Markets trade slightly lower in early deals

After hitting all time highs in previous session, Indian equity benchmarks are trading slightly in the red in early deals on Tuesday as investors booked some profit off the table after previous session’s rally. Some cautiousness also crept in after the Election Commission has sought deferment of the price hike till elections are over. It has been reported that after deliberating gas pricing once again and taking into account government’s version, the EC decided to defer a decision on the contentious issue as the matter was pending in the SC. Meanwhile, The Commerce and Industry Ministry too is concerned over whether its proposals for easing foreign direct investment (FDI) rules in railways and construction development sectors will get EC nod.

Global cues too remained sluggish with the US markets ending lower overnight offsetting some strength that was seen last week after the release of a report from Markit Economics showing that US manufacturing activity fell by more than expected in March. Asian markets were trading mostly in the red at this point of time as investors weighed the prospect of a recession in Russia.

Back home, losses remained capped on Economic Affairs Secretary Arvind Mayaram’s statement that the Finance Ministry expects economic growth to further improve in the next fiscal on the back of better macro-economic fundamentals. On the sectoral front, metal, power and consumer durables witnessed the maximum gain in trade, while oil and gas, software and technology remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 967 shares on the gaining side against 746 shares on the losing side while 97 shares remain unchanged.

The BSE Sensex opened at 21,948.31; about 107 points lower compared to its previous closing of 22,055.48, and touched a high and a low of 22,047.99 and 21,916.87 respectively. The index is currently trading at 22,036.79, down by 18.69 points or 0.08%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a strong start with 53.43% stocks advancing against 41.22% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.45% and Small cap gained 0.43%. 

The top gaining sectoral indices on the BSE were, Metal up by 1.04%, Power up by 0.77%, Consumer Durables up by 0.71%, FMCG up by 0.66% and Bankex up by 0.55%, while Oil & Gas down by 2.03%, IT down by 0.37%, Teck down by 0.34%, PSU down by 0.13% and Auto down by 0.10% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 2.22%, HDFC Bank up by 1.24%, HDFC up by 1.02%, ITC up by 0.86% and SBI up by 0.81%. On the flip side, ONGC was down by 2.83%, RIL was down by 2.72%, Wipro was down by 1.12%, Tata Motors was down by 0.56% and TCS was down by 0.44% were the top losers on the Sensex.

Meanwhile, India needs an enabling environment in order to spur the investment, besides reduction in interest rates by the Reserve Bank of India (RBI), according to the HSBC Country Head Naina Lal Kidwai.

Kidwai asserted that although high interest rates are impacting investment and consumption demand, which are needed to be reduced, there is also a need to improve the business environment in the country. Regarding the possibility of interest rate cut by the RBI, she mentioned that central bank is likely to see sustained improvement on inflation front before making an interest rate cut. However, the RBI should not increase rates amid declining industrial growth. Indian industrial output for the period April-January 2013-14 stood flat over the corresponding period of the previous year. On the other hand, CPI inflation eased to a 25-month low of 8.10% in February, as against 8.79% in January.

The central bank, which has maintained a hawkish interest rate regime in order to tame inflation, is scheduled to announce the next monetary policy on April 1. The latest decline in retail inflation is much on the expected lines of the apex bank which had hiked key interest rates by 0.25 per cent in its previous third quarter monetary policy review.

The CNX Nifty opened at 6,550.10; about 33 points lower as compared to its previous closing of 6,583.50, and has touched a high and a low of 6,591.50 and 6,544.85 respectively. The index is currently trading at 6,583.00, down by 0.50 points or 0.01%. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Tata Steel up by 2.04%, Power Grid up by 2.03%, Jindal Steel & Power up by 1.59%, JP Associate up by 1.43% and Bank of Baroda up by 1.25%. On the flip side, Reliance Industries down by 2.89%, ONGC down by 2.62%, Wipro down by 1.07%, IDFC down by 0.80% and Tata Motors down by 0.70% were the top losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 25.81 points or 0.12% to 21,820.64, Jakarta Composite dipped by 19.66 points or 0.42% to 4,700.76, KLSE Composite decreased 3.67 points or 0.20% to 1,830.18, Straits Times contracted by 9.10 points or 0.29% to 3,102.73 and KOSPI Composite was down by 1.26 points or 0.06% to 1,944.29.

On the flip side, Shanghai Composite soared 8.97 points or 0.43% to 2,075.25, Nikkei 225 spurted by 11.71 points or 0.08% to 14,487.01 and Taiwan Weighted was up by 69.11 points or 0.80% to 8,674.49.