Benchmarks extend early losses; trade at intra-day low level

Indian equity benchmarks extended early losses and reached at their intra-day low level in the afternoon session amid selling witnessed in metal, tech and realty stocks. Sentiments were dampened as the Confederation of Indian Industry (CII) survey forecasted India's economy to grow in the range of 4.5 to 5 percent during the second half of the current fiscal year and highlighted that growth uncertainty, high food inflation, and rising borrowing costs have all impeded consumer demand. Further, weak global cues and feeble fiscal deficit data for the first three quarters of the current fiscal year also added to pessimistic sentiments. Metal stocks were trading down as the Purchasing Managers' Index of China, the world's largest consumer of copper and aluminum, eased in January. Investors were also seen selling stocks of telecom sector ahead of the spectrum auction and IT stocks amid a strengthening rupee. On stock specific movement, Dr Reddy’s Lab, Hero Motocorp and Gail India were trading up by over 1.20%, while, Bharti Airtel, Hindalco Inds and Tata Steel were trading down by over 2.00% on BSE. Shares of Bajaj Auto were up over 1% at around Rs 1,923 after the two-wheeler major reported highest ever export sales for January 2013.

On global front, Asian equity indices were trading lower with Seoul Composite down by 1.08% and Nikkei 225 down by 1.80% on the back of weak economic data from China. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,100 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,097 stocks traded, 1,076 stocks advanced, while 903 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,406.27 down by 107.58 points or 0.52% after trading in a range of 20,480.35 and 20,391.96. There were only 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.25%.

The gaining sectoral indices on the BSE were healthcare up by 1.04%, Consumer Durables up by 1.01%. While, Metal down by 1.64%, Teck down by 0.69%, Realty down by 0.66%, Auto down by 0.65% and Oil and Gas down by 0.61% were the losing indices on BSE.   

The top gainers on the Sensex were Dr Reddy’s Lab up by 1.61%, Hero Motocorp up by 1.25%, Gail India up by 1.20%, Sun Pharma up by 1.12% and Axis Bank up by 0.74%. On the flip side, Bharti Airtel down by 2.73%, Hindalco Inds down by 2.65%, Tata Steel down by 2.04%, Tata motors down by 2.04% and M&M down by 1.91%.

Meanwhile, As per the Confederation of Indian Industry (CII) survey, India's economy is likely to grow in the range of 4.5 to 5 percent during the second half of the current fiscal year. Highlighting political uncertainty as the biggest concern for growth, CII noted that although domestic economy may have already bottomed out in the previous quarter, the recovery process is on sluggish mode.

Presenting a lethargic picture of the Indian economic outlook, CII highlighted that growth uncertainty, high food inflation, and rising borrowing costs have all impeded consumer demand. The industry body does not expect any significant improvement in the GDP growth for the second half of FY14 as against the first half. India's economic growth slowed to a decade low of 5 percent in the previous fiscal and 4.6% in the first half of FY14 owing to the global slowdown and domestic factors, like high interest rates.

In order to boost the growth, CII has suggested the government to take necessary steps to improve investment climate in the country and boost domestic demand. It suggested the government to halve the threshold limit of fast-track projects from the current level of Rs 1,000 crore to speed up the clearances of the held-up projects. Further, CII has stated that it is time that the monetary policy to be directed at stimulating growth as inflation was showing some signs of moderation. 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. The industry body expects that exports are likely to increase at a moderate pace during the current quarter. During April-December’2013, value of exports increased by 5.94% to $230.34 billion as against $217.42 billion in the same period of previous year. The CNX Nifty is currently trading at 6,059.45 down by 30.05 points or 0.49% after trading in a range of 6,074.85 and 6,052.20. There were only 15 stocks advancing against 35 declining on the index.

The top gainers of the Nifty were Lupin up by 1.77%, Dr Reddy’s Lab up by 1.48%, Hero Motocorp up by 1.29%, Gail up by 1.16% and Ultratech Cement up by 1.08%. On the flip side, Bharti Airtel down by 2.81%, Hindalco Inds down by 2.69%, Jindal Steel down by 2.64%, Tata Steel down by 2.27% and Bank of Baroda down by 2.21% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 1.08%, Nikkei 225 down by 1.80%, Straits Times down by 1.09% and Jakarta Composite down by 0.38%.