Benchmarks pare gains despite a gap-up start

Indian equity indices after a positive opening pared most of their gains to trade mixed in Friday’s morning deals, weighed down by losses in power, realty, metal and auto sectors. Markets made a firm start on reports that Indian government has further relaxed foreign direct investment norms in the retail sector to attract overseas investments. Meanwhile, supportive cues from US markets provided the much needed support to local markets initially and sentiments remained up-beat on some better than expected economic announcements. Rally in Asian markets too boosted the traders’ moral with Japanese Nikkei surging over one and a half percent as weakening yen buoyed sentiment, lifting exporters like auto makers and electronics manufactures.

Back home, the Cabinet headed by Prime Minister Manmohan Singh diluted the mandatory 30 percent local sourcing norms for multi-brand retailers and permitted states to include cities with population less than 1 million for allowing multi-brand retailing. However, gains remained capped as investors turned jittery on Reserve Bank of India (RBI) governor D Subbarao’s statement that maintaining a stable exchange rate is important for growth, last day the central bank has further tightened norms for hedging rules for foreign institutional investors. Meanwhile, Financial Tech has extended the losses and has dropped by over 30%. National Spot Exchange Ltd (NSEL), a group firm, suspended trading in all contracts except ‘e-series’ until further notice, shares of Financial Technologies (FT) and Multi-Commodity Exchange (MCX) on Thursday tanked on the BSE and continued the same trend on Friday.

On the sectoral front, consumer durables witnessed the maximum gain in trade followed by software and technology, while metal, power and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices were struggling to get some traction, while the market breadth on the BSE was negative; there were 477 shares on the gaining side against 691 shares on the losing side while 45 shares remain unchanged.

The BSE Sensex opened at 19399.55; about 82 points higher compared to its previous closing of 19317.19, and has touched a high and a low of 19451.70 and 19328.18 respectively. The index is currently trading at 19369.51, up by 52.32 points or 0.27%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a weak start with 39.16% stocks advancing against 57.20% declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.31% and 0.32% respectively. 

The few gaining sectoral indices on the BSE were, Consumer Durables up by 3.43%, IT up by 1.32%, Teck up by 1.00%, Oil & Gas up by 0.83% and Realty up by 0.31%, while Metal down by 2.21%, Power down by 2.11%, PSU down by 1.33%, Bankex down by 0.35% and Auto down by 0.30% were the top losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 2.59%, RIL up by 1.61%, Infosys up by 1.23%, ITC up by 1.20% and TCS up by 1.13%. On the flip side, Jindal Steel was down by 7.07%, Coal India was down by 3.20%, Hindalco Industries was down by 2.17%,  Tata Power was down by 1.94% and Dr Reddys Lab was down by 1.73% were the top losers on the Sensex.

Meanwhile, retail inflation for industrial workers increased in June due to rise in prices of food items, cigarette, electricity charges, doctor's fee, medicines and petrol. The year-on-year inflation measured by monthly Consumer Price Index-Industrial Workers (CPI-IW) stood at 11.06 per cent for June, 2013 as compared to 10.68 per cent for the previous month and 10.05 per cent during the corresponding month of the previous year. For the period of May and June, the retail inflation for industrial workers increased by 1.32 per cent as compared to 0.97 per cent in the same period of previous year.

The largest upward pressure to the change in current index came from food group contributing 2.98 percentage points to the total change. Food inflation in June stood at 14.86 per cent against 13.24 per cent of the previous month and 10.45 per cent during the corresponding month of the previous year. However, the prices of wheat, groundnut oil and mustard oil decline in the month under review.

On city wise, Pune, Bhilai and Guntur centres recorded the highest increase of 8 points each in index followed by Jalpaiguri, Asansol, Mumbai, Bokaro, Siliguri, Kanpur (7 points each) and Warangal and Vijaywada (6 points each). On the contrary, a decline of 1 point each was recorded in Amritsar and Coimbatore centres. The indices of 39 centres are above All-India Index and other 38 centres’ indices are below the national average.

The CNX Nifty opened at 5,750.05; about 23 points higher as compared to its previous closing of 5,727.85, and has touched a high and a low of 5,761.85 and 5,722.65 respectively.

The index is currently trading at 5,726.50, down by 1.35 points or 0.02 %. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were ACC up by 3.46%, Ambuja Cements up by 3.43%, Ranbaxy up by 2.55%, Lupin up by 2.08% and Cairn up by 2.00%. On the flip side, Power Grid down by 13.17%, Jindal Steel down by 7.66%, Bank of Baroda down by 3.89%, Coal India down by 3.24% and Hindalco Industries down by 2.63% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite rose 11.13 points or 0.55% to 2,040.19, Hang Seng increased 123.83 points or 0.56% to 22,212.62, Jakarta Composite jumped 3.92 points or 0.08% to 4,628.26, KLSE Composite strengthened 3.67 points or 0.21% to 1,781.49, Nikkei 225 surged 223.11 points or 1.59% to 14,228.88, Straits Times improved 11.59 points or 0.36% to 3,254.88, Seoul Composite grew 5.03 points or 0.26% to 1,925.77 and Taiwan Weighted was up by 44.55 points or 0.55% to 8,100.77.