Equity markets slip to intraday low; Sensex holds above 20,100 mark

Local equity markets have plunged to their intraday low on accelerated selling pressure after Prime Minister Manmohan Singh said India's economy may grow slower than previously expected 6.5 percent for the year to March 2014, which spooked investors’ sentiment, leading to heavy profit-booking. Broader indices too, surrendering to selling pressure have edged lower. Besides disappointing domestic tidings, negative start of European markets is also weighing on the sentiment.

On the global front, retreating from six-week highs on Friday, European markets were trading lower on account of disappointing results from some major US tech companies seen hurting sentiment, although the sell-off was likely to be limited.

Closer home, the downtrend of equity markets remains limited on account of splendid gains of index heavyweight, Reliance Industries, TCS and Bajaj Auto Stocks. TCS soared to new high after the company’s first quarter consolidated net profit rose higher-than-expected 16 percent year-on-year (6 percent quarter-on-quarter) to Rs 3,831 crore, helped by new deal wins and foreign exchange gain. While, Bajaj Auto surged 3% after the company reported 2.7% growth in net profit in the June quarter from the year earlier. Further, Reliance Industries was edging higher by half a percent before results.

On the BSE sectoral front, stocks from Information Technology, Auto and Fast Moving Consumer Goods counters were the major gainers on the index, while those from Power, Bankex and Capital Goods were the top laggards. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1081:919; while 137 shares remained unchanged.

The BSE Sensex is currently trading at 20159.76, up by 31.35 points or 0.16% after trading in a range of 20,238.89 and 20,150.52. The broader indices had surrendered to selling pressure; with BSE Mid cap and Small cap indices edging lower by 0.35% and 0.07% respectively.

The top gaining sectoral indices on the BSE were, IT up by 3.21%, TECk up by 2.38%, Auto up by 1.52%, Oil & Gas up by 0.43%, and FMCG up by 0.16%, while Power down by 2.01%, Bankex down by 1.89%, Capital Goods down by 1.82%, Realty down by 1.49% and Metal down by 0.94% were the top losers on the BSE.

Out of 30 shares on Sensex, 15 stocks were advancing and 15 declining. The top gainers were TCS up by 5.51%, Bajaj Auto up by 2.73%, Hero Moto Corp up by 2.70%, Infosys up by 1.93% and Tata Motors up by 1.86%. 

On the flip side, BHEL down by 7.25%, Jindal Steel was down by 3.97%, ICICI Bank down by 2.73% Sun Pharma down by 2.37% and Sterlite Industries down by 2.17% 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 6,034.50, down by 3.55 points or 0.06% after trading in a range of 6,066.85 and 6,033.40.

On Nifty, 18 stocks were advancing, while 32 stocks were on declining. BHEL down by 7.41%, Jindal Steel down by 4.18%, IndusInd bank down by 3.76% Axis Bank down by 3.05% and ICICI Bank down by 2.66% were the major losers on the index. On the flip side, the top gainers of the Nifty were TCS up by 5.76%, HCL Tech up by 5.25%, Bajaj Auto up by 2.79%, Hero MotoCorp up by 2.60% and Tata Motors up by 2.00%.

Most of the Asian equity indices were trading in red; Shanghai Composite plunged 1.37%, Hang Seng decreased by 0.09%, Nikkei 225 declined 1.48%, Straits Times dipped 0.27%, Seoul Composite was down by 0.22% and Taiwan Weighted was down by 1.62%.

On the flip side, Jakarta Composite jumped 0.27% and KLSE Composite added 0.42%.

European markets got off to a negative start; with CAC 40 declining 0.41%, DAX sliding by 0.52%  and FTSE 100 losing 0.21%.