Benchmarks trim losses; Nifty surpasses 5,700 mark

Indian equity markets pared minor losses but continued to stay below neutral line on account of selling in frontline blue chip counters and taking weak cues from European counterparts. The street shrugged aside Finance Minister P Chidambaram’s assurance of more policy changes to revive economic growth and steps being taken to stabilize the nation’s currency. The mood on the street were so dampen that investors didn’t pay heed towards the World Bank report which forecasted 6.7% growth rate for India by next fiscal as exports and private investment are projected to strengthen and provide a boost to growth. Traders were seen selling in Auto, Power and Realty sector stocks. In the scrip specific development, Apollo Tyres plunged after company announced a $2.5 billion amounting Rs 14,500 crore deal to acquire US-based Cooper Tire & Rubber. Sun Pharmaceutical Industries was trading in red after the drug maker stated that it agreed to pay $550 million to Pfizer Inc and Takeda GmbH to settle a patent dispute in the US.

On the global front, all the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,750 and 18,900 levels respectively. The market breadth on BSE was negative in the ratio of 666:1474, while 142 scrips remain unchanged. 

The BSE Sensex is currently trading at 18,858.89, down by 182.24 points or 0.96% after trading in a range of 18,914.13 and 18,765.53. There were 7 stocks advancing against 22 declines while 1 stock remained unchanged on the index.

The broader indices continued to languish in red; the BSE Mid cap and Small cap indexes were trading lower by 1.08% and 0.84% respectively.

The were no gainers in sectoral indices on the BSE while Auto down by 1.90%, Power down by 1.61%, Realty down by 1.47%, PSU down by 1.43% and Health Care down by 1.38% were the top losers on the BSE.

The top gainers on the Sensex were Hindalco Industries up by 4.27%, Bharti Airtel up by 3.27%, Jindal Steel up by 1.40%, Hero MotoCorp up by 0.98% and SBI up by 0.56%. On the flip side, Tata Motors down by 3.41%, Sun Pharma was down by 2.96%, BHEL was down by 2.51%, Tata Power down by 2.31% and Bajaj Auto down by 2.19% were the top losers on the Sensex.

Meanwhile, attributing the rupee's decline to the surge in dollar demand in international markets, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the government has been taking steps to deal with the economic situation and hoped that forex market will stabilize in coming days. Ahluwalia said that rupee is falling in tandem with all emerging market economies because of their high current account deficit. The rupee had touched an all-time intra-day low of 58.98 recently on account of strong dollar demand in international market. Presently dollar is appreciating against all the currencies across the world and the rupee has not weakened as much as some of its peers with South African currency depreciating by around 11 per cent.

Currently, to check the rupee depreciation, the RBI intervened which suggests that it is feeling that market pressures were pushing the currency to an unnecessarily low point. It was learnt that the central bank asked some state owned banks to sell US dollars when the local unit was trading at 58.95/$. Accordingly, banks include Union Bank of India, Canara Bank, SBI , Syndicate Bank and others have sold the greenback to tune of $4-5 billion.   

The rupee is depreciating mainly due to the high CAD, which widened on account of 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. The CAD widened to a record high of 6.7% in the third quarter of FY13. 

The CNX Nifty is currently trading at 5,703.60 down by 56.60 points or 0.98% after trading in a range of 5,729.85 and 5,683.10. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Hindalco up by 3.85%, Bharti Airtel up by 3.08%, Jindal Steel up by 1.08%, Hero MotoCorp up by 1.07% and SBI up by 0.62%. On the flip side, PNB down by 4.14%, Tata Motors down by 3.59%, NMDC down by 3.47%, Bank of Baroda down by 3.44% and JP Associates down by 3.12% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite slumped 2.83%, Hang Seng tumbled 2.19%, Jakarta Composite declined 1.58%, KLSE Composite dropped 1.44%, Nikkei 225 crumbled 6.35%, Straits Times decreased 0.63%, KOSPI Composite contracted 1.42% and Taiwan Weighted was down by 2.03%. 

The European markets were trading in red; France’s CAC 40 was down 1.17%, Germany’s DAX lost 2.01% and the United Kingdom’s FTSE 100 edged lower 1.27%.