Markets remain under pressure on profit booking

The Indian equity markets, which showed marginal recovery from a weak start, are trading lower again amid a fresh round of selling in stocks across the counters. The Nifty drifted further below 5900, while Sensex was in red. Investors were trading cautiously amid lack of cues that could drive significant movement. In currency markets, rupee appreciated against dollar on government’s statement that, it is committed to contain the fiscal deficit within target and it is addressing how to finance CAD. On sectoral front, information technology stocks were trading slightly weak following the rupee's recovery against the greenback. However, telecom stocks were buzzing in trade, ahead of the telecom commission meeting to take a call on 100% FDI in the sector. Moreover, powers stocks were reeling in red after global credit rating agency Moody’s Investors Service downgraded the outlook on India’s largest private power producer Tata Power Company (TPC) to negative from stable. Oil marketing companies have reacted positively to the diesel price hike. Realty, power, auto and capital goods stocks were trading higher, while healthcare and consumer durables stocks were finding fairly good support.

On the global front, following a positive opening on the back of a positive lead from Wall Street, Asian stock markets have shed gains and drifted down into negative territory as investors treaded cautiously at higher levels amid concerns about the Chinese economy. Back home, the market breadth was favoring negative trend; there were 917 shares on the gaining side against 974 shares on the losing side, while 115 shares remained unchanged.

The BSE Sensex is currently trading at 19,545.83, down by 31.56 points or 0.16% after trading in a range of 19,589.14 and 19,499.21. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02% and Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.50%, Health Care up by 0.70%, Metal up 0.42% and Oil & Gas up by 0.16%, while Realty down by 1.10%, Auto down by 0.73%, PSU down by 0.71%, Power down by 0.69% and Capital Goods down by 0.56% were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.69%, Sterlite Industries up by 2.36%, GAIL up by 2.15%, Hindalco up by 2.11% and Tata Steel up by 1.89%.

On the flip side, Coal India was down by 2.42%, Jindal Steel was down by 2.33%, Hero MotoCorp was down by 1.71%, Tata Motors was down by 1.59% and Tata Power was down by 1.47%  were the top losers on the Sensex.

Meanwhile, rising trade deficit with China has become a concern for India, as the India-China trade deficit increased by 34 percent to $12 billion in the first five months of the year and in last year it had touched $ 30 billion mark. India's overall share in Chinese exports has dropped to under 1 percent from 1.33 percent earlier. For the first five months, trade volume too declined by over $2 billion compared to last year.

India’s main items of exports like cotton, iron ore and copper continued their downward slide. In overall exports to China, cotton and copper declined y-o-y by 40 percent to $1.39 billion and 24 percent to $688.53 million, while Iron ore declined sharply by 76 percent to $595.42 million respectively. On the other hand, Chinese exports to India remained consistent, rising by 2.7 percent year-on-year.

However, the government is concerned over the declining India’s exports to China and has discussed the issue with China and had asked to provide more market access to Indian goods to arrest the widening trade deficit trend. India also demanded China to open up IT and Pharmaceutical sectors which will offer great potential for Indian products.   

Both the countries has set $100 billion trade target by 2015, however, it seems difficult to achieve unless China opens up to Indian products in a big way. The India-China bilateral trade touched $26.5 billion mark till May. In last year, bilateral trade fell to about $66.7 billion from around $74 billion in 2012.

The CNX Nifty is currently trading at 5,884.70 down by 14.15 points or 0.24% after trading in a range of 5,898.80 and 5,869.35. There were 17 stocks advancing against 33 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.60%, Lupin up by 2.54%, IDFC up by 2.05%, Sesa Goa up by 1.88% and Hindalco up by 1.86%.

On the flip side, DLF down by 2.80%, Coal India down by 2.67%, Jindal Steel down by 2.66%, Reliance Infra down by 2.13% and Hero MotoCorp down by 1.74% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng dipped 0.25%, Jakarta Composite declined 0.78%, KLSE Composite slipped 0.22%, KOSPI Composite was down by 0.04% and Taiwan Weighted was down by 0.25%.

On the flip side, Shanghai Composite up by 0.01%, Nikkei 225 rose 1.78%, Straits Times surged 1.22%.