Domestic markets trade near day's low; Auto stocks major laggards

Indian equity markets extended early losses and currently trading near low point of the day amid consistence selling in some blue chip counters. The 30 share Sensex fell by 67 points, while 50-share NSE Nifty tested the 5,100 level. Investors were treading cautiously and refrained from building up positions amid volatility. In currency market, Indian rupee witnessing volatile trade as it rose marginally against dollar in early trade on Wednesday but currently erased all gains and trading flat in negative territory. On sectoral front Auto stocks were leading losers on reports of additional excise duty on diesel-cars. Country's largest car manufacturer Maruti Suzuki topped the selling list, falling 3.5%. Utility vehicle maker M&M and top commercial vehicle maker Tata Motors were down 2-2.5% each. Realty, bank, energy and metal stocks were drifting lower. Information technology and PSU stocks were trading off their highs. On the global front, most of the Asian shares were trading in green.

The BSE Sensex is currently trading at 16,794.89, down by 67.91 points or 0.40%. The index has touched a high 16,898.88 and low 16,792.87 of respectively. There were 11 stocks advancing against 19 declines on the index.

The broader indices were also following the benchmark; the BSE Mid-cap index was down by 0.31% and Small-cap index was down by 0.26%.

The top gaining sectoral indices on the BSE were HC up 0.73%, FMCG up 0.54%, IT up 0.24%, CG up 0.15% and TECk up 0.12%. While, Auto down by 1.84%, Realty down by 0.96%, CD down by 0.89%, Bankex down by 0.58% and Oil & Gas down by 0.58% were the losers on the index.

The top gainers on the Sensex were Sun Pharma up 1.20%, HUL up 1.10%, Wipro up 0.74%, Coal India up 0.73% and Cipla up 0.56%. On the flip side, Maruti down 3.75%, M&M down 2.75%, Sterlite Industries down 2.55%, Tata Motors down 2.24% and Hero MotoCorp down 1.71% remained the top losers on the Sensex.

Mean while, the finance ministry is seeking a cash reserve ratio (CRR) cut in the upcoming mid-quarter review of monetary policy, scheduled on June 18. Ministry is of view that a CRR cut would improve credit flow and prompt economic growth. On the sidelines, Department of Financial Services Secretary D K Mittal said, ‘CRR is an issue addressed by the regulator (RBI), but as owner of banks when we have to meet Basel III requirement, we will welcome CRR cut.’

In order to infuse liquidity in the market, in March, the Reserve Bank of India (RBI) had slashed CRR by 0.75% to 4.75%. It earlier reduced CRR by 0.50% in January, leaving banks with an additional Rs 80,000 crore for lending. The RBI in its policy meet is widely expected to cut rates to boost the sinking economic growth, which for the fourth quarter of FY12 came in at 9-year low of 5.3%.

Finance Minister Pranab Mukherjee, while assessing the performance of state-run banks and financial institutions had said that the easing of lending rates, after the apex bank reduced the repo rate in its April monetary policy review will enhance liquidity and the economic growth.

Meanwhile, many banks, together with State Bank of India (SBI) have also pitched for CRR cut by 100 basis points, in order to improve the profitability of banks. CRR is the portion of deposits that banks are required to keep with the central bank.

The S&P CNX Nifty is currently trading at 5,101.90, down by 14.00 points or 0.27%. The index has touched a high and low of 5,128.35 and 5,095.45 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were HUL up 1.55%, Sun Pharma up 1.21%, Ambuja Cement up 1.07%, Wipro up 0.94%, and HCL Tech up 0.93%. On the flip side, Maruti down 3.46%, Sterlite down 3.02%, M&M down 2.68%, Tata Motors down 2.12% and Sesa Goa down 1.77% were the major losers on the index.

The Asian equity indices were trading mostly in green; Jakarta Composite up 0.32%, Taiwan Weighted up 0.24%, Nikkei 225 up 0.60%, KLSE Composite up 0.24%, KOSPI Composite Index up 0.25%, Shanghai Composite up by 0.91%and Hang Seng Index was up 0.35%.

On the flip side, Straits Times Index down 0.40% was only the loser on the index.