Benchmarks snap three days winning streak

Indian equity indices which showcased awe-inspiring performances in last three back to back sessions, went on to consolidate in Tuesday’s trade by settling with a cut of over half a percent. Sentiments remained down-beat since beginning on account of sluggish core sector data. 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 was likely to get some opposition with the home ministry differed on higher ceiling, raising security concerns.

Selling got intensified after European markets turned in the red with CAC and FTSE sliding by about quarter a percent in early deals despite positive US and Euro-zone data. Asian markets too ended mostly in the red, as investors treaded cautiously at higher levels amid concerns about the Chinese economy.

Back home, sentiments remained under pressure as Indian rupee gave up its initial gains and depreciated by over ten paise at the time of equity markets closing. Selling in automobile space too dampened the sentiments as stocks like Tata Motors, Bajaj Auto, Maruti Suzuki and Ashok Leyland edged lower after reporting lower sales numbers in June due to slow down in demand.  Ashok Leyland reported a drop of 31.30% in June sales at 6,967 vehicles, as against 10,146 vehicles sold in same month year ago, while Bajaj Auto registered 14% fall in total sales including exports to 295,749 units in June 2013 against 345,162 units in June 12.

Powers stocks too were under pressure led by India’s largest private power producer Tata Power Company, down by about two percent after global credit rating agency Moody’s Investors Service downgraded the company’s outlook to negative from stable. Oil and gas shares too witnessed profit taking after they gained following the hike in natural gas price by the government to $8.4 mBtu from $4.2. Banking stocks also ended lower after 26 companies submitted their applications to the RBI for bank licence. Further the Finance Minister P Chidambaram said that there was no ceiling on the number of entities which can be permitted to operate a bank.

The NSE’s 50-share broadly followed index Nifty lost over forty points but managed to hold its psychological 5,850 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex declined by over one hundred and ten points to finish below its psychological 19,500 mark.

Moreover, the broader markets too ended the session slightly in the red. The market breadth remained in favor of declines as there were 1,131 shares on the gaining side against 1,213 shares on the losing side while 148 shares remain unchanged.

Finally, the BSE Sensex lost 113.57 points or 0.58% to settle at 19,463.82, while the CNX Nifty declined by 41.30 points or 0.70% to end at 5,857.55.

The BSE Sensex touched a high and a low of 19,589.14 and 19,442.75, respectively. The BSE Mid cap index was down by 0.37% and Small cap index was down by 0.10%.

The top gainers on the Sensex were, BHEL up by 2.74%, Gail India up 2.66%, Bharti Airtel up 2.51%, Sterlite Industries up 1.84% and ICICI Bank up by 0.89%, while Jindal Steel down by 4.21%, Hero MotoCorp down 2.26%, Tata Power down 1.87%, ONGC down 1.83% and Infosys down 1.72% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Consumer Durables up 0.77% and Healthcare up 0.52%, while Realty down 1.78%, PSU down 1.05%, Oil & Gas down 1.01%, Bankex down 0.78% and Auto down 0.76% were top losers on the sectoral space.

Meanwhile, growth in the eight core industries' slowed down to 2.3% in May as against 7.2% in the same month of previous year, reflecting slowdown in the economy. Among the eight core sectors, representing 38% weight in the Index of Industrial Production (IIP), crude oil, coal, natural gas and fertilizer sectors recorded negative growth in their output, while the other sector showed expansion in May, however substantially slowed when compared with same month a year ago.

On the positive side, Petroleum refinery production, representing 5.94% weight in IIP index grew by 5.0% in May, 2013 compared to 23.4% in May, 2012.  Cumulative growth of Petroleum refinery production during April-May, 2013-14 was 5.3% as compared to 22.1% recorded in the same period of previous fiscal. Electricity generation having 10.32% weight in index registered a growth of 6.2% in May, 2013 compared to 5.9% growth in May, 2012. On a cumulative basis, Electricity generation during April- May, 2013-14 was 4.9 % as compared to 5.6% during April-  May 2012-13.

Similarly, Steel and Cement sectors having weight of 6.68% and 2.41% in IIP index, registered growth of 4.1% and 3.0% in month under review against 3.8% and 15.4% growth in same month previous year. In cumulative terms, steel production Steel production was 3.0 % both during April to May 2013-14 and during April to May 2012-13. While, the growth of cement production was 5.6% in April-May, 2013-14 against 13.9% during the same period of previous fiscal.

On the flip side, crude oil, with weightage of 5.22% in index registered a negative growth of 2.4% in May, 2013 as compared to 0.5% growth in May, 2012. Cumulative growth of Crude Oil production during April-May 2013-14 was negative at 1.8% compared to de-growth of 0.4% during April-May 2012-13. Natural gas and fertilizer, having weight of 1.71% and 1.25% in IIP index, also registered negative growth of 18.7% and 2.0% in month under review against a de-growth of 10.7% and 15.1% in same month previous year. On cumulative basis, natural gas and fertilizer production during April-May 2013-14 was also negative at 18.1% and 2.2% compared to de-growth  of 11.0% and 12.4% during April-May 2012-13.

The CNX Nifty touched a high and low of 5,898.80 and 5,852.30 respectively. 

The top gainers on the Nifty were Ranbaxy up 6.81%, Lupin up 3.20%, GAIL up 2.31%, Bharti Airtel up 2.14% and BHEL up by 1.98%.

On the flip side, the top losers of the index were Jindal Steel down 4.29%, DLF down 3.01%, Axis Bank down 2.72%, Reliance Infra down 2.61% and Tata Power down by 2.31%.

The European markets were trading in red, France’s CAC 40 down by 0.66%, the United Kingdom’s FTSE 100 down by 0.49% and Germany’s DAX down by 0.97%.

Asian Markets concluded the trade mostly on negative note, as yesterday’s report of Chinese manufacturing data which weakened in June amid a credit crunch, weighed on the market sentiments. Japan’s Nikkei however touched its highest in nearly five weeks after encouraging manufacturing data in Europe and the United States helped cheer markets fretting about a slowing Chinese economy. The Bank of Japan’s closely watched ‘tankan’ survey, release showed sentiment among large manufacturers turned broadly positive in the April-June quarter for the first time in almost two years. The sentiment reading for large manufacturing enterprises rose to plus 4 from the previous quarters minus 8. A positive number indicates more firms reported favorable conditions than unfavorable conditions. On the economic front, a report from the Bank of Japan showed that the monetary base in Japan spiked 36% year-over-year in June, standing at 163.537 trillion yen. That follows the 31.6% surge in May.

In China, the Shanghai Composite Index gained over half a percent. Korean markets’ ended little changed as investors adopted a cautious approach ahead of second-quarter earnings, while the Hong Kong's market closed in negative terrain after dealers returned from a long weekend to fresh data indicating a slowdown in China’s economy.