Feeble global cues drag markets lower in early deals

Pressurized by weak global cues, Indian equity indices have made a negative start in Monday’s morning deals with Sensex declining below its crucial 19,700 level. Investors opted to remain on sidelines ahead of Reserve Bank of India’s policy announcements scheduled tomorrow. Global cues too remained sluggish with all the Asian equity indices were trading in the red at this point of time with Japanese Nikkei tumbling over two percent as the yen hit a one-month high against a dollar hamstrung by expectations of dovish comments from the US Federal Reserve after a policy review this week. Sentiments also remained dampened amid lingering growth worries after official data released over the weekend showed profits at Chinese industrial firms slowed in June. Though, US markets managed a flat but positive closing on Friday.

Back home, losses remained capped as some support came in from rally in telecom stocks viz. Idea Cellular, Bharti Airtel and MTNL as the government has received Rs 1,770-crore investment proposal from a domestic company for the manufacturing of telecom products. Meanwhile, Aviation stocks like Jet Airways and Spicejet too remained on the buyers’ radar as the government will take a call on the largest FDI in civil aviation. On the sectoral front, technology witnessed the maximum gain in trade followed by software and auto, while FMCG, banking and public sector undertaking 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 negative; there were 431 shares on the gaining side against 740 shares on the losing side while 45 shares remain unchanged.

The BSE Sensex opened at 19714.42; about 33 points lower compared to its previous closing of 19748.19, and has touched a high and a low of 19751.03 and 19657.11 respectively. The index is currently trading at 19669.67, down by 78.52 points or 0.40%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a weak start with 35.44% stocks advancing against 60.86% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 0.88% and 0.41% respectively. 

The top gaining sectoral indices on the BSE were, Teck up by 0.76%, IT up by 0.73%, Auto up by 0.28% and Oil & Gas up by 0.04%, while FMCG down by 2.90%, Bankex down by 0.91%, PSU down by 0.89%, Capital Goods down by 0.76% and Metal down by 0.61% were the top losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 7.21%, Sun Pharma up by 2.26%, Bharti Airtel up by 2.06%, Jindal Steel up by 1.76% and Tata Motors up by 1.36%. On the flip side, Hindustan Unilever was down by 5.28%, ITC was down by 2.73%, Hindalco Industries was down by 2.38%, Maruti Suzuki was down by 2.25% and Sterlite Industries was down by 1.70% 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 opened at 5,869.95; about 16 points lower as compared to its previous closing of 5,886.20, and has touched a high and a low of 5,886.00 and 5,858.30 respectively.

The index is currently trading at 5,858.50, down by 27.70 points or 0.47 %. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 2.13%, Bharti Airtel up by 2.12%, Tata Motors up by 1.43%, Tata Steel up by 1.14% and Sun Pharmaceuticals up by 1.06%. On the flip side, Hindustan Unilever down by 5.73%, JP Associate down by 4.44%, PNB down by 3.04%, ITC down by 2.76% and IDFC down by 2.50% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined 31.47 points or 1.57% to 1,979.38, Hang Seng dropped 125.35 points or 0.57% to 21,843.60, Jakarta Composite shed 65.75 points or 1.41% to 4,593.13, KLSE Composite slipped 6.58 points or 0.36% to 1,801.03, Nikkei 225 tumbled 332.34 points or 2.35% to 13,797.64, Straits Times dipped 11.62 points or 0.36% to 3,224.48, Seoul Composite decreased 6.09 points or 0.32% to 1,904.72 and Taiwan Weighted was down by 38.00 points or 0.47% to 8,111.40.