Weakness persist in markets; Sensex holds 19700 level

Indian equity markets continued reeling under pressure due to the sudden jolt received by the RBI policies however, markets held their nerves to accumulate and take support at lower levels in the late morning session on Tuesday. The Nifty was still below 5950 level, while Sensex was down by 261.25 points. Investors were trading cautiously on worries about a growth slowdown following the Reserve Bank of India's move to squeeze liquidity. In currency market, rupee appreciated against greenback on fresh dollar selling by exporters as RBI has increased the marginal standing facility (MSF) rate and bank rate each by 200 basis points to 10.25%, reduced the amount up to which banks can borrow or lend under its daily liquidity window and declared a sale of government securities via an open market operation. On sectoral front, all rate sensitive stocks were trading lower on central banks measures. Banking and Realty were the major losers while Capital goods, metal and automobile stocks were the other prominent losers. Healthcare and information technology stocks were finding some support after a subdued start. A few stocks from FMCG and oil sectors were trading firm. On the global front, most Asian stocks were trading in green, taking their cue from US stocks after weaker-than-forecast US retail sales growth backed the view that the Federal Reserve will hold off reducing its bond-buying stimulus anytime soon. Back home, the market breadth was favoring negative trend; there were 1202 shares on the losing side against 642 shares on the gaining side, while 98 shares remained unchanged.

The BSE Sensex is currently trading at 19,773.23, down by 261.25 points or 1.30% after trading in a range of 19811.47 and 19649.58. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.27% and Small cap index was down by 0.84%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.52%, Oil & Gas up by 0.31%, IT up by 0.20%, Health Care up by 0.07% and TECk up by 0.02%, while Realty down by 5.42%, Bankex down by 4.55%, Capital Goods down by 2.40%, Metal down by 1.96% and Auto down by 1.39% were the top losers on the losers on the BSE.

The top gainers on the Sensex were ONGC up by 2.30%, Sun Pharma up by 1.60%, ITC up by 0.98%, TCS up by 0.74% and Hindustan Unilever up by 0.66%. On the flip side, ICICI Bank was down by 5.44%, SBI was down by 4.70%, HDFC was down by 4.29%, L&T was down by 3.51% and Sterlite Industries was down by 3.45% were the top losers on the Sensex.

Meanwhile, expressing hopes that Indian economy will pick up pace in coming quarters, Planning Commission Deputy Chairman Montek Singh Ahluwalia is expecting a better economic growth in current year, as compared to last year’s 5 percent growth. India’s growth rate declined to 5 percent, a decade low, in 2012-13 on account of global economic slowdown as well as domestic factors. Ahluwalia said that the nation is expected to see a normal growth process as euro zone will move towards positive growth by 2014.

By adding further he said the country is likely to grow, if not 8 percent then the best is at something about 7 percent, however, the 8 percent is also achievable as it is a long term projection. Though, there has been no change in official estimates of economic growth projection for 2013-14 so far, which was 6.5 percent factored by Finance Minister while presenting budget. The government in its efforts formed the Cabinet Committee of Investment (CCI) to tackle the domestic supply side problems which are impacting Indian economy.

Earlier in April this year, Ahluwalia had said that India can grow by 6.5 percent in the current fiscal during which big projects are likely to get clearances from CCI and the decision to set up CCI would have a big impact on the economic growth in the current fiscal. He added that nation’s economy will begin to see the turnaround in coming two - three quarters as the government has taken a number of measures recently to revive investment, including the setting up of CCI.

The CNX Nifty is currently trading at 5,938.25 down by 92.255 points or 1.53% after trading in a range of 5,954.00 and 5,910.95. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were ONGC up by 2.41%, BPCL up by 2.38%, Sun Pharmaceuticals up by 1.43%, Ambuja Cement up by 1.02% and TCS up by 0.80%. On the flip side, IDFC down by 7.69%, DLF down by 7.66%, IndusInd Bank down by 6.67%, JP Associates down by 6.60% and PNB down by 5.56% were the major losers on the index.

Most Asian equity indices were trading in green; Straits Times slipped 0.27% and Seoul Composite decreased 0.47%. On the flip side, Shanghai Composite up by 0.03%, Hang Seng up 0.13%, Jakarta Composite rose 0.29%, KLSE Composite increased 0.02%, Nikkei 225 was up by 0.59% and Taiwan Weighted was up by 0.07%.