Benchmarks witness volatility in early deals on Wednesday

Indian equity markets witnessed a bout of volatility in early deals and are trading near their last closing level, as investors were taking a pause after four continuous days of rally. Investors remained worried on concern about possible US military action against Syria. Moreover, weakness in Indian rupee too dampened the sentiments. The rupee was trading at Rs 64.06 compared with previous close of Rs 63.84 per dollar. However, there was some optimism too after Prime Minister’s Economic Advisor (PMEAC) C Rangarajan asserted that India’s economy is likely to grow at around 5.5 percent this fiscal. The PMEAC Chairman said special emphasis was being given on production and capacity-creation in some key infrastructure sector that lies in the public domain.

Global cues remained mixed as the US markets continued their rally overnight, extending their gains for yet another day amid cautious optimism that the Syrian crisis could be resolved without US military action. However, most of the Asian equity indices were trading in the red at this point of time as investors booked some profit after recent rallies. Chinese benchmark was trading in the green terrain after data on Tuesday showed that Chinese auto sales, factory output and investment all improved in August.

Back home, some of the banking stocks remained higher with latest initiative of the Reserve Bank of India (RBI), where it has said that banks can borrow from overseas market up to 100% of their unimpaired Tier I capital as at the close of the previous quarter, with an upper limit of $10 million. On the sectoral front, realty witnessed the maximum gain in trade followed by capital goods and metal, while FMCG, oil and gas and PSU remained the top losers on the BSE sectoral space. However, broader indices were trading with great traction, while the market breadth on the BSE was positive; there were 793 shares on the gaining side against 429 shares on the losing side while 45 shares remain unchanged.

The BSE Sensex opened at 19999.77; about 2 points higher compared to its previous closing of 19997.09, and has touched a high and a low of 20055.53 and 19820.24 respectively. The index is currently trading at 19983.70, down by 13.39 points or 0.07%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 62.59% stocks advancing against 33.86% declines. The broader indices were trading in green; the BSE Mid cap index up by 0.90% and Small cap index up by 0.57%. 

The top gaining sectoral indices on the BSE were, Realty up by 1.60%, Capital Goods up by 1.54%, Metal up by 1.37%, Health Care up by 1.04% and Consumer Durables up by 0.72%, while FMCG down by 0.79%, Oil & Gas down by 0.27%, PSU down by 0.17%, Bankex down by 0.06% and Power down by 0.20% were the top losers on the sectoral index.

The top gainers on the Sensex were Hindalco Industries up by 3.09%, Maruti Suzuki up by 2.57%, Hero MotoCorp up by 2.26%, Tata Steel up by 2.08% and L&T up by 1.94%. On the flip side, ONGC was down by 1.81%, Tata Motors  was down by 1.60%, Hindustan Unilever was down by 1.60%, NTPC was down by 1.30% and ITC was down by 1.24% were the top losers on the Sensex.

Meanwhile, amid rising debt flows, deceleration in GDP growth and depreciating rupee, the country’s key external debt indicators witnessed some deterioration in FY13. India's external debt stock increased by 13% to $390 billion in the reported fiscal as against $345.5 billion in FY12 as the country scrambled to raise quick funds to meet the record high current account deficit. Indian external debt to GDP ratio also went up to 21.2% in the FY13 against 19.7% in FY12.  The country debt rose mainly due to increase in short term debt, commercial borrowings and non-resident Indian deposits.

The share of short-term debt to total debt country rose to 24.8% at the end of 2012-13 from 22.6% a year ago, while share of concessional debt in the total debt dropped. However, magnitude of increase in external debt was offset to some extent due to gain resulting from appreciation of the US dollar against Indian rupee and other international currencies. Referring to the currency composition to the total debt, the US dollar denominated debt continued to be the largest component with a share of 57.2%, followed by rupee (24%), special drawing rights SDR (7.5%), Japanese yen (6.3%) and euro (3.5%).

Meanwhile, NRI deposits increased by $12.2 billion to $70.8 billion at end-March 2013 primarily due to increase in rupee denominated NRI deposits. The ratio of foreign exchange reserves to external debt at end-March 2013 at 74.9% was lower than the level of end-March 2012 at 85.2%.

The CNX Nifty opened at 5,887.25; about 9 points lower as compared to its previous closing of 5,896.75, and has touched a high and a low of 5,913.45 and 5,842.10 respectively. The index is currently trading at 5,899.50, up by 2.75 points or 0.05%. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Hindalco up by 3.18%, Lupin up by 2.76%, DLF up by 2.45%, Maruti Suzuki up by 2.44% and IndusInd Bank up by 2.38%. On the flip side, ONGC down by 2.03%, JP Associate down by 1.47%, Tata Motors down by 1.32%, Hindustan Unilever down by 1.31% and NTPC down by 1.26% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined by 28.90 points or 0.13% to 22,947.75, Jakarta Composite slipped 24.19 points or 0.55% to 4,333.96, Straits Times dipped 9.61 points or 0.31% to 3,114.28, Seoul Composite decreased 2.07 points or 0.10% to 1,991.99 and Taiwan Weighted was down by 55.62 points or 0.68% to 8,153.15.

On the flip side, Shanghai Composite rose 14.06 points or 0.63% to 2,252.04, KLSE Composite strengthened 3.44 points or 0.19% to 1,768.39 and Nikkei 225 was up by 121.28 points or 0.84% to 14,544.64.