Markets extend southward journey for fourth consecutive day

Monday turned out to be a daunting session of trade for the Indian stock markets, which extended the southbound journey for fourth consecutive day and gave up another around half a percent as investors opted to remain on sidelines ahead of Reserve Bank of India’s (RBI) policy announcements tomorrow. Sentiments remained sluggish since morning tracking weakness in Indian rupee due to month-end dollar demand from importers. As the trade progressed, some recovery was seen in the markets after Finance Minister P. Chidambaram stated that he does not expect RBI’s recent liquidity steps to lead to increase in bank lending rates, notably a day ahead of RBI’s monetary policy review. Further, soothing some jittery nerves, FM added that India is still the second fastest growing economy and expressed hope of achieving six per cent growth this fiscal.

Positive opening in European markets though supported the local indices to some extent. CAC and DAX traded firmly during the early deals ahead of central bank meetings in the UK, the US and in Brussels this week. However, disappointing cues from Asian markets took their toll on Indian markets and dragged the frontline gauges below their crucial 5,850 (Nifty) and 19,600 (Sensex) levels. Asian equities ended the session mostly in the red amid lingering growth worries after official data released over the weekend showed profits at Chinese industrial firms slowed in June. Investors also remained cautious ahead of the Federal Reserve, the European Central Bank and the Bank of England meet later this week.

Back home, sentiments also remained dampened after Chidambaram said that Gold imports, despite government’s attempts to bring down the demand, rose in July from 31.5 tonnes shipped in June. Sentiments also got clobbered on report that overseas investors have pulled out nearly Rs 18,500 crore from the Indian capital markets so far this month, amid concerns over the depreciating rupee.

Some disappointment also came in from corporate earning front where banking stocks like Indian Bank reported 32% fall in Q1FY14 net profit at Rs 317.39 crore, while Syndicate Bank registered marginal rise in first quarter net profit at Rs 452.28 crore. Additionally, IDFC stocks too declined over 4% even as the company reported 46.74% rise in its consolidated net profit at Rs 557.31 crore for the quarter ended June 30, 2013. Bucking the trend, investors continued to pile up positions in software and technology counters on the back of depreciating rupee. The rupee was trading at Rs 59.40 per dollar at the time of equity markets closing as compared with previous close of Rs 59.04 against the dollar.

The NSE’s 50-share broadly followed index Nifty declined by over fifty points to end below the psychological 5,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by over one hundred and fifty points to finish below the psychological 19,600 mark.

Moreover, broader markets witnessed selling and ended the session with a cut of about a percentage point. The market breadth remained in favor of decliners, as there were 830 shares on the gaining side against 1,400 shares on the losing side, while 151 shares remained unchanged.

Finally, the BSE Sensex lost 154.91 points or 0.78% to settle at 19,593.28, while the CNX Nifty declined by 54.55 points or 0.93% to end at 5,831.65.

The BSE Sensex touched a high and a low of 19,751.03 and 19,570.87, respectively. The BSE Mid cap index was down by 1.31% and Small cap index was down by 0.86%.

The top gainers on the Sensex were, Wipro up by 6.71%, Jindal Steel up 4.89%, Tata Motors up 2.14%, Sun Pharma up 1.91% and Hero MotoCorp up by 0.49%, while Hindalco down by 4.03%, Hindustan Unilever down 3.71%, Sterlite Industries down 3.66%, Dr Reddys Lab down 3.53% and Coal India down by 3.19% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, IT up 0.77%, Auto down 0.36% and TECk up 0.15%, while FMCG down 2.67%, PSU down 1.80%, Metal down 1.80%, Realty down 1.65% and Bankex down 1.20% were the top losers on the sectoral space.

Meanwhile, Finance Minister P Chidambaram said that India has continued to be the second fastest growing economy in the world after China. While addressing a bank function, Chidambaram expressed hope of achieving six per cent growth this fiscal and said that Indian people should not be worried about the current economic slowdown and should take bank loans to invest in the farm, small industries and housing sectors etc. 

Expressing confidence on Indian economic recovery, Finance Minister said that the government has planned to open 8,000 new bank branches this year, which would create 50,000 jobs in the country and would also help the economy growth. He also suggested that women should form more self-help groups and obtain loans boldly to start new ventures.

Chidambaram said that presently global economic growth has slowed down therefore India cannot remain unaffected. Indian economic growth fell to decade low of 5 percent for the 2012-13 fiscal on account of poor performance of farm, manufacturing and mining sectors.

Referring to the petroleum product prices, he said that the prices have been going up due to the high price of crude oil touching $108 for a barrel, adding that the price of petrol and diesel would show a declining trend only if crude dropped below $100 a barrel. Presently, India imports over 70 per cent of its oil demand, meanwhile the efforts are on to explore crude and gas in the country.

The CNX Nifty touched a high and low of 5,886.00 and 5,825.80 respectively. 

The top gainers on the Nifty were Jindal Steel up 4.76%, Tata Motors up 2.09%, Ultra Tech Cement up 1.35%, Grasim up 1.16% and Asian Paints up by 1.03%.

On the flip side, the top losers of the index were, IDFC down 4.79%, JP Associates down 4.44%, Hindalco down 4.24%, Ambuja Cement down 4.07% and Sesa Goa down by 3.96%.

The European markets were trading mixed, France’s CAC 40 up by 0.37%, the United Kingdom’s FTSE 100 down by 0.13% and Germany’s DAX up by 0.28%.

The Asian markets barring Singapore’s Strait Times which was marginally up, concluded Monday’s trade mostly in red. Japanese Nikkei tumbled more than 3% ending at their lowest level in more than a month below the 14,000 line due to the yen’s climb against US dollar and expectation of a series of economic data due to be released this week. Meanwhile, official data released showed Japan’s retail sales climbed 1.6% in June from the year-ago month, though just short of forecasts. Japanese retailers registered a sharp rebound in June sales, which rose 1.6% from a year earlier, compared to May's 0.8% gain. The result was slightly below average expectations for a 1.9% gain.

China’s Shanghai Composite plunged the most in three weeks, sending the key index to a fourth straight day of decline, after China’s top auditor announced a nationwide audit of government debt. Market sentiment was also hit by dismal data showing industrial profits in China rose at a slower pace in June, while a continuous increase in borrowing costs reignited fears over a liquidity squeeze. China’s building materials sector regained steam in the first half, with real estate investment picking up speed.

Indonesia has likely turned the corner on a ballooning current account deficit, with the figure set to narrow in the current quarter after strong imports and a slump in exports widened it in the year’s second quarter, the central bank stated. Bank Indonesia added that the deficit probably widened to $8 billion, or 3.5% of the country’s gross domestic product, in the April-June period, from $5.3 billion, or 2.4% of GDP, in the prior three months. Total exports in the first five months of the year contracted 6.5%, the Central Statistics Agency (BSP) stated, while imports contracted 1.2%.