Feeble global cues, RBI measures drag benchmarks lower

Pressurized by global weakness and RBI measures, Indian equity markets made a negative start with frontline gauges tumbling below their psychological 20,250 (Sensex) and 6,050 (Nifty) levels, with banking stocks bearing most of the brunt. The US markets closed mostly lower overnight after a decline in a regional manufacturing gauge prompted concern, but the Dow industrials climbed to a record close. Asian markets too witnessed choppy trade in early deals with Chinese benchmark declining over a percentage point after China’s vast manufacturing sector slowed to an 11-month low in July as new orders faltered and the job market darkened, suggesting the world’s second-largest economy is still losing momentum.

Back home, investors opted to stay away piling up positions in risky assets as it being the penultimate day of July series F&O expiry. Selling in banking stocks hammered the sentiments. All the banking related stocks on BSE Bankex counter edged lower after the Reserve Bank of India (RBI) on July 23, 2013 announced more measures to squeeze liquidity from the banking system to stem rupees. Sentiments also remained dampened as selling witnessed in retail related stocks on the buzz that government may not change the FDI policy to suit any particular company.

On the sectoral front, software witnessed the maximum gain in trade followed by technology and healthcare, while banking, realty and capital goods 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 positive; there were 455 shares on the gaining side against 756 shares on the losing side while 55 shares remain unchanged.

The broader indices too were struggling to get some traction, while the market breadth on the BSE was negative; there were 447 shares on the gaining side against 754 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 20200.20; about 101 points lower compared to its previous closing of 20302.13, and has touched a high and a low of 20252.70 and 20164.67 respectively. The index is currently trading at 20217.89, down by 84.24 points or 0.41%. There were 15 stocks advancing against 15 declines on the index.

The overall market breadth has made a weak start with 35.59% stocks advancing against 60.03% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 0.84% and 0.29% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.12%, Teck up by 0.93%, Health Care up by 0.38%, Oil & Gas up by 0.36% and FMCG up by 0.29%, while Bankex down by 3.67%, Realty down by 2.61%, Capital Goods down by 1.42%, Auto down by 1.04% and Metal down by 0.89% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 1.50%, Sun Pharma up by 1.26%, Dr Reddys Lab up by 1.12%, Wipro up by 1.08% and Bharti Airtel up by 0.86%. On the flip side, ICICI Bank was down by 3.85%, SBI was down by 3.18%, Maruti Suzuki was down by 2.60%, Sterlite Industries was down by 2.13% and L&T was down by 1.96% were the top losers on the Sensex.

Meanwhile, buoyed by favourable monsoon condition, Indian economy will achieve a gross domestic product (GDP) growth of 6 per cent in financial year 2013-14, Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan said at an event in Tezpur University. Earlier this month, Rangarajan had said India’s economic growth rate is expected to be at least 6 percent in the 2013 -14 fiscal.

Further, Rangarajan said the government is also taking measures to control current account deficit. In this regard, the government is trying to curb demand of gold and petroleum products, which is the biggest constraint of the trade deficit. The government has further taken steps to minimise the imports of petroleum products by encouraging domestic production.

The economy grew at 4.8 percent in the fourth quarter of FY’13, while for the full year 2012-13, the economic growth was 5 percent, a decade low. Earlier, Reserve Bank of India has estimated the economy to grow at 5.7 percent in the current fiscal, while the Finance Ministry has forecast 6.1-6.7 percent growth.

The CNX Nifty opened at 6,032.20; about 45 points lower as compared to its previous closing of 6,077.80, and has touched a high and a low of 6,047.25 and 6,022.30 respectively.

The index is currently trading at 6,030.00, down by 47.80 points or 0.79%. There were 19 stocks advancing against 30 declines and one remains unchanged on the index.

The top gainers of the Nifty were TCS up by 1.67%, Sun Pharmaceuticals up by 1.31%, Dr. Reddy's Laboratories up by 1.14%, Bharti Airtel up by 0.97% and Lupin up by 0.91%. On the flip side, IndusInd Bank down by 7.81%, Axis Bank down by 6.11%, IDFC down by 6.03%, Kotak Bank down by 4.63% and Bank of Baroda down by 4.52% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 25.88 points or 1.27% to 2,018.00, Hang Seng slipped 62.00 points or 0.28% to 21,853.42, Jakarta Composite dropped 18.26 points or 0.38% to 4,748.90, Nikkei 225 decreased 82.80 points or 0.56% to 14,695.71 and Taiwan Weighted was down by 27.66 points or 0.34% to 8,182.35.

On the flip side, KLSE Composite rose 2.75 points or 0.15% to 1,808.06, Straits Times increased 6.02 points or 0.19% to 3,259.78 and Seoul Composite was up by 2.94 points or 0.15% to 1,907.09.