Benchmarks continue weak trade in afternoon session

Indian equity benchmarks continued trading in red in afternoon session amid selling in FMCG and IT stocks. Investors’ sentiments’ were dented by revised lower Indian economic growth forecast to 5.3%  by Prime Minister's Economic Advisory Council (PMAEC), for the current financial year from 6.4% projected earlier. PMEAC also said that controlling CAD remains a major concern for the government and pegged FY14 CAD at $70 billion or 3.8% of GDP. Further, fall in rupee value against the dollar also added to the pessimistic sentiments. However, capital goods shares were trading up by over 1 percent after announcement of better-than-expected capital goods output growth in July. Capital goods production, a barometer for investments in the economy, rebounded by a robust 15.6% in July.

In stock specific movement, BHEL and M&M were trading up by over 2 percent; while, Wipro, Bharti Airtel and HDFC were trading lower by over a percent on BSE. The market breadth remained positive, out of 2,022 stocks traded, 1,135 stocks advanced, while 774 stocks declined on the BSE. On global front, Asian equity indices mainly traded in red as global investors remained worried that the US Federal Reserve may cut its monthly stimulus at next week's monetary policy meeting.

The BSE Sensex is currently trading at 19,718.98 down by 62.90 points or 0.32% after trading in a range of 19,899.37 and 19,675.68. There were only 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index gained 0.52%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.32%, Power up by 1.05%, PSU up by 0.99%, and Realty up by 0.88%. While, IT down by 1.23%, TECK down by 1.09%, Consumer Durables down by 0.98% and FMCG down by 0.68% were the losing indices on BSE.

The top gainers on the Sensex were, BHEL up by 2.63%, Mahindra and Mahindra up by 2.15%, Hero Moto Corp up by 1.77%, L&T up by 1.76% and Coal India up by 1.51%. On the flip side, Wipro down by 3.08%, Bharti Airtel down by 1.87%, HDFC down by 1.37%, Tata Steel down by 1.27% and Infosys down by 1.13% were the only losers on the Sensex.

Meanwhile, the government has approved a proposal to invest $4.3 billion in bonds of International Bank for Reconstruction and Development (IBRD), an arm of the World Bank. The Reserve Bank of India (RBI) will now subscribe to special private placement of bonds by the IBRD. The move would raise the agency's (IBRD) lending limit to India by around $21.8 billion and additional borrowing space would enable the government to commit new infrastructure projects with the World Bank assistance.

Investing in IBRD bonds is expected to widen the scope for more loans as the India’s ceiling for borrowing from the World Bank is reaching the limit. Presently, the limit for a single borrower of the World Bank is $17.5 billion. After the latest development the IBRD would be able to lend to India $4.3 billion above that Single Borrower Limit of $17.5 billion. Further these bonds would be of various tenures and the RBI would get return on investment. At the end of March 2013, the share of multilateral debt, which is usually at concessional rates and of long tenure, fell to 13.2% from over 20% at the end of March 2007.

The government is of view that the proposal will enable the country to leverage World Bank's knowledge base and global reach for transfer of knowledge, adoption of good practices, reforms of processes and systems and capacity building.

The CNX Nifty is currently trading at 5,836.45 down by 14.25 points or 0.24% after trading in a range of 5,884.30 and 5,822.90. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were BHEL up by 2.93%, JP Associates up by 2.48%, M&M up by 2.25%, DLF up by 1.91% and PNB up by 1.84%. On the flip side, HCL Tech down by 2.75%, Ultra Tech Cement down by 2.16%, Bharti Airtel down by 1.69%, Indusind Bank down by 1.51% and HDFC down by 1.49% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 0.49%, KLSE Composite down by 0.26%, Shanghai Composite down by 1.02%, Taiwan Weighted down by 0.69%,  Straits Times down by 0.17% and Hang Seng down by 0.54%. While, Nikkei 225 was up by 0.04% and Jakarta Composite up by 0.21%.