Benchmarks continue to trade in red in late morning

Benchmarks continued to trade in red with IT exporters leading the decline after weaker-than-expected US manufacturing data. Investors remained concerned as the global credit rating agency and consulting firm Fitch on Monday called on the top brass of the Finance Ministry and raised concerns about country’s fiscal deficit. Telecom stocks continue to feel pressure for second day in a row, as telecom firms have together put in bids of around Rs 42,000 crore on the first day of 2G spectrum auctions, giving respite to the government who had targeted Rs 40,874.50 crore from auctions and other charges.

On the global front, Asian markets too were witnessing massacre at this point of time. Japanese market was leading the losers' pack with cut of over three percent as yen strengthened and hit strongest level in more than two months. Back home, traders were buying, Consumer Durables while, selling was seen in IT, TECk and Metal on the BSE.

The market breadth on BSE remains negative with advances to declines in the ratio of 650:1085. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,000 and 5,950 levels respectively.

The BSE Sensex is currently trading at 20035.54 down by 81.68 points or 0.40% after trading in a range of 20065.88 and 19963.12. There were 10 stocks advancing against 20 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.42% and Small cap index lost 0.56%.

The top losing sectoral indices on the BSE were, IT down by 2.35%, TECk down by 1.90%, Metal down by 1.03%, FMCG down by 0.88%, and Realty down by 0.77%, while  Consumer Durables up by 0.07% was only the  gainer on the sectoral front.

The top gainers on the Sensex were Hero MotoCorp up by 1.17%, SBI up by 0.77%, Tata Power up by 0.41%, Bharti Airtel up by 0.39% and Cipla up by 0.25%. On the flip side, Wipro was down by 3.24%, Mahindra & Mahindra was down by 2.80%, TCS was down by 2.68%, Gail India was down by 2.63% and Hindalco Inds was down by 2.17% were the top losers on the Sensex.

Meanwhile, The Department of Economic Affairs (DEA) Secretary Arvind Mayaram has asserted that representatives of Fitch expressed satisfaction on the country’s overall macroeconomic situation. As international rating agencies are to take a call on the country’s economic situation soon, Finance Ministry met with global rating agency Fitch and reviewed the country’s economic scenario. The rating agency affirmed India's sovereign rating at 'BBB-', which is at the lowest investment grade with stable outlook.

Mayaram further added that the rating agency has expressed concerns over the banks' non-performing assets (NPAs), which is below the benchmark and has become a matter of concern for the country. The ratio of gross NPA to advances for banks increased significantly to 3.92 percent in June 2013 from 2.36 percent in March 2011. The rating agency also raised issues over the country’s fiscal deficit, which touched Rs 5,16,390 crore or 95.2 per cent of the Rs 5,42,499 crore fiscal target during April-December FY14. Meanwhile, Finance Ministry has allayed concerns raised by Fitch on the fiscal deficit front and expressed confidence to contain it at 4.8 percent of GDP in current fiscal year.

Further, the Ministry has also assured the rating agency that the current account deficit (CAD) would be narrowed to below $50 billion, or less than 2.5 percent of GDP, in the current financial year on the back of curbs on gold imports and a range-bound rupee. Ministry also asserted that infrastructure investments would increase in coming future following approval of projects by the Cabinet Committee on Investment (CCI) and the Project Monitoring Group. So far this fiscal, around 287 stalled projects worth Rs 5.5 lakh crore have already been cleared and 250 such projects worth Rs 10 lakh crore are expected to be approved shortly. 

The CNX Nifty is currently trading at 5,954.30 down by 47.50 points or 0.79% after trading in a range of 5,963.50 and 5,933.30. There were 14 stocks advancing against 35 stock declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Hero MotoCorp up by 1.17%, Bank Baroda up by 1.06%, SBI up by 0.94%, PNB up by 0.80% and Tata Power up by 0.48%. On the flip side, HCL Tech down by 3.61%, Wipro down by 3.24%, M&M down by 2.80%, Gail down by 2.79% and TCS down by 2.70% were the top losers on the index.

The Asian equity indices were trading in red; Hang Seng dropped 524.36 points or 2.38% to 21,511.06, Jakarta Composite slipped 22.39 points or 0.51% to 4,363.87, KLSE Composite contracted 24.32 points or 1.35% to 1,779.71, Nikkei 225 tumbled 467.70 points or 3.20% to 14,151.43, Straits Times shed 19.66 points or 0.66% to 2,971.29 and Seoul Composite was down by 30.29 points or 1.58% to 1,889.67. 

Markets in Shanghai and Taiwan remained closed for Lunar New Year holidays.