Benchmarks trade choppy in early deals on Monday

After witnessing eight consecutive days of fall, Indian equity indices are witnessing consolidation in Monday’s morning deals with frontline indices trading near their neutral line. Some support came in from FICCI's survey that India’s manufacturing sector is likely to witness a 'slight upturn' in the second quarter on the back of government’s efforts to remove bottlenecks by clearing large projects and a better export outlook. However, sentiments seemed to dampen as selling was witnessed in capital goods segment, led by state-owned Bharat Heavy Electricals (BHEL), which crashed around 11 percent on the BSE as it reported a dismal performance on every parameter as the first quarter standalone net profit halved to Rs 465.4 crore from Rs 920.9 crore in a year ago period.

On the global front, the US markets ended modestly higher in previous session on getting good jobs data, though the numbers were below the forecast but traders took heart with report of consumer spending acceleration. However, Asian equity indices were exhibiting mixed trend at this point of time with Japanese Nikkei declining by about a percent as yen traded near its strongest close in a month.

Back home, on the sectoral front, auto witnessed the maximum gains in trade followed by technology and healthcare, while capital goods, power and realty 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 524 shares on the gaining side against 671 shares on the losing side while 43 shares remain unchanged.

The BSE Sensex opened at 19178.06; about 14 points higher compared to its previous closing of 19164.02, and has touched a high and a low of 19233.28 and 19141.68 respectively. The index is currently trading at 19171.80, up by 7.78 points or 0.04%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a weak start with 42.33% stocks advancing against 54.20% declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.58% and 0.11% respectively. 

The few gaining sectoral indices on the BSE were, IT up by 3.43%, Auto up by 1.32%, Teck up by 1.00%, Health Care up by 0.83% and Oil & Gas up by 0.31%, while Capital Goods down by 2.14%, Power down by 1.36%, Realty down by 1.19%, Bankex down by 0.93% and PSU down by 0.52% were the top losers on the sectoral index.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.03%, NTPC up by 1.77%, Jindal Steel up by 1.52%, Coal India up by 1.16% and TCS up by 1.06%. On the flip side, BHEL was down by 10.81%, Gail India was down by 1.89%, Tata Power was down by 1.54%,  Cipla was down by 1.14% and Tata Steel was down by 1.13% were the top losers on the Sensex.

Meanwhile, Indian engineering exports fell by 7 percent in the April-June quarter in the current fiscal mainly due to the slowdown in the US and European Union markets. The chairman of Engineering Export Promotion Council (EEPC) Aman Chadha said that owing to the prevailing slowdown in the US and European countries, it has become imperative to search new markets for engineering exports. The US and Europe together account for around 60 per cent of the country’s total engineering exports. 

Disappointed over the Reserve Bank of India's decision of not undertaking rate cuts in its monetary policy, EEPC’s chairman said that we need to make Indian exports competitive in tough global markets where we face competition from aggressive exports from China and other emerging economies. Engineering goods exports which include exports of goods, transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners, constitute around one-fourth of the country's total merchandise shipments.

While, the government and the exporters are making renewed efforts to diversify and explore new markets, also trying to increase share of exports in Latin America's Pacific Alliance which holds good prospects for Indian engineering products. Recently, domestic exporters have found new markets in Africa and Latin America, but remained cautious due to reasons such as fear of payment default. Meanwhile, in order to boost the country’s export, the government, in the annual foreign trade policy, had announced a slew of measures include sops for Special Economic Zones (SEZs) and extension of the popular the Export Promotion Capital Goods (EPCG) scheme to all sectors to boost shipments.     

The CNX Nifty opened at 5,682.40; about 4 points higher as compared to its previous closing of 5,677.90, and has touched a high and a low of 5,691.05 and 5,661.50 respectively.

The index is currently trading at 5,675.65, down by 2.25 points or 0.04 %. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 3.09%, Ambuja Cements up by 2.54%, M&M up by 2.08%, NTPC up by 1.85% and HCL Tech up by 1.62%. On the flip side, BHEL down by 11.10%, Asian Paints down by 2.78%, Bank of Baroda down by 2.65%, Jaiprakash Associates down by 2.53% and PNB down by 2.21% were the major losers on the index.

The Asian equity indices were trading in mixed; Shanghai Composite rose 3.02 points or 0.15% to 2,032.44, Hang Seng increased 35.99 points or 0.16% to 22,226.96, KLSE Composite added 2.56 points or 0.14% to 1,785.07 and Taiwan Weighted was up by 30.71 points or 0.38% to 8,130.59. 

On the flip side, Nikkei 225 declined 142.61 points or 0.99% to 14,323.55, Straits Times dropped 19.55 points or 0.60% to 3,234.58 and Seoul Composite was down by 4.47 points or 0.23% to 1,918.91.