Benchmarks substantially recover from early set-back

Putting up a fight-back, Indian equity market has substantially recovered from early set-back on account of bargain-buying. However, the underlying sentiment continues to remain subdued in absence of any positive trigger and amidst prevailing caution on whether RBI will take more steps to support the currency, as a strategy built on tightening rupee money markets and raising short-term interest rates has had limited effect. Additionally, negative European counterparts too may add to the pessimistic milieu. Off day’s low, Sensex and Nifty are trading above the crucial 18,600 and 5,500 mark respectively; meanwhile, broader indices outperforming larger peers are trading with gains of over half a percent. On the sectoral front, stocks from Fast Moving Consumer Goods, Auto and Capital Goods counters are the draggers, while those from Realty, Power and Metal counters are staging some resilience. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1181:655; while 41 shares remained unchanged.

The BSE Sensex is currently trading at 18689.80, down by 43.24 points or 0.23% after trading in a range of 18,771.77 and 18,551.35. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading up by 0.52% and 0.84% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 3.68%, Power up by 1.80%, Metal up by 1.78%, Oil and Gas up by 1.72% and PSU up by 1.69%. While, FMCG down by 1.06%, Auto down by 0.95%, Capital Goods down by 0.60%, IT down by 0.51% and Teck down by 0.06% were the top losers indices on the BSE.

The top gainers on the Sensex were Tata Power up by 4.06%, SBI up by 3.39%, Jindal Steel up by 2.89%, Tata Steel up by 2.82% and Sterlite Inds up by 2.80%. On the flip side, HDFC down by 2.90%, Tata Motors down by 2.47%, ITC down by 1.88%, L&T down by 1.55% and TCS down by 1.52% were the top losers on the Sensex.

Meanwhile, Chief Economic Advisor Raghuram G. Rajan has said that there is no magic wand to pull the country instantly out of challenges being faced by the economy. Rajan said that the prevailing economic slowdown has posed many challenges to Indian economy and the government and the Reserve Bank of India (RBI) are working together to address these challenges.

After the announcement of his appointment as the new RBI governor, Rajan said that he was looking forward to work with the many dedicated employees of the RBI and expressed hope to deal with the existing economic slowdown. Raghuram Rajan will be the 23rd Governor of the Reserve Bank and will succeed Duvvuri Subbarao who will leave office on September 4.

Rajan will take new RBI governor position at a time when the domestic economy is struggling with slowdown. All the macro-economic indicators have deteriorated with current account deficit (CAD) widened to a record high of 4.8 per cent of GDP in the previous fiscal and also rupee value depreciated to a record low of over 60 against the US dollar. Further, Indian economic growth also slowed down to decade low of 5 percent in the previous fiscal.

The CNX Nifty is currently trading at 5,530.90, down by 11.35 points or 0.20% after trading in a range of 5,553.90 and 5,486.85. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were JP Associate up by 7.07%, DLF up by 5.20%, BPCL up by 5.09%, Tata Power up by 3.99% and SBI up by 3.57%. On the flip side, Asian paints down by 3.41%, HDFC down by 2.93%, Grasim down by 2.52%, Axis Bank down by 2.15% and Tata Motors down by 2.12% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite down by 0.67%, Nikkei 225 was plunged 4%, Hang Seng down by 1.10%, Taiwan Weighted down by 1.46%, KLSE Composite down by 0.30% and Seoul Composite down by 1.48%. While, Jakarta Composite was up by 0.36% and Straits Times was up by 0.15%.

European markets have got off to a negative start; with CAC 40 declining by 0.30%, DAX sliding by 1.17% and FTSE 100 losing 0.23%.