Barometer gauges trim some losses on recovery in banking shares

Barometer gauges have trimmed some of its losses amid recovery in banking shares and also ahead of opening of European market. Off days low, Sensex and Nifty were trading above the crucial 20,050 and 5,950 levels respectively, albeit with loss of close to 3/ 4 of a percent. Meanwhile, broader indices trading with narrower losses were down in the range of 0.20%-0.40%.

On the global front, Asian shares stumbled on Tuesday though the dollar regained firmer footing, after disappointing data cast doubt on the strength of the U.S. economy and gave investors little reason to hope for stability in emerging markets after their recent rout.

Closer home, recovery in banking shares was mainly led by index heavyweight, State Bank of India (SBI) which was trading with massive gains of over a percent. Besides, Consumer Durable counter also was witnessing strong buying interest. Additionally, telecom stocks, viz Bharti Airtel and Idea Cellular too witnessed strong traction on second day of spectrum auction. On the flip side, Information Technology, Technology and Metal counters were the major pockets of weakness. Information technology stocks cracked over 2% after weak US data casted doubt on the strength of the U.S. economy, which is the major market for the IT firms. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1303:831; while 136 shares remained unchanged.

The BSE Sensex is currently trading at 20059.57, down by 149.69 points or 0.74% after trading in a range of 20,093.67 and 19963.12. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices slipped incrementally in red; with Midcap and Smallcap indices trading lower by 0.20% and 0.44% respectively.

While, selling was broad-based, Consumer Durables up by 0.33% and Bankex up by 0.22% were the only gaining sectoral indices on the BSE. On the flip side, IT down by 2.50%, Teck down by 1.79%, Metal down by 0.97%, Realty down by 0.87% and Oil and Gas down by 0.72% were the losing indices on BSE.   

The top gainers on the Sensex were Bharti Airtel up by 2.37%, Tata Motors up by 1.60%, SBI up by 1.56%, NTPC up by 1.07% and Cipla up by 0.80%. On the flip side, M&M down by 4.06%, Wipro down by 2.99%, Gail India down by 2.97%, TCS down by 2.84% and BHEL down by 2.24%.

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 5,959.00 down by 42.80 points or 0.71% after trading in a range of 5,971.25 and 5,933.30. There were 17 stocks advancing against 33 declining on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.19%, Bank of Baroda up by 1.77%, Tata Motors up by 1.66%, SBI up by 1.62% and Punjab National Bank up by 1.26%. On the flip side, HCL Tech down by 4.93%, M&M down by 3.94%, Gail down by 3.15%, Wipro down by 2.98% and TCS down by 2.75% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 1.72%,  Nikkei 225 down by 4.18%, Hang Seng down by 2.53%, Straits Times down by 0.88%, KLSE Composite down by 1.30% and Jakarta Composite up by 0.68%.