Benchmarks continue to trade in red in late morning

After making a negative opening, Indian equity benchmarks have pared their initial losses however, still continue to trade near the neutral line with a negative bias in late morning deals as buying emerged at lower levels in select heavyweights. Sentiments in global markets remained down-beat since morning after the US Federal Reserve said it would cut its monthly purchases of US Treasuries and mortgage-backed securities to $55 billion, from $65 billion. Further, rupee deprecation against the US dollar also added to pessimistic sentiments.

However, losses on down-side remained capped as some support came in from software and technology counters which gained around a percentage point with the industry body Nasscom admitting that the domestic story has not been good in the country, has said that though US market is looking up, the industry should open up new fronts such as China, Japan, South Korea and Africa. Sentiments also got some support on report that foreign institutional investors (FIIs) bought shares worth a net Rs 1,069.74 crore on Wednesday, as per provisional data from the National Stock Exchange. On the global front, most of the Asian equity indices too were trading in the red. Back home, traders were buying, Consumer Durables, IT and TECK stocks, while selling was seen in Capital Goods, Bankex and FMCG.

The market breadth on BSE remains positive with advances to declines in the ratio of 1002:955. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,700 and 6,500 levels respectively. The BSE Sensex is currently trading at 21796.60 down by 36.26 points or 0.17% after trading in a range of 21818.91 and 21727.06. There were 11 stocks advancing against 19 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.22% and Small cap index up by 0.38%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.71%, IT up by 1.56%, TECK up by 1.40% and Healthcare up by 0.54%, while Capital Goods down by 1.19%, Bankex down by 0.81%, FMCG down by 0.74%, Power down by 0.68% and Realty down by 0.62% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 2.16%, Wipro up by 1.83%, HUL up by 1.82%, Infosys up by 1.33% and Sun Pharma up by 1.20%. On the flip side, BHEL was down by 2.24%, GAIL was down by 2.12%, ITC was down by 1.63%, L&T was down by 1.60%, and Axis Bank was down by 1.58% were the top losers on the Sensex.

Meanwhile, Easing some restrictions on inward shipments of gold, the Reserve Bank of India (RBI) has allowed more banks, including Axis Bank and Kotak Mahindra Bank, to import gold under the 80/20 scheme. Till now, only six banks and three financial institutions were allowed by the central bank to import gold under the 80/20 scheme.

Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Under the 80/20 scheme, which was introduced in August last year, nominated agencies could import gold on condition that 20 percent of the shipment would be exported and the remainder would be kept for domestic use.

Meanwhile, the government’s measures to contain gold imports have started yielding results as imports of gold and silver declined by 70% to $1.6 billion during first eleven months of current fiscal from a year earlier. India’s gold import is likely to come down to around 550 tonnes in FY13 from 845 tonnes in FY13 due to these restrictions. Contracting India’s gold imports also helped to contain the current account deficit (CAD) to $31.1 billion (2.3% of GDP) during the April-December FY14 period as compared to $69.8 billion (5.2% of GDP) reported in the same period of previous fiscal year. The CAD is expected to narrow to around $50 billion during the current financial year.

The CNX Nifty is currently trading at 6,506.65 down by 17.40 points or 0.27% after trading in a range of 6,516.70 and 6,488.50. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were TCS up by 2.25%, Wipro up by 1.71%, HUL up by 1.67%, Infosys up by 1.30% and Sun Pharma up by 1.14%. On the flip side, Ambuja Cement down by 2.77%, BPCL down by 2.72%, BHEL down by 2.60%, Bank Baroda down by 2.34% and GAIL down by 2.18% were the top losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined by 288.93 points or 1.34% to 21,279.76, Jakarta Composite slipped by 93.88 points or 1.95% to 4,727.58, KLSE Composite decreased by 4.11 points or 0.23% to 1,813.33, Nikkei 225 tumbled 199.89 points or 1.39% to 14,261.83, Straits Times dropped by 12.47 points or 0.50% to 3,066.59, KOSPI Composite dipped 15.68  points or 0.82% to 1,921.61 and Taiwan Weighted was down by 94.15  points or 1.08% to 8,594.30. On the flip side, Shanghai Composite was up by 0.55 points or 0.03% to 2,022.29.