Markets extend losses; trade near intra-day low levels

Indian equity benchmarks added losses in the late afternoon session as traders booked profits while investors were cautious ahead of a few global developments within the week that may influence the equity markets around the world. Hovering near the lowest point of the day, the equities witnessed  sharp profit booking in capital goods, oil and gas stocks and banking stocks after a recent rally dragged the market down. Investors’ sentiment got a hit after the HSBC services Purchasing Managers’ Index (PMI) fell from 48.8 in February to 47.5 in March below 50 mark for the ninth successive month that separates growth from contraction. Selling was broad based with both mid cap and small cap indices trading in negative territory. Though most of the major indices were trading in red, healthcare and metal stock continued to gain. Stocks of domestic pharmaceutical companies were trading higher after report that the US Food and Drug Administration (US FDA) is disputing a study that detected impurity in a number of heart drugs made overseas. On stock specific movement, Ashok Leyland was up 1.7% at around Rs 23.90 levels after the second largest commercial vehicle maker said it has bagged a contract worth $50 million approx from the Ministry of Tourism & Hospitality Industry, Zimbabwe for supplying 670 vehicles.

On global front, Asian equity indices were hovering near four-month highs with Straits Times was up by 0.75% and Jakarta Composite up by 0.39% as upbeat US data improved risk appetite. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,700 and 22,400 levels respectively. The market breadth on BSE was negative, out of 2,375 stocks traded, 1,033 stocks advanced, while 1214 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,466.03 down by 85.46 points or 0.38% after trading in a range of 22,620.65 and 22,465.73. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trade in red; the BSE Mid cap index was down by 0.17%, while Small cap index down by 0.13%.

The gaining sectoral indices on the BSE were Metal up by 0.95%, Consumer Durables up by 0.84%, Healthcare up by 0.78% and Auto up by 0.18%. While, Capital Goods down by 1.42%, Oil and Gas down by 1.22%, Bankex down by 0.81%, Power down by 0.71% and FMCG down by 0.52% were the losing indices on BSE.   

The top gainers on the Sensex were Dr Reddy’s Lab up by 1.27%, SSLT up by 1.24%, Cipla up by 0.90%, Sun Pharma up by 0.80% and Hindalco Inds up by 0.48%. On the flip side, BHEL down by 2.22%, SBI down by 1.81%, ONGC down by 1.74%, L&T down by 1.67% and Gail India down by 1.47%.

Meanwhile, the International Monetary Fund (IMF) has expressed need for developing countries like India to enhance public and private investments to fill infrastructure gaps. Highlighting that higher and well-prioritised investment would increase potential output and jobs, IMF chief Christine Lagarde has asserted that over the years, investment has declined across many countries such as Brazil, India, South Africa, and the ASEAN countries. The IMF had already noted that the recent investment gloom in India was mainly due to deteriorating business confidence, high financing costs and heightened uncertainty regarding the future course of broader economic policies.

On global economy, the IMF chief emphasized that investment to upgrade existing infrastructure networks is also needed in a number of the advanced economies like the US and Germany. Global economy has certainly stabilized since the onset of the financial crisis, but the recovery was too weak for comfort. The global economy is witnessing slow and sub-par growth, well below the solid, sustainable growth, therefore it has become imperative for countries come together to take the right kind of policy measures to boost economy’s growth is needed to create enough jobs and improve living standards into the future. Right policy actions and better cooperation across countries could raise world GDP by over 2 percent over the next 5 years, she added. The global activity has moderated at slow growth in developed economies, the emerging market and developing economies have been bearing the burden of recovery, accounting for around 75 percent of the increase in global growth since 2009.

Referring to economic growth in various countries, growth is strongest in the United States, supported by robust private demand and an easing of the short-term fiscal brake. While, activity in emerging market economies, which has been slowing, picked up slightly in the latter part of 2013 by stronger demand from advanced economies. Further she added that emerging Asian countries will continue to be a bright spot, posting the world's highest growth rate of more than 6 percent in 2014, though tighter external financial conditions would be a drag on domestic demand.

The CNX Nifty is currently trading at 6,723.80 down by 28.75 points or 0.43% after trading in a range of 6,776.75 and 6,722.15. There were only 18 stocks advancing against 32 declining on the index.

The top gainers of the Nifty were NMDC up by 2.85%, Jindal Steel up by 2.43%, Dr Reddy’s lab up by 1.23%, Asian Paints up by 1.18% and Cipla up by 1.13%. On the flip side, BHEL down by 2.07%, Indusland Bank down by 2.03%, GAIL down by 1.96%, BPCL down by 1.93% and SBI down by 1.91% were the major losers on the index.

Asian equity indices were trading in green; Straits Times was up by 0.75% to 3,216.74, Jakarta Composite up by 0.39% to 4,889.03, Hang Seng up by 0.08% to 22,542.35 and Nikkei 225 up by 0.88% to 15,077.44. While, Taiwan Weighted was down by 0.19% to 8,888.54 and Shanghai Composite down by 1% to 2,038.57.