Benchmarks bounce off day’s low; Rupee recovery aids

After dipping to day’s low level in knee-jerk reaction to the disappointing macro-economic data, Indian equity markets have now recouped some lost ground, with benchmark 30-share index, Sensex, even reclaiming the crucial 19,050 psychological mark, hanging with loss of close to half a percent, however, Nifty continues to trade above its crucial 5,750 bastion, which has turned out to be a strong support level. Unlike frontline indices, broader pivotal have extended their losses and are trading with loss of over half a percent. Shrugging off negative European counterparts, local equity markets have cut short some losses as availability of select blue chip stocks at attractive valuations drew bargain hunters. On the global front, European stocks extended the previous session's sell-off as worries that the US Federal Reserve could soon start to scale back its stimulus measures kept investors on edge.

Closer home, recovery of Indian currency from record low levels also helped ease investors concern, however, the fact the RBI may not got for rate cuts in its policy review on June 17 on account of higher than expected inflation data, maintained a downside pressure on the bourses. On the BSE sectoral front, stocks from Consumer Durable, Metal and Auto counters were the worst hit of the session, while those from Oil & Gas and Health Care counters aided some recovery. The overall market breadth on BSE is in favour of declines, which have thumped advances in the ratio of 1292: 801; while 123 shares remain unchanged.

The BSE Sensex is currently trading at 19,055.76, down by 87.24 points or 0.46% after trading in a range of 19,135.20 and 18,969.08. There were 10 stocks advancing against 19 declines, while one stock remains unchanged on the index.

The broader indices pared some loss; the BSE Mid cap index was down by 0.64% and Small cap index was down by 0.48%.

The only gaining sectoral indices on the BSE were, Oil & Gas up by 0.36% and Health Care up by 0.23% while Consumer Durables down by 7.23%, Metal down by 1.73%, Auto down by 1.12%, FMCG down by 1.04%, and PSU down by 0.51% were the top losers on the BSE. 

The top gainers on the Sensex were Jindal Steel up by 1.94%, Gail India up 1.11%, ONGC up by 0.76%, Cipla up by 0.62% and HDFC Bank up by 0.56%.

On the flip side, Coal India was down by 3.24%, Hero MotoCorp was down by 3.13%, Bajaj Auto was down by 2.96%, Hindalco Industries was down by 2.49% and Tata Steel was down by 2.38% were the top losers on the Sensex.

Meanwhile, in a big sigh of relief to Indian policymakers, the Consumer Price Index (CPI) slowed for the third straight month in May to 9.31%. As per the government’s data, provisional annual inflation rate based on all India general combined CPI for May 2013 on point to point basis stood at 9.31%, lower as compared to 9.39% for April 2013.

Further, CPI numbers for rural, urban and combined were at 129.8, 128.4 and 129.2 respectively. The corresponding inflation rates for rural and urban areas for May came in at 8.98% and 9.65%.  While final inflation rates for rural and urban for the month of April were revised at 9.16% and 9.73% respectively. The consumer food price based inflation came in at 10.65% versus 10.61% month-on-month.

Among all the constituents that make the CPI, cereals recorded the highest inflation of 16.29 percent in May. Beside this, inflation in pulses stood at 9.59 percent and in sugar it was 9.21 percent on an annual basis. The prices in the vegetables basket rose sharply to 9.78 percent in May from 5.43 percent in April. Inflation in protein-based items -- egg, meat and fish -- declined to 12.52 percent during the month, from 13.60 percent in April. In oils and fats segment, it was 5.49 percent, down from 7.52 percent in April. The overall food and beverages segment saw an inflation of 10.65 percent in May, higher than 10.61 percent in April. The rate of price rise in clothing and footwear segment stood at 9.72 percent during the month.

India, so far, has the highest retail inflation among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa. However, unlike most central banks, the Reserve Bank of India mainly uses the wholesale price index (WPI) for setting up its monetary policy. The data for wholesale price index-based inflation for May is expected on Friday. The WPI in April eased to over three-year low of 4.89 percent.

The CNX Nifty is currently trading at 5,763.15, down by 25.65 points or 0.44% after trading in a range of 5,789.95 and 5,738.60. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 1.99%, IDFC up by 1.86%, DLF up by 1.74%, IndusInd Bank up by 1.70% and BPCL up by 1.50%.

On the flip side, Hero MotoCorp down by 3.33%, Coal India down by 3.22%, Bajaj-Auto down by 2.80%, Axis Bank down by 2.65% and Tata Steel down by 2.33% were the major losers on the index.

All the Asian equity indices were trading in red; Jakarta Composite declined 1.11%, KLSE Composite dropped 0.41%, Nikkei 225 tumbled 0.21%, Straits Times slipped 0.52% and KOSPI Composite was down by 0.56%.

Markets in China, Hong Kong and Taiwan remained closed for the trade today.

Most of the European markets got off to a negative start; with DAX sliding by 0.11% and FTSE 100 shedding 0.28% while CAC 40 up by 0.22%.