Markets slip into negative territory; Sensex sinks sub 19800 level

Relinquishing all the early gains, barometer gauges have slipped in negative territory on account of accentuated selling pressure despite positive start of European counterparts. Slew of disappointing earnings are weighing on investors’ sentiment, with the latest one being Q1FY14 numbers of FMCG giant, HUL.  Trade took a turn for the worst ever after Punjab National Bank reported marginal 2%rise in net profit to Rs 1,275.32 crore for the first quarter ended June 30, 2013. Thus, trading near day’s lowest level, Sensex and Nifty, were gyrating below the crucial 19,800 and 5,900 levels respectively. Meanwhile, broader indices too were down and out in trade.

On the global front, Asian markets were mixed on Friday, with Tokyo taking a heavy hit as the dollar fell further against the yen after suffering a sell-off in New York. Meanwhile, European shares rose, heading for their longest stretch of weekly gains this year, as companies like LVMH Moet Hennessy Louis Vuitton SA, Kering SA reported faster quarterly sales growth.

Closer home, stocks from Metal, Banking and Public Sector Undertaking counters were the top laggards, while those from Information Technology, FMCG and Consumer Durables were the top gainers. Disappointing earnings from Punjab National Bank and Bank of India added to the pressure of banking pivotal. While, Bank of India lost 4% on reporting 9% growth in Q1FY14 net profit, Punjab National bank shares hit 4 years low due to rise in bad loans. Bank’s gross nonperforming assets (NPA) has gone up from 3.34% in the year-ago period to 4.84% at the end of three months period ended June 30, 2013. The market breadth was favouring the negative trend; there were 1199 shares on the losing side against 737 shares on the gaining side, while 149 shares remained unchanged.

The BSE Sensex is currently trading at 19774.15, down by 30.61 points or 0.15% after trading in a range of 19907.45 and 19758.14. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in red; BSE Mid cap and Smallcap indices were trading lower by 0.80% and 0.47% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.33%, FMCG up by 0.29%, Consumer Durables up by 0.26%, Oil & Gas up by 0.14% and Teck up by 0.06%, while Metal down by 2.40%, Bankex down by 1.71%, PSU down by 1.70%, Realty down by 1.02% and Power down by 0.46% were the top losers on the BSE.

The top gainers on the Sensex were ITC up by 2.41%, Hero MotoCorp up by 2.13%, Sun Pharma up by 2.02%, Mahindra & Mahindra up by 1.24% and Jindal Steel up by 1.07%. On the flip side, Coal India  was down by 5.60%, Hindalco was down by 4.06%, Maruti Suzuki was down by 3.45% , Hindustan Unilever was down by 3.07% and  Sterlite Industries was down by 2.99% were the top losers on the Sensex.

Meanwhile, chief Economic Adviser Raghuram Rajan said that all options to fund the country's record-high current account deficit are being considered. India's Current Account Deficit (CAD) stood at $18.1 billion, or 3.6% of the GDP in the March quarter, sharply lower from the historically high level of 6.7% seen in the December quarter. However, the current account gap for the full fiscal year ending in March 2013 widened $87.8 billion, which was 4.8% of GDP, compared with $78.2 billion or 4.2% of GDP, a year earlier.

Further, finance ministry's chief economic adviser defending Reserve Bank of India's move to manage volatility in the rupee, said that policy measures were geared in such a way that they would stabilise the weak rupee but do only 'minimal damage' to growth.

Notably, Raghuram’s comments came a day after State Bank of India chairman Pratip Chaudhuri opined that RBI to consider more transparent measures such as hiking interest rates in order to stabilise the domestic currency instead of simply tightening liquidity.

The RBI, in its latest attempt to shore-up the Indian currency, reduced the liquidity adjustment facility for each bank from 1% of total deposits to 0.5% and also asked banks to maintain higher average CRR (cash reserve ratio) of 99% of the requirement on daily basis as against earlier 70%.

The CNX Nifty is currently trading at 5,893.45 down by 14.05 points or 0.24% after trading in a range of 5,944.50 and 5,887.75. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were ITC up by 2.30%, Hero MotoCorp up by 2.21%, Sun Pharmaceuticals up by 1.94%, Ambuja Cements up by 1.52% and M&M up by 1.23%. On the flip side, Coal India down by 5.55%, PNB down by 5.43%, JP Associates down by 4.65%, Hindalco down by 4.11%, and Sesa Goa down by 3.72% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 0.45%, Straits Times down by 0.17 %, Jakarta Composite slipped 0.22%, KLSE Composite decreased 0.02%, Nikkei 225 tumbled 2.97% and Taiwan Weighted was down by 0.17%.  On the flip side, Hang Seng rose 0.28% and KOSPI Composite Index up by 0.06%.

European markets got off to a positive start; with CAC 40 gainning 0.68%, FTSE 100 adding 0.21% and DAX rising 0.31%.