Markets pare early gains; Nifty slips below 6050 mark

Indian equity markets pared early gains in the late morning session on Friday due to some profit taking in several front line stocks. Despite of a positive start the markets seemed subdued and eventually gave up their opening gains trading around the neutral line. Markets remained volatile as key companies are busy announcing April-June quarter earnings. The Nifty slips below 6050 and was down by 1.80 points, while Sensex was up by 56.11. Meanwhile, investors’ remained cautious on Prime Minister Manmohan Singh’s statement that, 'The Indian economy is going through a difficult period and is likely to grow slower than previously expected 6.5% for the year ending March 2014.' He also said the UPA government will unveil more reforms for foreign direct investment (FDI), but he gave no details. In currency markets, rupee has started discounting the RBI measures and reacting to FII pullout and other global factors. On sectoral front, IT stocks continued trading firm on the back of strong results from Tata Consultancy Services, while auto stocks were remained positive, as Bajaj Auto's met analysts' forecast on all parameters with the first quarter net profit growing 2.8 percent year-on-year to Rs 738 crore. However, power, capital goods and realty stocks were trading weak.

On the global front, Asian markets were trading weak reacting to Google and Microsoft's numbers that came below expectations hence sending technology stocks lower. Sentiments soured after Detroit filed for the largest ever bankruptcy in US history with a debt of USD 18.5 billion. Back home, the market breadth was favoring negative trend; there were 986 shares on the losing side against 860 shares on the gaining side, while 124 shares remained unchanged.

The BSE Sensex is currently trading at 20,184.52, up by 56.11 points or 0.28% after trading in a range of 20,238.89 and 20,150.52. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was down by 0.31% and Small cap index fell by 0.02%.

The top gaining sectoral indices on the BSE were, IT up by 3.04%, TECk up by 2.11%, Auto up by 1.19%, Oil & Gas up by 0.46%, and FMCG up by 0.29%, while Power down by 1.79%, Capital Goods down by 1.54%, Bankex down by 1.49%, Realty down by 1.29% and Consumer Durables down by 0.75% were the top losers on the BSE.

The top gainers on the Sensex were TCS up by 5.42%, Infosys up by 1.94%, Tata Motors up by 1.86%, Hindustan Unilever up by 1.63% and Coal India up by 1.61%.  On the flip side, BHEL was down by 6.14%, Jindal Steel was down by 3.79%, Sun Pharma was down by 2.59%, ICICI Bank was down by 2.26% and NTPC was down by 2.15% were the top losers on the Sensex.

Meanwhile, in a bid to boost trade, Indian exporters urged government to take some measures including providing sops, bringing down transaction costs and implementing flexible labour laws. In a recent time, the exports have been hampered on account of weakness in Indian rupee and demand in key western markets like the US and Europe was already hit badly.

The association has appealed to Prime Minister Manmohan Singh to intervene in the on-going rupee volatility, in order to re-motivate Micro, Small and Medium Enterprises (MSMEs) business particularly the export related segment, especially, at a time when the rupee has been falling. Further, if India has to compete with the rest of the world, the government must amend the labour laws according to today’s economic scenario.

Exports declined by 1.41 percent to $72.45 billion in Q1FY14 as against the same period last year. However, imports during the period were up by 5.99 percent at $122.6 billion for the same period. Meanwhile, the country’s exports in 2012-13 declined 1.76 percent to $300.6 billion mainly on account of slowdown in the global economy. In 2012-13, India’s trade deficit had touched an all time high of $190.91 billion compared to $183.4 in the previous fiscal.

The rupee is continuously losing its sheen, declining 33 paise to 59.67 against dollar for the second day, after Fed’s comments strengthened the US currency and RBI could drain only a fifth of its Rs 12,000-crore target in an auction to curb liquidity.

The CNX Nifty is currently trading at 6,036.25 down by 1.80 points or 0.03% after trading in a range of 6,066.85 and 6,033.40. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were TCS up by 5.52%, HCL Tech up by 4.61%, Tata Motors up by 2.16%, HUL up by 2.01% and Infosys up by 1.87%. On the flip side, BHEL down by 6.33%, Jindal Steel down by 3.65%, Axis Bank down by 2.77%, Sun Pharma down by 2.77% and Indusind Bank down by 2.58% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite down by 0.99%, Hang Seng decreased by 0.12%, Nikkei 225 declined 1.48%, Straits Times dipped 0.22%, Seoul Composite was down by 0.22% and Taiwan Weighted was down by 1.62%.

On the flip side, Jakarta Composite jumped 0.25% and KLSE Composite added 0.39%,