Benchmarks trim losses as heavyweights recover

Benchmarks recouped their early losses in late Morning trade after index heavyweights which had slipped into the red in early deals staged a recovery and were now trading in positive zone. Investors remained concerned after International Monetary Fund (IMF) further cut India’s current fiscal growth projection to 3.8% from 5.6% as projected in July and 5.7% as expected in April. It has said that growth in India has slowed down more than anticipated and the country must maintain fiscal and monetary credibility in order to prevent capital outflows. Meanwhile, gains remained capped on weakness in Indian rupee against dollar. The Indian rupee was trading at 62.15 per dollar as compared to previous day’s close of Rs 61.79 per dollar.

On the global front, The US markets suffered sharp plunge overnight on worries about the impact of the ongoing government shutdown. Moreover, Asian markets too exhibited sluggish trade in early deals as investors remained concerned on IMF warning on the global economy and the continuing U.S. government shutdown with news that Federal Reserve vice chair Janet Yellen will be nominated to head the U.S. central bank.

Back home, traders were buying, Health Care, Realty and FMCG while selling was seen in Bankex, PSU and Metal on the BSE. The market breadth on BSE remains positive with advances to declines in the ratio of 957: 690. BSE Sensex and NSE Nifty were comfortably trading near their psychological 19,900 and 5,900 levels respectively. 

The BSE Sensex is currently trading at 19939.28, down by 44.33 points or 0.22% after trading in a range of 19958.97 and 19826.96. There were 12 stocks advancing against 18 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.42% and Small cap index gained 0.49%.

The top gaining sectoral indices on the BSE were, Health Care up by 0.94%, Realty up by 0.86%, FMCG up by 0.28% , Oil & Gas up by 0.21%, and Capital Goods up by 0.15%, while Bankex down by 1.00%, PSU down by 0.56%, Metal down by 0.52% , Consumer Durables down by 0.22%, and Power  down by 0.10% were the top losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 2.13%, Tata Motors up by 1.17%, Tata Power up by 0.77%, Jindal Steel up by 0.72%, and RIL up by 0.53%. On the flip side, ICICI Bank was down by 2.70%, Bharti Airtel was down by 2.19%, SBI was down by 1.79%, SSLT was down by 1.34%, NTPC was down by 1.32% and were the top losers on the Sensex.

Meanwhile, amid rising concerns over the deteriorating economic fundamentals of the country, the International Monetary Fund (IMF) has cut Indian economic forecast to 3.75 percent in 2013 from 5.7 percent projected earlier. Presenting a sombering picture of India's economic outlook, IMF in its latest World Economic Outlook report, said that poor manufacturing and service sector performance coupled with rising inflation could adversely affect the economy’s growth in the current fiscal. 

IMF noted that strong agriculture production growth on the back of better weather conditions in current fiscal will be offset by lacklustre activity in manufacturing and services, and monetary tightening adversely affecting domestic demand. Referring to high inflation, IMF said that India is among the economies that may require more tightening to address inflation pressure, which will likely be reinforced by recent currency depreciation. The wholesale price index (WPI) inflation rose to a six-month high of 6.10 percent in August as against 5.79 percent for the month of July. Meanwhile, IMF projected that Indian economic growth will accelerate to around 5 percent in 2014 on the back of easing supply bottlenecks and strengthening of exports.   

At present, Indian economy is struggling with slowdown and its growth has slowed down to four year low at 4.4 percent in April-June quarter, 2013. Further, all macro-economic indicators have deteriorated with current account deficit (CAD) widened to a record high of 4.9 per cent of GDP in the April-June quarter, 2013. Further, rupee value has also depreciated over 15 percent against dollar in 2013, which has become a cause of concern for the country, as India is structurally an import intensive country. 

The CNX Nifty is currently trading at 5,914.60  down by 13.80 points or 0.23% after trading in a range of 5,920.35 and 5,877.10. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were JP Associate up by 3.29%, Lupin up by 2.00%, Sun Pharmaceuticals up by 1.92%, Tata Motors up by 1.27% and DLF up by 1.22%. On the flip side, ICICI Bank down by 2.80%, Bharti Airtel down by 2.29%, SBI down by 1.74% , M&M down by 1.55%, and ACC down by 1.47% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite slipped 1.66 points or 0.08% to 2,196.54, Hang Seng declined 131.71 points or 0.57% to 23,047.14, KLSE Composite slipped 5.32 points or 0.30% to 1,772.18, Taiwan Weighted was down by 18.54 points or 0.22% to 8,357.11.

On the flip side, Jakarta Composite rose 6.97 points or 0.16% to 4,439.48, Nikkei 225 surged 108.35 points or 0.78% to 14,001.47 and Straits Times was up by 13.08 points or 0.42% to 3,159.58.

South Korean markets remained shut for the trade today.