Markets languish near day’s low; reversal of trend likely after narrower Feb trade deficit data

Losing additional ground, Indian equity markets are languishing near day’s low, with Nifty testing the crucial 6500 level and Sensex trading marginally above the psychological 21,850 mark with loss of over quarter of a percent. Profit-booking by investors at life time high levels, have mainly led benchmarks after five sessions gaining streak in today’s trading session. With incremental selling pressure, broader indices too have succumbed to profit booking and are trading mixed at this point of time.

Despite supportive regional counterparts, local equity markets are trading lower. However, better than expected Feb trade data could bring some respite to Indian equity markets. Trade deficit for the month of February narrowed to $8.13 billion. Meanwhile, on the global front, Asian markets found steady foot after a rocky ride in previous session, though uncertainty about the true state of China's economy kept nerves frayed and commodity prices restrained.

Closer home, gains of stocks from Power, Information Technology and Technology counters were being offset by losses in scrip belonging to Metal, Auto and Capital Goods sector. Metal stocks were trading downbeat for second consecutive session on raising fears of a slowdown in the world's second-largest economy, China. However, Information Technology stocks were trading upbeat despite seven month high level of Indian currency. Meanwhile, in stock-specific activities, tyre stocks, viz Ceat, MRF, JK Tyre among others were gaining traction on multi-month low rubber prices in international market. The overall market breadth on BSE is in the favour of declines in the ratio of 1395:1093; while 144 shares remained unchanged.

The BSE Sensex is currently trading at 21863.72 down by 71.11 points or 0.32% after trading in a range of 22,018.52 and 21,841.58. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices succumbing to selling pressure were trading mix at this point of time; while BSE Mid cap index was down by 0.01%, Small cap index up by 0.05%.

The gaining sectoral indices on the BSE were Power up by 0.60%, IT up by 0.39% and Teck up by 0.12%. While, Metal down by 2.64%, Auto down by 0.67%, Capital Goods down by 0.65%, Consumer Durables down by 0.58% and Oil & Gas down by 0.45% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Power up by 3.36%, Axis Bank up by 0.71%, Dr Reddy’s Lab up by 0.66%, Wipro up by 0.62% and BHEL up by 0.37%. On the flip side, Tata Steel down by 4.20%, Hindalco Inds down by 4.02%, SSLT down by 2.74%, M&M down by 2.57% and Sun Pharma down by 2.02%.

Meanwhile, the government is planning to build nearly 200 low-cost airports in the next 20 years to expand connectivity to Tier-II and Tier-III cities. Joint Secretary of Civil Aviation G Ashok Kumar has asserted that the idea to expand low cost airports to meet the demand for air travel.

G Ashok Kumar further added that non-metro airports presently account for only about 30% of the total air traffic, which is expected to increase to 45% in the next few years. Referring to current issues to Indian aviation industry, Joint Secretary asserted that the industry is facing multiple challenges including high Aviation Turbine Fuel (ATF) costs, VAT, high landing and other operational costs and falling tariffs. The state governments are not reducing the Value Added Tax (VAT) and other rates on ATF, he added. Ashok Kumar also announced the fourth edition of the international exhibition and conference on Civil Aviation-India Aviation 2014. The five-day event, with the theme of enhancing air connectivity of India, will held on March 12, jointly organised by the Ministry of Civil Aviation, Government of India and the Federation of Indian Chambers of Commerce and Industry.

Indian aviation industry, after witnessing constant fall in the past two years, showed some improvement in air passenger traffic in current fiscal. Domestic passenger traffic accounts for more than 70 per cent of the total air passenger traffic. During April-December 2013, Indian airports handled 126.2 million passengers as against 117.5 million passengers carried in the corresponding period a year ago, reflecting a healthy growth of 7.4 percent. The improvement over recent months was inconsistent with continued weakness in the economy and could be attributed to fare discounting by industry players such as Jet Airways, SpiceJet and Indigo.

The CNX Nifty is currently trading at 6,514.65, down by 22.60 points or 0.35% after trading in a range of 6,562.85 and 6,510. There were only 22 stocks advancing against 28 declining on the index.

The top gainers of the Nifty were Tata Power up by 3.16%, Ambuja Cement up by 1.48%, IDFC up by 1.11%, Ultratech Cement up by 1.04% and Grasim Inds up by 0.93%. On the flip side, Tata Steel down by 4.30%, Hindalco Inds down by 4.06%, M&M down by 2.72%, SSLT down by 2.64% and Jindal Steel down by 2.33% were the major losers on the index.

Asian equity indices were trading in green; Nikkei 225 surged 0.69%, Hang Seng up by 0.08%, Straits Times advanced 0.36%, Jakarta Composite rose 0.23% and Taiwan Weighted gained 0.43%. On the flip side, Shanghai Composite down by 0.05% was the sole loser amongst Asian pack.