Benchmarks off day’s low; Sensex reclaims 19,400 bastion

Paring substantial losses, Indian equity markets are trading off day’s low, with Nifty on the verge of breaking out in green, as investors initiated some bargain-buying at lower levels. Drawing cues from positive global set-up, benchmark indexes, Sensex and Nifty, albeit nursing marginal losses, reclaimed the crucial 19,400 and 5,850 bastions respectively. Meanwhile, broader indices, largely outperforming their larger peers, have gained additional traction.

On the global front, Consumer-focused stocks led European shares higher early on Wednesday after a bullish update from Burberry and analyst upgrades for the likes of Tesco. Burberry rallied 5.7 percent after the luxury goods brand maintained its full-year guidance as it posted an 18 percent rise in first quarter underlying retail revenue.

Closer home, the trend at D-street turned bearish in early deals after International Monetary Fund (IMF), late on Tuesday lowered India’s growth forecast for 2013-14 to 5.6% from the 5.8% it projected in April, holding that the risks of a longer downturn in emerging market economies had increased because of domestic capacity constraints, slowing credit growth and weak external demand. Further, traders were wary of opening any fresh bets ahead of release of key economic data of IIP and the quarterly results from Infosys. On the other side, RBI’s increasing measures to prevent further deprecation of Indian currency provided some solace to investors. In a bid to support the declining domestic currency, central bank asked state-run oil companies to purchase dollars from a single bank.

On the BSE sectoral front, massive losses in stocks from Fast Moving Consumer Goods, Auto and Metal counters were counterbalancing modest gains in select stocks those belonging from Consumer Durable, Health Care and Bankex space.  Meanwhile, Steel stocks edged lower, with Tata Steel hitting 52-week low. The growth strategy endorsed at the meeting headed by Prime Minister on Tuesday, 9 July 2013 aims at the production of 300 million tons of steel by the middle of the next decade. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1103:901; while 127 shares remained unchanged.

The BSE Sensex is currently trading at 19413.28, down by 26.20 points or 0.13% after trading in a range of 19505.93 and 19381.90.  The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.14% and 0.17% respectively.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.82%, Health Care up by 0.75%, Bankex up by 0.46%, IT up by 0.45% and TECk up by 0.25%, while FMCG down by 0.69%, Auto down by 0.65%, Metal down by 0.37%, Realty down by 0.28% and Oil & Gas down by 0.23% were the top losers on the losers on the BSE.

18 stocks were on declining side, while 12 were advancing on the Sensex. The top gainers on the Sensex were Tata Power up by 1.58%, Sun Pharma up by 1.20%, Jindal Steel up by 0.90%, SBI up by 0.88% and Wipro up by 0.86%. On the flip side, HUL down by 1.66%, Tata Motors down by 2.09%, Tata Steel down by 1.28%, ONGC down by 0.74% and M&M down by 0.72% were the top losers on the Sensex.

Meanwhile, in a bid to enhance the share of manufacturing in the country’s GDP, Prime Minister Manmohan Singh has said that India needs to focus on the manufacturing over the next decade to achieve economy’s potential growth rate of 8-9 percent in the future. During the meeting of the high-level committee on manufacturing, Manmohan Singh said that the country’s economy is witnessing shift in its structure as agriculture sector, which continues to account for more than 50 percent of population, today represents less than 15 percent of GDP, therefore, there is a need to develop manufacturing sector, particularly labour-intensive manufacturing to pick up the economy’s growth.

Prime Minister further stated that there are certain manufacturing sectors which have done well over the last 20 years, like automobiles and pharmaceuticals among others, but, we did not leverage our strengths both in traditional industries and in emerging sectors and the country’s manufacturing production is at lower end of the value chain and hardly have any manufacturing capabilities in electronics and telecommunications sectors.

Manmohan Singh expressed the need to remove bottlenecks that hinder progress of manufacturing sector. Prime Minister will meet industry leaders on 29 July to discuss ways to enhance the Indian industry output. Though, the government has been taking all possible measures to boost the manufacturing growth and has already introduced a National Manufacturing Policy that seeks to take the share of manufacturing to 25% of GDP in the next 10 years from around 14% now. 

The CNX Nifty is currently trading at 5,856.95, down by 2.05 points or 0.03% after trading in a range of 5,879.35 and 5,847.25.

Out of the 50 shares index, 26 stocks were on declining side, while 23 stocks were advancing. The top gainers of the Nifty were Lupin up by 3.02%, Kotak Bank up by 2.35%, NMDC up by 2.14%, Utra Tech Cement up by 1.90% and Tata Power up by 1.58%. On the flip side, HUL down by 1.72%, BPCL down by 1.62%, Tata Steel down by 1.59%, Tata Motors down by 1.59% and Cairn India down by 1.17% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 1.79%, Hang Seng increased 0.76%, Jakarta Composite added 1.20%, Straits Times was up by 0.47%, Taiwan Weighted was up by 0.51% and KLSE Composite was up by 0.51%.

On the flip side, Nikkei 225 was down by 0.39% and KOSPI Composite was down by 0.34%.

European shares  opened to a positive start; with CAC 40 gaining 0.13%, DAX rising 0.07% and FTSE 100 adding 0.15%.