Benchmarks off day's low on recovery in banking sector

Benchmarks pared losses in the late morning session on back of some buying witnessed in banking shares, however, sentiments remained dovish on concerns over depreciating rupee that hit a fresh life-time low today. The partially convertible rupee was trading at 63.92, down 79 paise, against its previous close of 63.13 on alleged intervention by the Reserve Bank of India. The sell-off in Asian markets on concerns over the US Federal Reserve's decision on bond programme was also hurting the Indian equities. The markets now await of minutes the US Federal meeting to get more clarity on the QE stimulus. That would be the next big trigger. Meanwhile there are fears of sovereign downgrade, weakness in rupee and equity markets . Risk appetite dampened after government imposed new restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the rupee, were also seen hampering an already slowing economy.

On the global front, Most of the Asian equity indices were trading in the red at this point of time as investors remained concerned that the Fed tapering its stimulus after last week's flurry of data. Indonesia’s stock market led the Asian decliners with over 5 percent drop as investors worried about the looming balance of payments crisis following Friday’s data showing a wider-than-anticipated current account deficit.Back home, traders were selling in Health Care, Auto and Consumer Durables on the BSE. Meanwhile, the benchmarks NSE Nifty and BSE Sensex were trading near the psychological 5,300 and 18,100 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in the ratio of 625:850.

The BSE Sensex is currently trading at 18160.34, down by 147.18 points or 0.80% after trading in a range of 18178.36 and 17970.98. There were 5 stocks advancing against 25 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.65% and Small cap index lost 0.19%.

There were no gaining sectoral indices on the BSE while Health Care down by 2.09%, Auto down by 2.07%, Consumer Durables down by 1.59%, Capital Goods down by 1.59% and Realty down by 0.96% were the top losers on the sectoral index.

The top gainers on the Sensex were ICICI Bank up by 0.97%, Jindal Steel up by 0.71%, Tata Power up by 0.40%, Infosys up by 0.22% and Sterlite Industries up by 0.20%. On the flip side, Sun Pharma was down by 4.37%, Mahindra & Mahindra was down by 3.31%, Tata Motors was down by 2.95% , Maruti Suzuki was down by 2.10% and  HDFC was down by 1.75% and were the top losers on the Sensex.

Meanwhile, India's services exports declined by 3.5% to $12.35 billion in June from $12.80 billion recorded in the previous month. Conversely, Imports of services also moved down to $6.22 billion in June from $6.98 billion in the previous month. During April-June period of financial year 2013-14, the cumulative services receipt or exports grew by an annual rate of 10.2% to $37.99 billion, while, total services outgo or imports stood at$ 20.58 billion during the first three months of the current fiscal.

Services are critical to India’s economic well being and constitute more than half the country’s GDP. The share of services in the GDP has risen from 33.3% in 1950-51 to 64.8% in 2012-13. Service sector includes key service exporter industries like Health Care, Tourism, Education, Engineering and Information Technology among others. India’s services export growth has been faster than that of merchandise exports, with the export of services growing at a compounded annual growth rate (CAGR) of 23.6% between 2001-02 and 2011-12, while merchandise exports grew at a CAGR of 21.4% during the same period. However, growth in services exports became erratic after the global financial crisis in 2008.

As per the World Trade Organization (WTO), India was ranked sixth in exports of commercial services, with a 3.6% global share, and in services imports, it ranked seventh with a 3.4% share. In contrast, the country was ranked 19th in merchandise exports with a paltry 1.6% market share and was in 13th position with a 2.5% share in imports. The CNX Nifty is currently trading at 5,306.35 down by 45.35 points or 0.84% after trading in a range of 5,373.05 and 5,306.35. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were JP Associate up by 4.05%, Ranbaxy up by 2.42%, Jindal Steel up by 1.19%, ICICI Bank up by 0.98% and Rel Infra up by 0.87%. On the flip side, Sun Pharmaceuticals down by 4.46%, Lupin down by 3.45%, M&M down by 3.36%, Asian Paints down by 2.89% and Tata Motors down by 2.80% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 331.75 points or 1.48% to 22,131.95, Jakarta Composite crumbled 184.69 points or 4.28% to 4,128.83, KLSE Composite dropped 32.68 points or 1.84% to 1,745.68, Nikkei 225 shed 244.42 points or 1.80% to 13,490.13, Straits Times decreased 30.66 points or 0.97% to 3,142.67, Seoul Composite contracted 22.15 points or 1.17% to 1,894.97 and Taiwan Weighted was down by 66.50 points or 0.86% to 7,831.88.

On the flip side, Shanghai Composite was up by 11.59points or 0.56% to 2,074.02.