Benchmarks trade mildly in red on weak Asian cues

Snapping their three day’s gaining streak, Indian equity benchmarks on Tuesday have made a flat-to-negative start tailing weak cues from Asian peers. The Asian equity indices were mostly in the red at this point of time as investors treaded cautiously at higher levels amid concerns about the Chinese economy. However, the US markets closed higher overnight, despite some pullback in the late trades that took the major indices down well off their day’s high. Back home, sentiments also remained dampened, as foreign institutional investors (FIIs) remained net seller, offloading shares worth a net Rs 1.48 crore on July, 1, 2013.

Some pessimism also came in after core sector growth remained sluggish. The core sector of eight infrastructure industries recorded a growth of 2.3 per cent in May this year against 7.2 per cent in the year-ago period, mainly on the back of contraction in coal, crude oil, natural gas and fertiliser output. Also, the government’s effort to increase FDI limits in sectors such as defence and telecom is likely to get a jolt with the home ministry opposing higher ceiling, raising security concerns. However, losses remained capped as public sector oil marketing companies like BPCL, HPCL and IOC edged higher after raising diesel price by 50 paise per litre, excluding state levies.

On the sectoral front, consumer durables witnessed the maximum gain in trade followed by oil and gas and metal, while auto, capital goods and software remained the top losers on the BSE sectoral space. However, the broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 721 shares on the gaining side against 493 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 19573.93; about 3 points lower compared to its previous closing of 19577.39 and has touched a high and a low of 19589.14 and 19505.98 respectively. The index is currently trading at 19560.15, down by 17.24 points or 0.09%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 56.86% stocks advancing against 38.88% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.29% and 0.34% respectively. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.61%, Oil & Gas up by 0.70%, Metal up by 0.16%, Health Care up by 0.10% and Bankex up by 0.02%, while Auto down by 0.57%, Capital Goods down by 0.49%, IT down by 0.45%, Power down by 0.38% and FMCG down by 0.30% were the top losers on the sectoral index.

The top gainers on the Sensex were Gail India up by 1.75%, Tata Steel up by 1.25%, Bharti Airtel up by 1.20%, ICICI Bank up by 1.11% and RIL up by 0.72%.

On the flip side, Hero MotoCorp was down by 1.50%, Tata Motors was down by 1.29%, Tata Power was down by 1.02%, L&T was down by 1.00% and Maruti Suzuki was down by 0.96% were the top losers on the Sensex.

Meanwhile, Prime Minister, Manmohan Singh has warned that current account deficit (CAD) will continue to remain high for two more years and has urged policy makers to take steps as quickly as possible to contain it. In the preface to the 12th Five-Year Plan document, the PM noted that the CAD will remain high in 2013-14 and will reach comfort levels after two years.

Manmohan Singh has stated that 'The high CAD poses the challenge of having to ensure financing of a somewhat elevated deficit for two more years' and has said that this must be done through long-term capital flows, including FDI”. PM has opined that though India’s foreign exchange reserves are strong, they cannot be a source for financing prolonged deficits. Further, India's growth aspirations pose a challenge for its democratic system and requires a consensus about the 'difficult but necessary policy choices we face' amidst the country's 'vigorously competitive politics.' He expects 6.5% growth in the next year and said that to achieve its ambitious target of 8% growth through the 12th plan, India has to attain 9%-plus growth by 2015-16.

The CNX Nifty opened at 5,885.50; about 13 points lower as compared to its previous closing of 5,898.85, and has touched a high and a low of 5,898.80 and 5,873.05 respectively.

The index is currently trading at 5,887.15, down by 11.70 points or 0.20%. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were IDFC up by 1.70%, ICICI Bank up by 1.22%, Gail up by 1.18%, Tata Steel up by 1.18% and Lupin up by 0.92%.

On the flip side, Hero MotoCorp down by 1.68%, Tata Motors down by 1.41%, Tata Power down by 1.24%, Ambuja Cements down by 1.16% and Jindal Steel down by 1.14% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped 7.55 points or 0.38% to 1,987.70, Hang Seng dipped 81.78 points or 0.39% to 20,721.51, Jakarta Composite declined 38.44 points or 0.80% to 4,739.01, KLSE Composite slipped 2.83 points or 0.16% to 1,772.31 and KOSPI Composite was down by 1.79 points or 0.10% to 1,853.94.

On the flip side, Nikkei 225 rose 128.18 points or 0.93% to 13,980.68, Straits Times surged 27.07 points or 0.86% to 3,168.00 and Taiwan Weighted was up by 6.99 points or 0.09% to 8,042.99.