Markets extends early losses; trade at intra-day low level

Indian equity benchmarks extended early losses and reached at their intra-day low level in afternoon session amid weak global cues and selling witnessed in blue chip front line stocks such as Tata Steel, ONGC and Wipro among others. Investors remained cautious ahead of WPI inflation data to be released tomorrow, which will determine the RBI’s stance on key policy rates in its coming monetary policy review. However, investors’ sentiments got some support as global rating agency Fitch has said that the government's efforts to avoid non plan expenditures to achieve the fiscal deficit target of 4.8 percent of the GDP in 2013-14, are supportive for the country's credit rating. On sectoral front, realty was top loser on BSE down by around 1.18% followed by IT and Teck both down by over 0.70%. IT stocks have fallen on profit-taking after the recent run-up on Infosys' better-than-expected quarterly results. On stock specific movement, HDFC, L&T and ITC were trading up by over 0.50%, while, Tata Steel, Tata Motors and TCS were trading down by over 1.60% on BSE.

Ranbaxy Labs plunged nearly 1.6% on BSE, adding to Monday's 5.4% slump after the U.S. FDA raised concerns about the manufacturing practices at a factory owned by the company. On the other hand, CMC has tanked around 8% to Rs 1,586 after reporting 4.8% qoq growth in consolidated net profit at Rs 70.54 crore for Q3 FY14. Further, Merck has gained around 4.34% at nearly Rs 576 after Reliance Mutual Fund bought 1.54% stake in the pharma company on Monday, 13 January 2014.

On global front, Asian shares were trading mixed Nikkei 225 down by 3.19% and Shanghai Composite up by 0.56%. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was negative, out of 2,235 stocks traded, 1,002 stocks advanced, while 1,110 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,057.36 down by 76.85 points or 0.36% after trading in a range of 21,154.76 and 21,055.01. There were 9 stocks advancing against only 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.28%, while Small cap index up by 0.17%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.45% and FMCG up by 0.19%. While, Realty down by 1.18%, IT down by 0.93%, Teck down by 0.79%, Auto down by 0.76% and Oil and Gas down by 0.52% were the only losing indices on BSE.  

The top gainers on the Sensex were HDFC up by 0.70%, L&T up by 0.69%, ITC up by 0.58%, Coal India up by 0.43% and Dr Reddy’s Lab up by 0.30%. On the flip side, Tata Steel down by 2.01%, Tata Motors down by 2.01%, TCS down by 1.61%, ONGC down by 1.30% and Wipro down by 1.17%.

Meanwhile, amid rising doubts over the widening country’s fiscal deficit number, global rating agency Fitch has said that the government's efforts to avoid non plan expenditures ahead of general elections, so as to achieve the fiscal deficit target of 4.8 percent of the GDP in 2013-14, are supportive for the country's credit rating. However, Fitch warned that any slippage on the fiscal front will be negative for country's credit ratings. The rating agency affirmed India's sovereign rating at 'BBB-', which is at the lowest investment grade with stable outlook.

Further, credit rating agency stated that it will wait for next government's policies before determining the future rating as it will provide important information for determining future outlook for India's rating. Earlier in October, Fitch had earlier noted that the government would have to go for greater expenditure cuts in the remainder of the financial year to meet its fiscal deficit target.

India's fiscal deficit reached to Rs 5.1 lakh crore or 94% of the targeted budgetary estimate of Rs 5.42 lakh crore in the April-November period of current fiscal  mainly due to the sluggish revenue collection amid prevailing economic slowdown. Meanwhile, in order to contain the country's fiscal deficit within target level, the government has been taking a number of measures including banning government departments for holding meetings in 5-star hotels among others to cut government spending in non-critical areas. Furthermore, the government has been expressing confidence to meet the divestment target of Rs 40,000 crore for current fiscal despite the fact it has so far only managed to raise Rs 3,000 crore.

The CNX Nifty is currently trading at 6,252.55 down by 20.20 points or 0.32% after trading in a range of 6,280.35 and 6,252.30. There were 13 stocks advancing against 37 declining on the index.

The top gainers of the Nifty were Cairn up by 1.64%, HDFC up by 0.78%, L&T up by 0.66%, ITC up by 0.57% and Dr Reddy’s Lab up by 0.46%. On the flip side, DLF down by 2.36%, Tata Steel down by 2.11%, Tata Motors down by 2.05%, TCS down by 1.58% and ONGC down by 1.57% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite up by 0.56%. While, Nikkei 225 down by 3.19%, Seoul Composite down by 0.10%, , Taiwan Weighted down by 0.21%, Straits Times down by 0.52% and  Hang Seng down by 0.45%.