Benchmarks slip into the red; oil & gas, FMCG down

Local equity markets surrendered all their gains clocked in the early part of trade and have slipped into the red at this point of time on the back of negative global cues. Other key Asian markets were trading in the mixed range and the US index futures also remained subdued in the screen trade. Meanwhile, the cuts on the local indices were modest on the back of sustained value picking in healthcare, realty, consumer durables, banking and metal shares from investors. Healthcare sector witnessed buying interest after Sun Pharma, a leading drug maker reported 12% rise in the quarterly profit on consolidated basis. On the other hand, oil & gas, FMCG, power, technology and public sector undertakings lot failed to get any respite from bears. Broader markets, however, managed to hold their neck in the green with BSE Mid cap and Small-cap indices gaining 0.54% and 0.59%, respectively. The market breadth on the BSE remained in favour of advances in the ratio of 1455:912 while 94 scrips remained unchanged.

The BSE Sensex slipped 28.79 points or 0.16% at 18,237.31. The index has touched a high of 18,380.17 and a low of 18,199.52, respectively.

The BSE Mid cap and Small-cap indices gained 0.54% and 0.59%, respectively.

The top gainers in the BSE sectoral space were Healthcare (HC) up 1.48%, Realty up 1.05%, Consumer Durables (CD) up 0.91%, Bankex up 0.30% and Metal up 0.20%.

On the flip side, Oil & Gas down 0.71%, FMCG down 0.50%, Power down 0.32%, TECk down 0.25% and Public Sector Undertaking (PSU) down 0.04% were the major losers in the BSE sectoral space.

The top gainers on the Sensex were DLF up 1.95%, Cipla up 1.82%, Sterlite Inds up 1.28%, HDFC up 0.87% and M&M up 0.84%.

On the flip side, ONGC down 2.42%, Rel Infra down 1.89%, ITC down 1.24%, Bharti Airtel down 1.14% and RCom down 0.88% were the major losers on the index.

Meanwhile, the government is expected to revise its GDP forecast of 9% for the current financial year. The downward revision is expected because of the rising global commodity prices and high inflation. Earlier, many international and national organizations had also revised downward their forecast of growth on account of high inflation, the steepest being the Goldman Sachs that had cut growth estimate for the 2011-12 by over a percent to 7.8% from 8.7% estimated originally. Another international organization, OECD has projected the Indian economy to expand 8.5% in 2011-12, much lower than the growth of 9.6 percent witnessed in 2010-11 financial year. Two other international bodies, the International Monetary Fund and the World Bank too had forecast that India's economy would grow at 8 per cent and 9 per cent, respectively. While, on the domestic front the Reserve Bank of India has reduced the growth target of Indian economy at about 8% in the current financial year after it increased the policy rates for the ninth time in over a year.

The mid-term review of the economy was due in October 2011, but the finance ministry has decided to review its forecast next month itself because of the fast changing economic conditions. Chief Economist Advisor Kaushik Basu said, "This year, because of changing global scenario and many other important organisations having downgraded India's growth rate, we have decided that we would go back and take another look at our (GDP) numbers in mid-June". However, Basu expects a small revision in the forecast. Finance Minister has also hinted that high inflation and any further rise in crude oil prices may pull down India's economic growth to 8% from a projected 9%.

The Wholesale Price Index inflation marginally decreased to 8.66% in April from over 9.04 % in March but may accelerate again after the increase in petrol prices. The government is likely to increase the prices of diesel, kerosene and LPG, in order to reduce the revenue losses of Oil Marketing Companies.

The S&P CNX Nifty dipped 8.90 points or 0.16% at 5467.20.  The index has touched a high and a low of 5509.30 and 5458.60, respectively.

The top gainers on the Nifty were Sun Pharma up 3.38%, Dr Reddy's up 2.23%, DLF up 2.11%, Cipla up 1.83% and Sterlite Inds up 1.43%.

On the flip side, ONGC down 2.31%, Cairn India down 2.26%, Rel Infra down 2.21%, Bharti Airtel down 1.54% and SAIL down 1.36% were the major losers on the index.

Rest of the Asian markets were trading in the mixed range. Shanghai Composite gained 0.63%, Hang Seng soared 0.50%, Straits Times climbed 0.60% and Taiwan Weighted added 0.16%; while Jakarta Composite lost 0.07%, KLSE Composite declined 0.03%, Nikkei 225 dipped 0.11% and Seoul Composite dropped 0.34% .

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