Benchmarks drift lower in mid-morning session

Indian benchmarks have extended losses for fourth straight session, hitting fresh intraday low in late morning trade, as sentiment turned negative following weakness in the Asian markets and as investors chose to remain on sidelines ahead of the Reserve Bank of India's policy review meet tomorrow. There are concerns that the central bank, after the recent short term measures, may hike interest rates to support the rupee from depreciating against the dollar. On the global front, 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. Back home, traders were seen piling up positions in IT, Teck and Auto, while selling was seen in FMCG, PSU and Banking sector. Telecom stocks such as Idea Cellular, Bharti Airtel and MTNL edged higher as the government has received Rs 1,770-crore investment proposal from a domestic company for the manufacturing of telecom products. Aviation stocks like Jet Airways and Spicejet were trading in green as the government will take a call on the largest FDI in civil aviation.

Meanwhile, the NSE Nifty and BSE Sensex were trading near the psychological 5,850 and 19,600 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in the ratio of 565:968. The BSE Sensex is currently trading at 19671.05, down by 77.14 points or 0.39% after trading in a range of 19751.03 and 19649.18. There were 13 stocks advancing against 17 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.90% and Small cap index lost 0.63%.

The top gaining sectoral indices on the BSE were, IT up by 0.87%, Teck up by 0.84% and Auto up by 0.30%, while FMCG down by 2.72%, PSU down by 0.72%,  Bankex down by 0.67%, Realty down by 0.66% and Capital Goods down by 0.65%were the losers on the BSE.

The top gainers on the Sensex were Wipro up by 7.01%, Bharti Airtel up by 2.27%, Jindal Steel up by 2.08%, Tata Steel by 1.96% and Tata Motors up by 1.43%. On the flip side, Hindustan Unilever was down by 5.10%, ITC was down by 2.66%, Hindalco Industries was down by 2.60%, Maruti Suzuki was down by 2.20% and Sterlite Industries was down by 2.15% were the top losers on the Sensex.

Meanwhile, both domestic and overseas investments have taken a hit on account of interest rates and widespread corruptions in the general administration, according to the chief of a leading industry chamber, Federation of Indian Chambers of Commerce and Industry’s (FICCI) president Naina Lal Kidwai. She has underscored that lackluster investments and slowing industrial growth are already weighing on employment situation, with Job generation turning out to be biggest concern for the country, given the addition of 10-12 million new workers every year to the workforce.

Taking a note of Centre for Monitoring Indian Economy (CMIE)’s data, Kidwai highlighted that investments in new projects during the quarter ended June 30, 2013 were way lower than what was registered in the corresponding quarter of the last year.  Total investments in new projects in India plunged by 65.20% to Rs 77,463.4 crore in April-June quarter as compared to Rs 222,659.8 crore recorded during the corresponding quarter of last year, according to data compiled by CMIE.

Further, Kidwai has urged RBI to take into account the sluggishness in industrial growth while deciding on policy rates. 'Any increase in interest rates at this juncture will be a major blow to the industry and overall growth,' she said. These comments assume significance as they come ahead of RBI’s monetary policy review. 

Leading industrialists and representatives of business chambers, including Kidwai, are scheduled to meet Manmohan Singh at his official 7, Race Course Road residence to deliberate upon the issues plaguing the country's economy.

The CNX Nifty is currently trading at 5,853.20 down by 33.00 points or 0.56% after trading in a range of 5,886.00 and 5,850.60. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.19%,  Jindal Steel up by 2.13%, Tata Steel up by 1.71% ,Tata Motors up by 1.40%, and NTPC up by 0.78%. On the flip side, Hindustan Unilever down by 4.96%, JP Associate down by 4.32%, Ambuja Cement down by 4.04%, Ranbaxy down by 3.14% and Kotak Bank down by 293% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined by 26.19  points or 1.30% to 1,984.66, Hang Seng dropped 146.99 points or 0.67% to 21,821.96, 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 7.71 points or 0.23% to 3,228.29, Seoul Composite decreased 9.20 points or 0.48% to 1,901.61  and Taiwan Weighted was down by 59.42 points or 0.73% to 8,089.98.