Sensex, Nifty extends early losses amid volatility

Indian equity markets extended early losses in late morning session on profit booking by speculators after some gains. Disappointment as regards to the scope of US Federal Reserve's bond purchases and weak HSBC factory data from China also hurt the local markets to a great extent. In currency markets, rupee hit record low against American currency on Thursday amid increasing dollar demand from oil importers. On sectoral front capital goods, realty, FMCG and power stocks were supporting the markets whereas the selling continued in technology and auto stocks. Meanwhile, index heavyweight Reliance Industries fell over 3% as its partner in KG D6 - Niko Resources reported that total proved plus probable natural gas reserves at the company’s KG D6 block in India have slumped by almost 51% to 377 billion cubic feet equivalent (bcfe). On the global front, most Asian markets were trading down. Back home, the market breadth favoring positive trend; there were 1,174 shares on the gaining side against 1,010 shares on the losing side while 116 shares remained unchanged.

The BSE Sensex is currently trading at 16,861.98, down by 34.65 points or 0.21%. The index has touched a high and low of 16,888.34 and 16,811.42 respectively. There were 15 stocks advancing against 15 declines on the index.

The broader indices managed to gain some traction; the BSE Mid cap index and Small cap indices captured 0.25% and 0.37% respectively.

Capital Goods up by 1.33%, Realty up by 0.74%, Power up by 0.74%, FMCG up by 0.52% and Public Sector Undertaking up by 0.48% were the top gainers on the BSE sectoral chart. On the flip side, Oil & Gas down by 1.11%, Information Technology down by 0.93%, Technology down by 0.69%, Auto down by 0.28% and Metal down by 0.19% were the top losers on the index.

The top gainers on the Sensex were BHEL up by 2.53%, Tata Power up by 1.46%, Hero MotoCorp up by 1.28%, Sterlite Industries up by 1.23% and ONGC up by 1.21%.

On the flip side, RIL down by 3.00%, TCS down by 2.07%, Hindalco Industries down by 1.23%, Maruti Suzuki down by 1.06% and Mahindra & Mahindra down by 0.76%, were the major losers on the index.

Meanwhile, with the gradual shift of consumers to diesel models due to huge difference between petrol and diesel prices, several manufacturers are forced to cut down production of petrol models. The automobile industry is reported to have piled up an inventory of more than 300,000 unsold cars of various types at the end of May. This had forced companies to give incentives and discounts to boost the sales of petrol cars. Top companies like Maruti Suzuki, General Motors and Toyota are slashing petrol car output to align themselves to the new market reality.

In the last fiscal, sales of petrol-run cars had fallen by 15%, while diesel variants grew by 35%. Car sales in India grew at the slowest pace in seven months during May with just 2.78% rise, as high interest rates and petrol prices hit the market. The sluggish demand has not only impacted passenger car makers but is also hitting commercial vehicle manufacturers.

The S&P CNX Nifty is currently trading at 5,111.35, down by 9.20 points or 0.18%. The index has touched a high and low of 5,122.80 and 5,094.60 respectively. There were 23 stocks advancing against27 declines on the index.

The top gainers of the Nifty were BHEL up by 2.56%, JP Associates up by 2.17%, Tata Power up by 1.57%, DLF up by 1.53% and ONGC up by 1.45%.

On the flip side, RIL down by 3.00%, ACC down by 2.68, Ambuja Cements down by 2.30%, TCS down by 2.16% and Carin down by 2.11% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite dropped 1.29%, Hang Seng pummeled 0.87%, Jakarta Composite declined 0.96%, Straits Times skid 0.74%, South Korea's Kospi drowned 0.78% and Taiwan Weighted was lower by 0.76%.

On the other hand, Japan's Nikkei up 0.82% was the sole gainer amongst the Asian pack.