Local bourses continue to trade lower; IT stocks shows some resistance

Local bourses after plunging to a 3 week low are now gyrating nearby that level perturbed by weak global stocks and inflation concerns arising out of the constantly high crude oil prices amidst the intense selling in Realty, Power and PSU counters. Though, the selling pressure is being witnessed across the board but stocks from the most beaten spaces of last few sessions--Information Technology along with Power are putting stiff resistance. Other regional peers too are trading on depressed note after global ratings major Standard & Poor's cut its US credit outlook to negative that spooked investors globally, pulling the Dow Jones Index at the closing which in turn spelled trouble for the Asian shares which are all trading in deep sea of red. Meanwhile, the US future indices are showing sharp cut in the screen trade.

However, HDFC Bank has managed to remain afloat amidst sluggish trade as the country's second largest lender beat the forecast and reported better than expected numbers. The Bank has registered growth of 33.24% in its net profit for the quarter ended March 31, 2011 at Rs 1114.71 crore on Q-o-Q basis, while, on consolidated basis, the group's net profit has surged by 32.92% at Rs 3992.49 crore for the year ended March 31, 2011 on Y-o-Y basis. Meanwhile, the benchmark 30 share index--Sensex-- after breaching its 19000 mark is trading above it, while the 50 share pack barometer index--Nifty--continue to trade below the physiological level of 5800 mark. Further, the broader indices after showcasing strong resilience too have surrendered to the selling pressure and trading down in red. The overall market breath on BSE is in the favour of declines which thumped advances in the ratio of 1400:798, while 74 shares remained unchanged.

The BSE Sensex is currently trading at 19,008.62, down by 82.55 points or 0.43%. The index has touched a high of 19,106.79 and a low of 18,976.19 respectively. There were 8 stocks advancing against 22 declines on the index.

The broader indices too were trading in red; the BSE Mid cap and Small cap indices declined 0.39% and 0.19%, respectively.

The top gaining sectoral indices on the BSE were IT up by 0.18%, TECk was up by 0.15%. On the flip side, Realty down 1.51%, Power down by 1.03%, FMCG down by 0.94%, PSU down by 0.83% and Auto down by 0.72% were the top losers on the index.

The top gainers on the Sensex were HDFC Bank up by 0.96%, Reliance Communication up by 0.76%, Reliance Infra up by 0.48%, TCS up by 0.45% and M&M up by 0.34%.

On the flip side, Hero Honda down by 3.15%, BHEL down 2.85%, DLF down 1.58%, Tata Power down by 1.20% and ITC down by 1.13% were the top losers on the index.

Meanwhile, the unseasonal rains and cold weather seen in the northwest India over last few weeks is unlikely to have any major impact on the standing wheat crop. However, the cold weather does delay the maturing of crop and therefore the arrival of wheat is likely to delayed, according to the farm ministry.

In the third advance estimates released by the agriculture ministry recently, a record wheat output of 84.27 million tonne was projected for the in 2010-11 season. The highest ever harvest recorded earlier was 80.8 million tonne, in 2009-10. There were apprehensions that untimely rein may impact crops but the government feels that since the weather pattern is not impacted to last long, impact will not be significant.

A good harvest is very important from point of view of checking the ongoing high inflation in the country. In fact, the latest inflation cycle started with a failed monsoon in 2009 that resulted in substantial decline in Kharif crop that year and produced a negative supply shock, boosting prices. The government as well as the Reserve Bank of India (RBI) has been hoping that as the strong harvest this year comes into markets it will help curb surging prices.

According to the Met department, it was a Western Disturbance (WD) that dispensed isolated light showers over northwest India for greater part of last week but the same was now expected to move on to the Himalayan region. As a result, showers in the region are likely to end and key wheat producing states of Punjab and Haryana are likely to receive a week of dry and gradually heating weather, which will help get the wheat crop ready.

Meanwhile, a gathering of scientists had last week predicted a normal monsoon for South-East Asia this year. Although colder-than-average months of March and April have raised some doubts, overall indications are that monsoon will be close to normal that will also be the forthcoming Kharif crop as well. Economists point out that even a strong Rabi crop under way would fail to cool prices until there is a normal monsoon as poor rains can boost expectations of a shortfall thereby keeping prices of farm products high. 

The S&P CNX Nifty is currently trading at 5,704.80, lower by 24.30 points or 0.42%. The index has touched a high and low of 5,734.60 and 5,693.25 respectively. There were 17 stocks advancing against 32 declines on the index while one stock remained unchanged.

The top gainers of the Nifty were Cairn India up by 2.16%, HCL Tech up by 1.34%, HDFC Bank up by 1.01%, Reliance Communication up by 0.81% and GAIL India up by 0.66%.

Hero Honda down by 3.24%, BHEL down 2.63%, Grasim Industries down 2.23%, DLF and Kotak Bank down by 1.58% each were the major losers on the index.

All the Asian markets were trading in the red; Shanghai Composite slid 1.85%, Hang Seng declined 1.28%, Jakarta Composite dropped 0.38%, KLSE Composite trimmed 0.47%, Nikkei 225 plunged 1.07%, Straits Times tumbled 0.86%, Seoul Composite surrendered 0.45%and Taiwan Weighted was down by 0.84%.

 

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