Benchmarks magnify losses; reflect cautious undertone of global markets

Benchmarks have enlarged their losses, mirroring the cautious undertone of global markets as investors assess the odds of a reduction in US economic stimulus before the Federal Reserve reviews Policy. Benchmark 30-share and 50-share indexes, Sensex and Nifty, declining close to half a percent, are trading above 19,200 and 5,800 levels respectively. On the global front, where Asian pacific shares are trading in fine fettle, European markets have got off to a flattish start with mostly negative bias. Back home, re-surfacing concerns over rupee, which is not trading far away from its record low of 58.98 hit last week, is adding to the downside pressure of the bourses. Meanwhile, sharp decline of local shares from Banking, Consumer Durables and Fast Moving Consumer Goods are also weighing on the sentiment. On the flip side, stocks from Information Technology, Realty and Health Care counters are slogging to limit the downtrend of the bourses. While, shares of telecom services provider are trading higher by up to 2% in otherwise subdued market after the Telecom Regulatory Authority of India (TRAI) announced reduction in the national mobile phone roaming charges. The overall market breadth on BSE is in favour of advances which have outnumbered declines in the ratio of 994:978; while 136 shares remain unchanged.

The BSE Sensex is currently trading at 19,238.59, down by 87.28 points or 0.45% after trading in a range of 19,334.07 and 19,227.11. There were 10 stocks advancing against 20 declines on the index.

The broader indices pared some gains; the BSE Mid cap and Small cap index were trading up by 0.27% and 0.30% respectively.

The only gaining sectoral indices on the BSE were, TECk up by 0.65%, IT up 0.53% Realty up by 0.47% and HealthCare up by 0.04%, while Bankex down by 0.65%, Consumer Durables down by 0.04%, FMCG down by 0.23% and PSU down by 0.45% and Auto was down by 0.35% were the top losers on the BSE.

The top gainers on the Sensex were Infosys up by 0.97%, Tata Power up by 0.85%, Bajaj Auto up by 0.65%, Wipro up by 0.49% and RIL up by 0.45%. On the flip side, NTPC down by 1.43%, Tata Motors down by 1.30%, HDFC and ICICI Bank were down by 1.27%, Gail India down by 1.04% were the top losers on the Sensex.

Meanwhile, with an aim to revive the domestic economic growth, the Reserve Bank of India (RBI) has pitched for creation of a conductive environment for investment and faster clearances of projects. Indian economy growth slowed down to around 5 percent in the previous fiscal.

In the mid-quarter monetary policy review, the RBI governor, D Subbarao said ‘ key to invigorating growth is accelerating investment by creating a conducive environment for private investment, improving project clearance and implementation and leveraging on the crowding-in role of public investment’.

Referring to the industrial output, the RBI chief said that there is an urgent need to address the weakness in manufacturing activities, which have slowed with a persistent contraction in mining activity. Industrial production growth slowed down to 2.3 per cent in April after picking up in the preceding month to 3.4 percent.

By adding further, Subbarao said that sluggish growth in capital goods production points to damped investment demand whereas a pick-up in consumer non-durables could be indicative of a fragile return of consumer confidence.

On the agriculture sector, the governor said that spatial and temporal distribution of rainfall over the next three months will be crucial in determining the performance of agriculture. Last year’s robust Rabi production and the current monsoon performance so far augur well for growth prospects, he added.

The CNX Nifty is currently trading at 5,815.30, down by 34.75 points or 0.59% after trading in a range of 5,843.95 and 5,812.85. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were Infosys up by 1%, PowerGrid Corporation and Tata Motors up by 0.79%, Kotak Bank up by 0.64% and Bajaj Auto up by 0.56%. On the flip side, Ranbaxy Laboratories down by 3.14%, Bank of Baroda up by 2.53%, UltraTech Cement down by 2.52%, Axis Bank up by 1.96% and NTPC down by 1.76% were the major losers on the index.

Most of Asian equity indices were trading in green; Shanghai Composite up by 0.14%, Jakarta Composite surged 1.59%, Straits Times soared 1.35%, KOSPI Composite rose 0.93%, KLSE Composite up by 0.09% and Taiwan Weighted was up by 0.23%.

On the flip side, Hang Seng dropped 0.38% and Nikkei 225 down by 0.20%.

European markets got a cautious start; with CAC 40 declining 0.22%, DAX sliding by 0.12% and FTSE 100 added 0.40%