Benchmarks retreat after positive start; Sensex holds 19k level

Indian benchmarks, after making a positive start, erased their entire gains due to profit booking as investors seemed to have priced in yesterday’s news of second round of reforms by the UPA government. However, the global cues remained supportive as the US markets extended their gains overnight on getting report that people filing new claims for unemployment benefits rose only slightly last week after a big drop the week before, the data soothed the sentiments ahead of Friday's closely watched monthly payrolls report. While, most of the Asian equity indices were trading in the green as investor risk aversion eased after the European Central Bank said it was ready to buy bonds of troubled euro zone countries.

Back home, the markets opened higher for the sixth consecutive session on Friday following Cabinet’s clearance to FDI in insurance and pension, and encouraging comments by ECB President Mario Draghi yesterday. But, the undertone turned cautious, as the markets seemed to have already reacted to the news of impending Cabinet nod for FDI in pension sector and increase in FDI limit in insurance. On the sectoral front, auto witnessed the maximum gain in trade followed by metal space which edged higher. A four members of the six-member team of the Justice MB Shah Commission went to Odisha to probe into the mega mining scam in the state, however, software and technology pack remained the top losers on the BSE sectoral space as the Indian rupee appreciated further on selling of more dollars by exporters and consistent inflow of foreign funds. The rupee rose by 0.58 percent or 30 paise to 51.44 against the US dollar. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 864 shares on the gaining side against 867 shares on the losing side while 75 shares remained unchanged.

The BSE Sensex opened at 19,115.89; about 57 points higher compared to its previous closing of 19,058.15, and has touched a high and a low of 19,137.29 and 18,982.98 respectively.

The index is currently trading at 19,016.93, down by 41.22 points or 0.22%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a negative start with 47.84% stocks advancing against 48.01% declines. The broader indices too were struggling to get traction; the BSE Mid cap and Small cap indices fell 0.01% and 0.14% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 1.23%, Metal up by 0.44%, FMCG up by 0.32%, CG up by 0.31% and Oil and Gas up by 0.27%. While, IT down by 1.11%, TECk down by 1.01%, HC down by 0.70%, Realty down by 0.26% and CD down by 0.14% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 2.59%, M&M Auto up by 1.57%, HUL up by 1.33%, Tata Power up by 1.05% and Coal India up by 0.93%.

On the flip side, HDFC was down by 3.51%, TCS was down by 1.46%, Sun Pharma was down by 1.42%, Infosys was down by 1.37% and Bharti Airtel was down by 0.78% were the top losers on the Sensex.

Meanwhile, with the continued efforts to bring down the mounting Current Account Deficit (CAD), the Prime Minister's Economic Council Chairman C Rangarajan pointed that the nation might require about $50 - 70 billion per annum for next five years to bring down the deficit rate to 2.3% of GDP. The council noted that it will be a challenging task to garner such huge amount of capital investments into the nation amid increasing global risk aversions and slowing growth.

Even though, the former Reserve Bank Governor has remained confident that CAD will be minimized to 3.5% of GDP in the present fiscal. He blamed merchandise trade deficit for peaking CAD, the difference between foreign exchange earned and foreign exchange expended to 3.9% in the first quarter of the year. Though it was better than Q4 last year’s 4.5% on the back of slowing imports.

The current deficit had reached at a historic high of 4.3% of GDP for the full year in FY12, while in Q2 of last fiscal it had touched a whopping 4.5% of GDP. While, the gold and silver imports had come down to 47.5% compared to the previous year and growth in non-oil, non-gold imports also declined about 0.3% on year-on-year basis, due to dip in domestic demand, hike in customs duty on gold and as rupee depreciated against US dollars.

The S&P CNX Nifty opened at 5,815.00; about 28 points higher compared to its previous closing of 5,787.60, and has touched a high and a low of 5,815.35 and 5,761.85 respectively.

The index is currently trading at 5,772.50, down by 15.10 points or 0.26%. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.33%, Bajaj Auto up by 1.68%, M&M up by 1.23%, Tata Power up by 1.10% and Coal India up by 0.91%.

On the flip side, HDFC down by 3.44%, TCS down by 1.91%, Lupin down by 1.59%, Sun Pharma down by 1.58% and IDFC down by 1.44%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng was up by 84.26 points or 0.40% to 20,992.21, Jakarta Composite was up by 35.37 points or 0.87% to 4,311.88, KLSE Composite was marginally up by 2.04 points or 0.12% to 1,663.59, Straits Times was up by 1.27 points or 0.04% to 3,087.79, Kospi Composite gained 6.52 points or 0.28% to 1,999.03 and Taiwan Weighted added 15.23 points or 0.19% to 7,697.32.

On the flip side, Nikkei 225 was lower by 9.56 points or 0.11% to 8,815.03.

Financial markets in China remained closed.