Benchmarks trade lower on profit booking

Indian equity benchmarks are trading lower in early deals on Tuesday as investors opted to book profits after recent gains. Moreover, weak cues from Asian markets too dampened the sentiments with most of the regional counters trading lower with investors treading cautiously following flat close on Wall Street overnight. Meanwhile, the Japanese stock market was trading weak, with investors indulging in some profit taking after recent strong gains. However, the US markets ended modestly higher in last session, though the trading remained somewhat subdued lacking any major announcement from the economy front and on concern that central bank may begin tapering its asset purchase plan next week.

Back home, sentiments also remained dampened after foreign lender HSBC said it sees government breaching its FY14 fiscal deficit target of 4.8% on account of slower revenue and higher expenditure in the first half of the fiscal. Even as Finance Minister P Chidambaram has been reiterating of not breaching the red line on fiscal deficit target, HSBC expects spending-revenue gap to overshoot to 5.1%. However, losses remained capped as some support came in with Paris-based think tank OECD’s report that Indian economy is seeing a tentative positive change in momentum while most of the major economies are witnessing improved growth prospects. Meanwhile, the rupee is trading at 61.06/07 per dollar versus its close of 61.13/14 per dollar on Monday.

On the sectoral front, software witnessed the maximum gain in trade followed by technology and consumer durables, while power, capital goods and banking remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the overall market breadth on BSE is in favour of declines, which have thumped advances in the ratio of 500: 696; while 72 shares remained unchanged.

The BSE Sensex opened at 21293.58; about 32 point lower compared to its previous closing of 21326.42, and has touched a high and a low of 21327.75 and 21239.02 respectively. The index is currently trading at 21279.03, down by 47.39 points or 0.22%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a weak start with 39.69% stocks advancing against 54.65% declines. The broader indices were trading mixed; the BSE Mid cap up by 0.07% and Small cap indices trading down by 0.21%.

The top gaining sectoral indices on the BSE were, IT up by 1.74%, Teck up by 1.40%, Consumer Durables up by 0.53%, Healthcare up by 0.28% and FMCG up by 0.19%, while Power down by 4.11%, Capital Goods down by 2.20%, PSU down by 1.85%, Bankex down by 0.94% and Realty down by 0.23% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 2.78%, Wipro up by 1.31%, Infosys up by 1.00%, Coal India up by 0.90% and RIL up by 0.85%. On the flip side, NTPC was down by 10.83%, BHEL was down by 4.48%, L&T was down by 2.77%, Tata Power was down by 2.13% and ICICI Bank was down by 1.96% were the top losers on the Sensex.

Meanwhile, the Ministry for Micro, Small and Medium Enterprises (MSMEs) will organize a meeting with the heads of the public sector banks soon in order to encourage them to lend to MSME sector under the Pradhan Mantri Employment Generation Programme (PMEGP).

Union Minister of State for Small and Medium Enterprises, K.H. Muniappa has said that presently, banks are cautious for lending under the scheme in some areas of MSMEs, therefore, the meeting will organize to learn about their problems and sort them out. The Government would stand guarantor for a significant portion of the loans and provide matching subsidies under scheme, Minister added. On the other hand, banks had reported that many MSMEs loans had turned bad as the subsidies were credited to the loan account holders’ account.

Under the PMEGP scheme, which has formed by merging the existing employment generation programmes - Rural Employment Generation Programme and Pradhan Mantri Rozgar Yojana loans are given without any collateral. Through the scheme, the government has planned to reach out to 1 lakh entrepreneurs in 650 districts across the country during 2013-14 and also aims to train 40 lakh people through the primary technical training centres during the 12th Plan period.

The MSME sector contributes around 8% of the country's GDP, 45% of the manufactured output and provides employment to over 8 crore persons engaged in over 3.6 crore units. Meanwhile, the government has been taking steps to boost the sector’s growth. In the 12th Five-Year Plan, the government has increased Budget allocation for the sector to Rs 24,000 crore from Rs 11,000 crore in the previous five-plan period.

The CNX Nifty opened at 6,354.70; about 9 points lower as compared to its previous closing of 6,363.90, and has touched a high and a low of 6,362.25 and 6,335.60 respectively. The index is currently trading at 6,345.05, down by 18.85 points or 0.30%. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were TCS up by 2.70%, HCL Tech up by 1.71%, Wipro up by 1.41%, UltraTech Cement up by 1.25% and ACC up by 1.13%. On the flip side, NTPC down by 10.88%, BHEL down by 4.57%, L&T down by 2.58%, Power Grid down by 2.42% and Tata Power down by 2.19% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng slipped 21.01 points or 0.09% to 23,790.16, Nikkei 225 decreased 27.17 points or 0.17% to 15,623.04, Straits Times shed 10.87 points or 0.35% to 3,102.77, Seoul Composite contracted 7.15 points or 0.36% to 1,993.23 and Taiwan Weighted was down by 10.27 points or 0.12% to 8,434.35.

On the flip side, Shanghai Composite rose 3.87 points or 0.17% to 2,242.07, Jakarta Composite surged 49.87 points or 1.18% to 4,264.21 and KLSE Composite was up by 2.29 points or 0.12% to 1,844.16.