Markets continue to trade lower in afternoon session

Indian equity benchmarks continue to trade in red amid selling witnessed in rate-sensitive stocks banking, capital goods, metal and auto, as investors remained cautious that interest rates would continue to remain high. Last week, Reserve Bank of India (RBI) Governor Raghuram Rajan commented that inflation is a destructive disease which is forcing the central bank to keep policy rated high. Investors’ sentiments were dampened as Planning Commission Deputy Chairman Montek Singh Ahluwalia has attributed the decline in India's growth rate mainly to domestic factors. Ahluwalia asserted that the one third of prevailing economic downturn could be attributed to global factors and two-thirds to domestic factors. Further weak global cues and depreciation in rupee value against the dollar also added to the pessimistic sentiments. All sectoral indices on BSE were trading in red. On stock specific movement, Tata Motors, Tata Steel and Maruti Suzuki were trading down by over 3.50%, while, Sun Pharma and Wipro were the only stocks trading marginally in green on BSE.

Ranbaxy Laboratories, adding to previous session 19.43% plunge, dipped further by nearly 8% as the drug maker continues to remain under pressure after the US drug regulator banned more of its products. On the other hand, Shares of Glenmark Pharmaceuticals were up around 3% at Rs 524 after the company reported growth in its speciality and generic business despite a challenging business environment. Torrent Power was down by around 3.80% to nearly Rs 102.90 after the company reported consolidated net loss of Rs 35.51 crore in Q3 FY14.

On global front, Asian shares were trading in red with Nikkei 225 down by 2.41% and Hang Seng down by 2.07%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was negative, out of 2,135 stocks traded, 527 stocks advanced, while 1,519 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,820.40 down by 313.16 points or 1.48% after trading in a range of 20,899.03 and 20,787.25. There were only 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.78%, while Small cap index was lower by 1.65%.

The losing sectoral indices on the BSE were Realty down by 3.25%, Bankex down by 2.99%, Metal down by 2.86%, Auto down by 2.80% and Capital Goods down by 2.29% , while there were no gaining indices on BSE.  

The top gainers on the Sensex were Sun Pharma up by 1.06% and Wipro up by 0.06%. On the flip side, Tata Motors down by 4.59%, Tata Steel down by 3.65%, Maruti Suzuki down by 3.60%, ICICI bank down by 3.49% and SSLT down by 3.30%.

Meanwhile, suggesting steps to boost the economy’s growth, International Monetary Fund (IMF) chief Christine Lagarde advised India to take measure such as fighting corruption for improving business climate in the country. Christine Lagard further added that addressing bottlenecks of Indian economy should be given priority as there are a host of bottlenecks in many corners hampering investment in the country. The India’s economic growth slowed to decade low of 5 percent in 2012-13.

Referring to country’s fiscal deficit front, IMF chief stated that the government should focus on fiscal consolidation. The country’s fiscal deficit reached around 94 percent of the budgeted target in the first eight months of FY14. Meanwhile, the government has set target to contain the fiscal deficit at 4.8 percent of GDP in the current financial year.

On inflation front, Lagarde expressed hope that steps being taken by the RBI under new Governor Raghuram Rajan would help in improving the price situation in the country. WPI inflation eased to five month low at 6.16% in the month of December on y-o-y basis as against 14-month high of 7.52% in November. IMF chief further added that the RBI's proposal to target inflation is desirable as it has worked ‘quite well’ in many countries. Regarding the impact of US Federal Reserve tapering on India, Christine Lagard suggested that steps like attracting foreign investment and economic consolidation will help the country to deal with US Fed tapering programme.

The CNX Nifty is currently trading at 6,170.05 down by 96.70 points or 1.54% after trading in a range of 6,188.55 and 6,162.90. There were only 3 stocks advancing against 47 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 1.05%, HCL Tech up by 0.33% and Wipro up by 0.11%. On the flip side, JP Associates down by 5.35%, Tata Motors down by 4.75%, Ranbaxy down by 4.58%, Indusland Bank down by 4.58% and DLF down by 4.31% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 1.56%, Nikkei 225 down by 2.41%, Hang Seng down by 2.07%, KLSE Composite down by 0.85%, Straits Times down by 1.34%, Jakarta Composite down by 2.91%, Shanghai Composite down by 0.60% and Taiwan Weighted down by 1.58%.