Benchmarks trade near neutral line with negative bias

Indian equity benchmarks continue to trade near neutral line with negative bias in the afternoon session amid sluggish global cues and selling witnessed in IT and capital goods stocks. Investors’ sentiments remained dampened as India’s GDP growth slowed down to 4.7 percent in the third quarter of current fiscal year, while, core sector expansion slowed to 1.6 percent in the month of January’2014. However, market losses remain capped as investors were seen piling up positions in consumer durables and banking stocks. The HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rose to 52.5 in the month of February as against 51.4 in January, signaling a solid and stronger improvement in business conditions across the country’s goods-producing sector. On stock specific movements, Gail India, SBI and Hindalco Inds were trading up by over 0.90%, while, Dr Reddy’s Lab, Tata Motors and SSLT were trading down by over 1.30% on BSE.

Monsanto India is locked in its 10% upper circuit for the second straight session in a row at Rs 1,613 on reports that the Union ministry of environment and forests (MoEF) has approved field trials of genetically modified (GM) food crops on a conditional basis. Jubilant Life Sciences, extending its previous session around 8% rally, has surged nearly 9% to Rs 135.50 after the company said its manufacturing facility at Montreal, Canada, has got a clean chit from the US Food and Drug Administration (US FDA). Furthermore, TVS Motor Company was trading higher by 3.2% at Rs 88.60 after reporting 6% year-on-year growth in two-wheeler sales in February 2014.

On global front, Asian equity indices were trading in red with Nikkei down by 1.28% and Straits Times down by 0.86% as increasing tension in Ukraine caused investors to remain wary.  Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,261 stocks traded, 1,273 stocks advanced, while 880 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,115.30 down by 4.82 points or 0.02% after trading in a range of 21,140.0 and 21,029.99. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.70%, while Small cap index up by 0.62%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.93%, Realty up by 0.99%, Oil and Gas up by 0.70%, Bankex up by 0.51% and FMCG up by 0.27%. While, IT down by 0.56%, Capital Goods down by 0.55%, Auto down by 0.39%, Teck down by 0.32% and Power down by 0.14% were the losing indices on BSE.   

The top gainers on the Sensex were Gail India up by 1.60%, SBI up by 1.00%, Hindalco Inds up by 0.95%, Axis Bank up by 0.87% and RIL up by 0.72%. On the flip side, Dr Reddy’s Lab down by 1.51%, Tata Motors down by 1.33%, SSLT down by 1.30%, Bajaj Auto down by 1.22% and L&T down by 1.03%.

Meanwhile, concerned over the prevailing economic slowdown, India Inc has asserted that slow growth in economy and core sector data is bound to erode the cautious optimistic mood prevalent in the industry over the last two months. Reflecting the underlying weaknesses in Asia's third-largest economy, India’s GDP growth slowed down to 4.7 percent in the third quarter of current fiscal year, while, core sector expansion slowed to 1.6 percent in the month of January’2014.

CII Director General Chandrajit Banerjee stated that growth remains in the sub five percent level for the fifth consecutive quarter as sub-optimal output of the mining and manufacturing sectors continue to impact the economy. Assocham President Rana Kapoor stressed that owing to a compression in demand and low consumer confidence, domestic manufacturing sector is presently under pressure, which must be picked up in order to enhance the investment in the country. The manufacturing sector declined by 1.9 percent in Q3FY14 as against a growth of 2.5 percent a year ago. During the first nine months of current fiscal, the output of the sector contracted by 0.7 percent. Ficci President Sidharth Birla has emphasized that it is now difficult to achieve the full year target of 4.9 percent projected by the Central Statistics Office (CSO) as the economy must expand 5.7 percent in the fourth quarter ending March, 2014.

Further, FIEO President M Rafeeque Ahmed has stated that as the GDP growth for Q3FY14 is disappointing, policy makers should consider initiatives to step up investments from the private sector and raise funds through the public-private partnership model by making concession agreements attractive and defining exit modes in order to boost growth. Assocham Secretary General D S Rawat has emphasized that sluggish core sector performance implies that infrastructure deficiency has further widened in the current fiscal. Therefore, in order to improve core sector’s growth, there is need to address the issues linked to the pricing of gas and coal, problems associated with the power distribution policy and continued monopoly of public sector in coal production .

The CNX Nifty is currently trading at 6,269.20 down by 7.75 points or 0.12% after trading in a range of 6,277.75 and 6,249.60. There were only 23 stocks advancing against 27 declining on the index.

The top gainers of the Nifty were Bank of Baroda up by 1.86%, Gail up by 1.25%, NMDC up by 1.25%, Cairn up by 1.22% and Jindal Steel up by 1.21%. On the flip side, JP Associate down by 3.94%, HCL Tech down by 3.74%, SSLT down by 1.44%, Bajaj Auto down by 1.39% and Dr Reddy down by 1.31% were the major losers on the index.

The Asian equity indices were trading in red; Nikkei down by 1.28%, Straits Times down by 0.86%, Hang Seng down by 0.74%, Jakarta Composite down by 0.70%, KLSE Composite was down by 0.64% and Taiwan Weighted down by 0.65%. While, Seoul Composite up by 0.60% and Shanghai Composite up by 0.80%.