%, BPCL down 2.51%, BHEL down 2.46%, IndusInd Bank down 2.16% and IDFC down by 2.14%.

The European markets were trading mixed, France’s CAC 40 down by 0.08%, Germany’s DAX up by 0.98% and the United Kingdom’s FTSE 100 up by 1.18%.

Asian markets ended mostly higher on Monday as US jobs data helped allay concern that the Fed might wind down its stimulus. Japan’s Nikkei went home with strong gains following recent losses after its Prime Minister promised new tax cuts. Moreover, Japan revised its growth data for the January-to-March period to 4.1% in annualized terms, higher than the 3.5% growth initially reported. Hong Kong shares closed higher on Monday, with banks leading the way.

Markets in China are closed through Wednesday for the Dragon Boat Festival holiday.