Benchmarks pared gains to trade in red

Indian equity markets pared gains to continue weak trade in the late afternoon session on account of selling in front line counters and taking cues from European counterparts. The sentiments turned pessimistic on Prime Minister Manmohan Singh’s speech and on account of underlying caution ahead of GDP data set to be released later in the day, which is expected to grow at 4.7% in the April-June quarter, lower than its decade-low growth of 5% seen in the last fiscal year. Traders were seen piling position in Consumer Durables, Health Care and Bankex stocks while selling was witnessed in Metal, Oil & Gas and Power sector stocks. In scrip specific development, MphasiS was trading in green after its July quarter margins and profits beat street estimates. The IT services firm’s consolidated net profit declined by 7.7% to Rs 192.6 crore in the third quarter ended July 31 on account of wage hikes. Tech Mahindra was trading in green after foreign brokerage firm Morgan Stanley resumed its coverage on the stock with overweight rating. Jindal Steel & Power (JSPL) was trading in red after the company set lower-than-expected buyback offer price.

On the global front, most of the Asian markets were trading in green barring Straits Times and Nikkei 225 while the European markets were trading on pessimistic note.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,400 and 18,400 levels respectively. The market breadth on BSE was negative in the ratio of 991:1037, while 154 scrips remain unchanged. 

The BSE Sensex is currently trading at 18313.38, down by 87.66 points or 0.48% after trading in a range of 18632.23 and 18283.74. There were only 10 stocks advancing against 20 declines on the index.

The broader indices were too trading in red; the BSE Mid cap and Small cap indices were trading lower by 0.44% and 0.05% respectively.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 0.49%, Health Care up by 0.32%, Bankex up by 0.28% and IT up by 0.24% while, Metal down by 3.15%, Oil & Gas down by 1.55%, Power down by 1.37%, Realty down by 1.34% and  PSU down by 1.05% were the losers on the BSE.

The top gainers on the Sensex were, Cipla up by 3.59%, TCS up by 2.66% Wipro up by 1.96%, Baja Auto up by 1.92% and Sun Pharma up by 1.35%. On the flip side, Jindal Steel down by 8.81%, Hindalco Industries down by 4.30%, Sesa Goa down by 3.64%, Tata Motors down by 3.30% and Coal India down by 2.58% were the top losers on the Sensex.

Meanwhile, in a bid to boost the country’s exports, the Commerce Ministry has asked the Finance Ministry to include export credit in priority sector lending of all banks, to boost overseas sales as the flow of credit to the export sector is declining. During FY08 to FY13, the share of export credit in total credit witnessed a sharp decline of 8 percent and has come down to 11.36 percent from 19.82 percent.

The broad categories of priority sector include Agriculture, Small Scale Industries, Small Business / Service Enterprises, Micro Credit, Education loans and Housing loans. Presently, only foreign banks are required to disburse 12 percent of their credit to export companies under the priority sector, while, for other banks export finance is outside the required 40 percent priority sector lending.

In July, country's merchandise exports grew 11.6 percent, however, overseas shipments from major sectors such as engineering and textiles were still in the negative zone. In the previous fiscal, Indian exports declined by 1.76% to $300.6 billion which were the first ever decline since 2009-10. Slowing growth in exports and increasing imports are putting pressure on the current account deficit (CAD), which widened to a record high of 4.8 percent of GDP in the previous fiscal. However, the government is making 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 5,377.95, down by 31.10 points or 0.57% after trading in a range of 5,469.10 and 5,366.70. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Cipla up by 3.48%, Bank of Baroda up by 2.72%, TCS up by 2.65%, Bajaj Auto up by 2.32% and Hindustan Unilever up by 1.48%. On the flip side, Jindal Steel down by 8.99%, Hindalco Industries down by 4.39%, Ranbaxy Laboratories down by 4.38%, JP Associates down by 4.01% and Sesa Goa down by 3.25% were the major losers on the index.

Most of the Asian equity indices were trading in green; KLSE Composite up by 1.14%, Seoul Composite up by 0.99%, Jakarta Composite up by 1.85%, Taiwan Weighted up by 1.32%, Hang Seng added 0.12% and Shanghai Composite gained by 0.06%.

On the flip side, Straits Times was down by 0.11% and Nikkei 225 was down by 0.53% were the only losers.

The European markets were trading in red; France’s CAC 40 was down 0.68%, Germany’s DAX lost 0.79% and UK’s FTSE 100 edged lower 0.61%.