Benchmarks recover from day’s low; weakness prevails

Benchmark equity indices although recovering from day’s low level have cut back some of its losses, weakness prevailed at Dalal Street, with Sensex was trading below the crucial 21,900 mark. However, Nifty has regained the crucial 6,500 mark and is currently trading with loss of over 1 /10 of a percent. On the flip side, the session clearly belongs to broader indices, which are trading with gains in the range of 0.35%-0.65%.

Much of the bourses weakness could be attributed to Asian counterparts, which are trading weak at this point of time. On the global front, Asian stocks fell sharply on Monday and the dollar stepped back from its recent highs as surprisingly weak Chinese trade data rattled investors already on edge over the crisis in Ukraine. Investors started the new week in Asia on a cautious note after data issued on Saturday showed China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy.

On the global front, while stocks from Capital Goods, Realty and Oil & Gas counter were supporting the recovery of the bourses, this was being counterbalanced from stocks belonging to Information Technology (IT), Metal and Healthcare counters. In other sector specific activity, while Realty stocks extended their recent strong gains, Pharma stocks declined for the second day in a row. Ranbaxy Laboratories dropped on reports the company has recalled more than 64,000 bottles of the generic version of a cholesterol-lowering drug in the United States after dosage mix-up was detected. Telecom stocks edged higher. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1046:777; while 37 shares remained unchanged.

The BSE Sensex is currently trading at 21887.53, down by 32.26 points or 0.15% after trading in a range of 22,005.54 and 21805.22. There were 12 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The broader indices added some ground; the BSE Mid cap index was up by 0.34%, while Small cap index gained 0.62%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.14%, Realty up by 1.68%, Oil & Gas up by 1.39%, Bankex up by 1.02% and Power up by 0.46%. While, IT down by 2.13%, TECK down by 1.41%, Metal down by 1.12%, Healthcare down by 1.08% and Auto down by 0.83% were the losing indices on BSE.   

The top gainers on the Sensex were  BHEL up by 3.05%, SBI up by 3.02%, L&T up by 2.63%, RIL up by 2.61% and M&M up by 1.78%. On the flip side, Tata Motors down by 3.42%, TCS down by 2.02%, Infosys and Hindalco down by 2.21% and Sun Pharma down by 1.78%.

Meanwhile, concerned over the slow growth in Indian exports, the Federation of Indian Export Organisations (FIEO) has emphasized that the government must expeditiously clear Rs 19,000 crore of duty refund claims as the mounting arrears is impacting the country’s overseas shipments. Highlighting liquidity as a big issue to domestic exports, FIEO President Rafeeque Ahmed asserted that despite repeated requests, the customs authorities have failed to clear the claims since October last year. Pending claims has now reached about Rs 19,000 crore and would reach at Rs 25,000 crore by end of the fiscal.

FIFO President added that pending claims are highest at JawaharLal Nehru sea port at Rs 3,059 crore followed by Chennai sea port with Rs 1,280 crore. Further, VAT claims in states like Maharashtra, West Bengal, Punjab and Tamil Nadu and are very high. Small and medium exporters would be the worst-hit due to delay in duty refund claims, he added.

The FIFO had already notified that India’s exports will fall short by about $10 billion from its set target of $325 billion for the current fiscal as the factors like declining manufacturing growth, pending duty refund claims and slow recovery in global demand are adversely impacting the country’s exports. However, the value of exports increased by 5.71% to $257.09 billion during April-January’FY14 as against $243.19 billion in the same period of previous fiscal year. FIEO is presently preparing a draft for the new Foreign Trade Policy for 2014-19 including measures to boost exports, which will be submitted to the new government in the next two and a half months time.

The CNX Nifty is currently trading at 6,518.20, down by 8.45 points or 0.13% after trading in a range of 6,548.75 and 6,487.35. There were 23 stocks advancing against 27 declining on the index.

The top gainers of the Nifty were Indusind Bank up by 3.76%, IDFC up by 3.76%, SBI up by 3.01%, BHEL up by 2.65% and Reliance up by 2.63%. On the flip side, Tata Motors down by 3.50%, TCS down by 2.89%, HCL TECH down by 2.81%, Ranbaxy down by 2.70% and NMDC down by 2.31% were the major losers on the index.

Asian equity indices were trading in red; Nikkei 225 down by 1.01%, Hang Seng plunged by 1.96%, Straits Times dropped by 0.45%, Shanghai Composite plummeted 2.84%, Jakarta Composite slid 0.39% and Taiwan Weighted was down by 0.56%.