Indian markets make gap-down opening on Wednesday

Prolonging their previous session’s southward journey, key domestic benchmarks have made a gap-down opening on Wednesday with both the frontline gauges tumbling about a percentage point in morning deals pressurized by weak global leads. The US markets extended their bearish run on Tuesday and ended modestly lower after a volatile day of trade. While, most of the Asian equity indices were trading lower as sentiment remained dampened after activity in China’s services sector stayed lacklustre in June as new orders grew at their weakest pace in more than four years, adding to signs of a slowdown in the world’s second-largest economy.

Back home, sentiments also got clobbered after Indian Rupee opened weak against US dollar. The currency was trading at 59.94/$, down 0.5% from yesterday’s close of 59.66/$. Some pressure also came in after selling was witnessed in stocks related to power sector on report that government may stop accepting fresh applications from power plants seeking coal supply for the next two years in view of acute coal shortage. Additionally, selling were also visible in public sector oil marketing companies viz. BPCL, HPCL and IOC after crude oil rallied above $100 a barrel for the first time in nine months on brewing political concerns in Egypt.

On the sectoral front, software witnessed the maximum gain in trade followed by healthcare and technology, while realty, metal and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was negative; there were 426 shares on the gaining side against 802 shares on the losing side while 52 shares remain unchanged.

The BSE Sensex opened at 19347.11; about 116 points lower compared to its previous closing of 19463.82, and has touched a high and a low of 19347.11 and 19238.89 respectively. The index is currently trading at 19278.88, down by 184.94 points or 0.95%. There were 4 stocks advancing against 26 declines on the index.

The overall market breadth has made a weak start with 33.23% stocks advancing against 62.56% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 1.03% and 0.64% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 0.70%, Health Care up by 0.51%, Teck up by 0.25% and FMCG up by 0.05%, while Realty down by 2.55%, Metal down by 2.35%, PSU down by 1.76%, Bankex down by 1.70% and Oil & Gas down by 1.45% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 1.23%, Hindustan Unilever up by 1.03%, Sun Pharma up by 0.44% and TCS up by 0.41%.

On the flip side, Hindalco Industries was down by 2.78%, Bharti Airtel was down by 2.71%, Tata Steel was down by 2.68%, SBI was down by 2.46% and Coal India was down by 2.05% were the top losers on the Sensex.

Meanwhile, Prime Minister's Economic Advisory Council (PMEAC) Chairman, C Rangarajan expects India's economic growth rate to be 6% plus levels in current fiscal and has estimated growth of 6.4%. He said that public sector investments would act as driver of economic growth in this fiscal.

To improve the economic situation, Rangarajan emphasized the need for added focus on the agriculture and power sectors. He maintained that India could record sound economic growth rates even at the reduced investment rates of 30%. He further said that “Investment rate of 30%” is still not low, though it is lower than 2007-08. But it is reasonably high rate. It gives us hope that if obstacles are removed, India can record higher growth rates in the short run.

The Reserve Bank of India has estimated the economy to grow at 5.7% in the current fiscal, while the Finance Ministry has forecast 6.1-6.7% growth. In 2012-13, the growth rate in the fourth quarter was 4.8% while the estimated rate was 5%.

The CNX Nifty opened at 5,811.95; about 45 points lower as compared to its previous closing of 5,857.55, and has touched a high and a low of 5,815.00 and 5,792.65 respectively.

The index is currently trading at 5,807.90, down by 49.65 points or 0.85%. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 2.22%, Lupin up by 1.91%, Infosys up by 1.36%, Hindustan Unilever up by 1.33% and HCL Technologies up by 1.19%.

On the flip side, JP Associate down by 4.76%, Bank of Baroda down by 3.36%, IDFC down by 3.33%, DLF down by 3.08% and Tata Steel down by 2.66% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 26.58 points or 1.32% to 1,979.98, Hang Seng contracted 386.27 points or 1.87% to 20,272.38, Jakarta Composite decreased 64.73 points or 1.37% to 4,663.97, Straits Times dropped 29.44 points or 0.93% to 3,143.88, KOSPI Composite shed 18.72 points or 1.01% to 1,836.30 and Taiwan Weighted was down by 93.99 points or 1.17% to 7,921.87.

On the flip side, KLSE Composite rose 2.36 points or 0.13% to 1,774.25 and Nikkei 225 was up by 9.87 points or 0.07% to 14,108.61.