Markets continue to trade in red in afternoon session

Indian equity benchmarks continued to trade in red in afternoon session amid selling witnessed in frontline blue chip stocks such as Axis Bank, Tata Power and Sun Pharma among others. Foreign institutional investors' (FIIs) capital outflow in previous session and fall in rupee value against the dollar have deteriorated investor’s sentiments. Oil and Gas index was the top loser on BSE down by around 0.95% followed by realty and bankex both down by over 0.80%. On stock specific movements, BHEL, Maruti Suzuki and Sun Pharma were trading up by over 1.40%, while, Axis Bank, ONGC and Tata Powers were trading down by over 1.50% on BSE. Maruti Suzuki India, extending previous session's rally, rose by 1.09% to around Rs 1,826 triggered by foreign brokerages raising their target price on the stock. Among other shares, Zuari Agro Chemicals has soared nearly 10% to Rs 166, extending its previous day’s 5% rally, on reports that Zuari Fertilisers & Chemicals is planning to divest its entire stake in Mangalore Chemicals and Fertilizers (MCF). Claris Lifesciences is trading higher by around 2% at nearly Rs 202 ahead of board meeting today to consider a share buyback proposal. Meanwhile, the numbers of companies that have announced share buyback proposals have risen sharply in past six months.

On global front, Asian shares stabilised on Tuesday after four straight days of losses and Asian equity indices were trading mixed with Straits Times up by 0.24% and Jakarta Composite down by 0.36%. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,128 stocks traded, 1,041 stocks advanced, while 960 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,713.85 down by 73.45 points or 0.35% after trading in a range of 20,890.48 and 20,637.18. There were 7 stocks advancing against only 23 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index up by 0.38%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.35%, Healthcare up by 0.47%, Consumer Durables up by 0.15% and Auto up by 0.11%. While, Oil and Gas down by 0.95%, Realty down by 0.86%, Metal down by 0.83%, Bankex down by 0.80% and IT down by 0.52% were the losing indices. 

The top gainers on the Sensex were BHEL up by 2.86%, Maruti Suzuki up by 2.09%, Sun Pharma up by 1.43%, L&T up by 1.19% and Dr Reddy’s Lab up by 0.89%. On the flip side, Axis Bank down by 2.69%, ONGC down by 1.62%, Tata Powers down by 1.59%, Hindalco Inds down by 1.52% and Tata Steel down by 1.29%.

Meanwhile, in order to boost the economy’s growth, Prime Minister's Economic Advisory Council Chairman C Rangarajan has expressed a pressing need for intensifying reforms and trimming subsidies adding that if India grew at 8 to 9 percent each year, per capita GDP would rise to $10,000 by 2025, which will also transit India from being a low income to a middle income country. Highlighting that increasing savings and investments could take India back to the very high levels of growth seen earlier, Rangarajan emphasized the need to overcome the current low growth phase as quickly as possible. He added that economic growth reflects the effect of recently launched country's socio-economic problems and several schemes aimed at broadening the base of growth.

Referring to the deteriorating macro-economic indicators, Rangarajan added that trimming inflation, containing current account deficit (CAD) and ensuring fiscal consolidation were the major tasks requiring immediate attention. To raise revenue-GDP ratio, it is imperative to check expenditures, particularly subsidies which need to be pruned, well focused and prioritized. Meanwhile, the government also decided to reduce subsidies from 2.6 percent of GDP in 2012-13 to 1.6 percent of GDP in 2015-16. Regarding the high inflation, PMEAC Chairman asserted that price stability is a pre-condition for sustained high growth and added that monetary policy and fiscal policy have to play their part in containing overall demand pressures. High return on savings and investment can take us back to the very high levels of growth, therefore the government should expedite the implementation of projects.

Concerned over the widening CAD of the country due to gold imports, Rangarajan stated that gold imports at 54 billion dollars has remained high and the country must dissuade people from being attracted to the yellow metal. Over the next few years, India needs to keep the CAD at a more comfortable level of 2.5 percent of GDP. India’s CAD touched a record high of 4.8 percent of GDP in 2012-13.

Rangarajan highlighted two sectors such as farm and power sector, which are posing concerns for medium term growth for Indian economy. He stressed that the last three years have clearly shown how a decline in agricultural production can cause serious distortions in the economy, therefore necessary steps must be taken to revitalise traditional crop agriculture which is vital to food security and farm income. Agriculture and allied activities must grow at 4 percent per annum in India. On power Sector, PMEAC Chairman added that in order to add 75,000 mw generation capacity, an aggressive path is imperative while the constraints like availability of coal, land acquisition and environmental issues need to be tackled for capacity expansion.

The CNX Nifty is currently trading at 6,165.30 down by 26.15 points or 0.42% after trading in a range of 6,221.50 and 6,144.75. There were 11 stocks advancing against 39 declining on the index.

The top gainers of the Nifty were BHEL up by 3.10%, Maruti up by 2.15%, Sun Pharma up by 1.47%, L&T up by 1.29% and Dr Redddy’s Lab up by 0.89%. On the flip side, Axis Bank down by 2.76%, Bank of Baroda down by 2.47%, ONGC down by 1.62%, Kotak Bank down by 1.60% and Hindalco Inds down by 1.56% were the major losers on the index.

The Asian equity indices were trading mixed; Hang Seng up by 0.12%, Straits Times up by 0.24%, KLSE Composite up by 0.07%, Taiwan Weighted up by 0.14% and Seoul Composite up by 0.32%. While, Jakarta Composite down by 0.36%, Shanghai Composite down by 0.11%, and Nikkei 225 down by 0.55%.