Benchmarks continue weak trade as rupee weakens

Benchmarks continued their southward journey to hit fresh intraday low in late morning trade as weakness in Asian stocks hurt sentiment. Slide in rupee against the dollar also spoiled sentiment. The rupee remained under pressure and was nearing its all-time low level of 65.54 as institutional investors pulled out dollars from emerging markets. The partially convertible rupee was at 65.38, down 1.08 paise or 1.68 per cent, against its previous close. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.

The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday. Foreign institutional investors (FIIs) sold shares worth a net Rs 607.43 crore on Monday, as per provisional data from the stock exchanges. Crude oil is on a boil on concerns that the US may take action against Syria over using chemical weapons against the people. Brent crude oil prices hit a five-month high at about $111.9 a barrel.

On the global front, All the Asian equity indices were trading in the red as sentiments remained dampened after the United States signaled possible military action against the Syrian government over a suspected chemical weapons attack.

Back home, traders were buying, IT, Teck and Consumer Durables, while selling were seen in Banking, Realty and PSU on the BSE. Shares of rate sensitive sectors led by banks were under sharp selling pressure on concerns that the Reserve Bank of India might not lower interest rates at its next policy meet.

Meanwhile, the benchmarks NSE Nifty and BSE Sensex were trading near the psychological 5,350 and 18,300 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in the ratio of 498: 909.The BSE Sensex is currently trading at 18320.26, down by 237.87 points or 1.28% after trading in a range of 18460.72 and 18281.61. There were 6 stocks advancing against 24 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.58% and Small cap index down by 0.36%.

The top gaining sectoral indices on the BSE were, IT up by 1.32%, Teck up by 0.90% and Consumer Durables up by 0.06%, while Bankex down by 2.97%, Realty down by 2.18%, PSU down by 1.59%, Metal down by 1.52% and Auto down by 1.47% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 1.38%, Infosys up by 1.35%, Wipro up by 0.94%, Tata Power up by 0.71% and Dr Reddys Lab up by 0.24%. On the flip side, HDFC Bank was down by 4.66%, HDFC was down by 4.44%, Mahindra & Mahindra was down by 2.54%, Coal India was down by 2.34% and Sun Pharma was down by 2.32% were the top losers on the Sensex.

Meanwhile, the share of exports in the country's gross domestic product (GDP) has declined marginally to 17.3 percent in 2012-13 from 17.6 percent in 2011-12. Commerce and Industry Minister Anand Sharma said that marginal decline in exports’ share is attributable to the ongoing global economic crisis, which led to contraction in international demand.

Commerce Minister said that economic slowdown in developed economies and sovereign debt crisis in Europe have adversely impacted demand for our various sectors’ exports including exports of engineering goods, gems and jewellery, textiles, electronic goods and iron ore among others. By adding further, Anand Sharma added that except 2012-13, the share of exports in the GDP of the country has shown a consistent rise and increased to 17.6 percent in 2011-12 from 15.7 percent recorded in 2010-11.

In the previous fiscal, Indian exports declined by 1.76% to $300.6 billion which were the first ever decline since 2009-10. Presently, there is a need to boost exports in order to contain country’s high current account deficit (CAD), which widened to a record high of 4.8 percent of GDP in the previous fiscal. Further, high CAD also remained main factor behind the fall in domestic currency value, which recently depreciated to a record high of over 65 per dollar. Meanwhile, the government is doing all efforts to boost country’s export and has recently announced a slew of measures including sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

The CNX Nifty is currently trading at 5,396.50 down by 80.00 points or 1.46% after trading in a range of 5,427.40 and 5,389.65. There were 9 stocks advancing against 40 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Ambuja Cements up by 3.85%, HCL Technologies up by 1.52%, Infosys up by 1.43%, Power Grid up by 1.33% and TCS up by 1.31%. On the flip side, IDFC down by 8.34%, HDFC Bank down by 4.89%, HDFC down by 4.68%, IndusInd Bank down by 4.39%, and Kotak Bank down by 3.83% were the major losers on the index.

All  the Asian equity indices were trading in red; Shanghai Composite dipped 3.91 points or 0.19% to 2,092.57, Hang Seng declined 66.61 points or 0.30% to 21,938.71, Jakarta Composite tumbled 126.20 points or 3.06% to 3,994.46, KLSE Composite dropped 16.69 points or 0.97% to 1,705.80, Straits Times contracted 40.20 points or 1.31% to 3,044.08 , Taiwan Weighted was down by 62.21 points or 0.79% to 7,833.50 , Nikkei 225 decreased 80.91 points or 0.59% to 13,555.72  and Seoul Composite was down  by 5.61 points or 0.29% to 1,882.74.