Markets recovery efforts get a jolt with lower start in Europe

Indian equity markets are trying hard to recover from the slumber they entered in the early morning, tracking the sluggishness in the Asian markets. However the efforts have got a setback from the lower opening of the major European markets, which are trading lower by about a quarter percent, as worries from Spain has once again made the investors cautious. Back home, though the broader indices have been continuously pruning their losses but selling in some bluechips has taken the benchmarks lower. There is concern among the rate sensitives regarding any further rate cuts by the RBI in its upcoming monetary policy review and the banking stocks were the worst performer, closely followed by oil & gas and capital goods on the same time consumer durables and the metal stocks have taken the lead, capping some losses of the markets. There is draught like situation in the country and that has worried the investors that inflation will remain at elevated levels.

The BSE Sensex is currently trading at 17196.70 down by 82.15 points or 0.48% after trading in a range of 17275.20 and 17142.13. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading with marginal losses; the BSE Mid cap index was down by 0.04%, while Small cap index was lower by 0.06%.

The top gaining sectoral indices on the BSE were, CD up by 0.47%, Metal up by 0.34%, Auto up by 0.29%, FMCG up by 0.05% and TECk up by 0.05%.

On the other hand, Bankex down by 0.83%, oil & Gas down by 0.80%, CG down by 0.66%, Realty down by 0.54% and Power down by 0.53% were major loser on the BSE.

Bajaj Auto up by 1.87%, TCS up by 1.85%, Maruti Suzuki up by 1.49%, Jindal Steel up by 1.28% and Coal India up by 0.65% were the top gainers on Sensex , while Dr reddy’s down by 2.75%, BHEL down by 2.15%, GAIL India down by 1.22%, Cipla down by 1.13% and Sterlite Inds down by 1.09% were major losers on the index.

Meanwhile, Cabinet Committee on Economic Affairs (CCEA) has approved the sale of 10.82% of its stake in Steel Authority of India (SAIL), which is estimated to fetch about Rs 4,000 crore at current market price. The present government share holding in the company is about 85.82%.

The proposal was raised by the Department of Disinvestment and it was postponed in last week’s meeting as Steel Minister Beni Prasad Verma and Steel Secretary D R S Chaudhary were on an official tour. The share sale process will be conducted through auction route or by offer for sale. The government has not launched the disinvestment program for the current fiscal so far due to poor market conditions, albeit it aims to raise Rs 30,000 crore by selling stakes in the public sector firms. The Disinvestment Department is responsible to decide on the timing of the issue depending upon market conditions.

Recently, the CCEA had put on hold in the initial public offer (IPO) of Rashtriya Ispat Nigam (RINL) due to volatility in the markets and lukewarm response of prospective investors in the roadshows held last week. Besides SAIL and RINL, Hindustan Aeronautics, BHEL, National Aluminium Company (Nalco), Hindustan Copper and Oil India are some of the other PSUs which are on government's disinvestment radar this year.

The S&P CNX Nifty is currently trading at 5,213.00, down by 29.70 points or 0.57% after trading in a range of 5,238.70 and 5,197.50. There were 13 stocks advancing against 36 declines while one stock remained unchanged on the index.

The top gainers on the Nifty were Bajaj Auto up by 1.95%, TCS up by 1.79%, Maruti Suzuki up by 1.56%, Jindal Steel up by 1.19% and Asian Paints up by 0.95%, while Kotak Bank down by 2.93%, Dr Reddy down by 2.55%, BHEL down by 2.36%, BPCL down by 1.42% and IDFC down by 1.32% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 0.74%, Jakarta Composite declined by 0.21%, KLSE Composite lost 0.09%, Nikkei 225 plunged by 1.43%, Straits Times was down by 0.60% and Kospi Composite Index was marginally down by 0.03%.
While, Hang Seng was up by 0.04%, and Taiwan Weighted was up by 0.23%.

European markets were trading marginally in red; Germany’s DAX was trading down by 0.05%, UK’s FTSE lost 0.13% and France’s CAC 40 was lower by 0.32%.