Local bourses trade near their intra day’s low; metal stocks pose resilience

Local bourses after making a promising start and soon after than slipping into early deals have now enlarged their losses despite positive global leads. Concerns about inflation and the impact of the latest hike in interest rates on India Inc's margins in the near future appears to be prompting a section of investors to indulge in some selling this morning, which were already cautious at these higher levels, after witnessing longest losing streak of the decade. Moreover, Crude Oil prices which substantially cooled off in the last trading session were at the boil again. US crude futures were up $1.58 or 1.63% at $98.76 a barrel on Monday, putting a negative impact on the investor sentiment since India imports 70 per cent of its crude oil requirement. High oil prices have raised concerns about widening current account deficit (CAD) and about higher oil subsidy bill for the government apart from its negative impact on the government's fiscal position. However, on the global front, an unexpectedly strong report on US payrolls which helped US equities bounce back on Friday from four days of losses has lent some support to the Asian shares which are mostly trading in green at this point of time. The US futures too were showing an uptick on the screen trade. Back Home, Stocks from Auto, Bankex, Information Technology counters are witnessing strong blow, while stocks from Metal Space are the only ones that are showcasing immense resilience. The decline of the two of Index heavyweights --ICICI Bank and Reliance Industries is also adding to the losses of the bourses. Both the barometer indices, i.e. the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) and the 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) were trading near their day's low and were down by over 0.50% each. Broader indices too edged lower by over 0.05% each. The overall market breadth on BSE was in the favour of advances which outnumbered declines in the ratio of 1080:1049, while, 92 shares remained unchanged.

The BSE Sensex is currently trading at 18,394.71, down by 124.10 points or 0.67%. The index has touched a high and low of 18,643.58 and 18,367.21 respectively.  There were 4 stocks advancing against 26 declines on the index.

The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 0.07% and 0.14% respectively. 

The top losing sectoral indices on the BSE were, Auto down by 1.38%, Bankex down by 1.33%, Information Technology (IT) down by 0.79%, Capital Goods (CG) down by 0.57% and Public Sector Undertaking (PSU) down by 0.53%. On the flip side, Metal up by 0.18% was the lone gainer on the index.

The top gainers on the Sensex were Bharti Airtel up by 1.27%, Hindalco up by 1.14%, Tata Power up by 0.76%, Sterlite Industries up by 0.18% and Jindal Steel was up by 0.14%.

On the flip side, Jaiprakash Associates down by 2.43%, Tata Motors down by 2.33%, HDFC Bank down by 2.09%, Hero Honda down by 1.93% and Maruti Suzuki down by 1.64% were the top losers on the index.

Meanwhile, foreign direct investments in India are demonstrating a worrying trend of late as they prolonged the downward trend for the third successive month in March. FDI in India declined by 11% year on year to $1.07 billion against $1.2 billion received in the corresponding period last year. The ongoing sovereign debt crisis in the Europe is believed to be one of the major causes of the drying foreign direct investment in India as European nations are one of the major investors in India.

In the fiscal year ended March 2011, the foreign inflows wilted by 25% to $19.43 billion against $25.83 billion received during fiscal year ended March 2009-10 which, too, was lower than $27.33 billion invested in the previous fiscal. This makes it very important for the Department of Industrial Policy and Promotion (DIPP), the nodal agency on FDI policies, to tweak its policies to attract overseas investments.

Mauritius continued to be the preferred route for directing FDI into India. About 36% of FDI came via Mauritius in the first 11 months of the last financial year, mainly because most of the investors want to take advantage of the double taxation avoidance agreement between Mauritius and India and Mauritius-based investors do not have to pay capital gains tax in India. Other nations which remained major investors in India were Singapore, United States, United Kingdom, Netherlands, Japan, Germany and the UAE. Meanwhile, foreign institutional investors (FIIs) invested around $3.6 billion in India since the start of calendar year 2011.

The S&P CNX Nifty is currently trading at 5,508.30, down by 43.15 points or 0.78%. The index has touched a high and low of 5,586.05 and 5,502.40 respectively.  There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Hindalco up by 1.14%, GAIL up by 1.10%, Bharti Airtel up by 0.93%,  ACC up by 0.88% and Cairn India up by 0.82%.

JP Associates down by 2.60%, Tata Motors down by 2.30%, HDFC Bank down by 2.04%, Axis Bank down by 2.00% and Maruti Suzuki down by 1.97 % were the major losers on the index.

Asian markets were trading mostly in the green; Hang Seng gained 0.92% , KLSE Composite added 0.18%, Straits Times surged 1.33%, Seoul Composite rose 0.21% and Taiwan Weighted increased 0.80%.

On the flip side, Shanghai Composite lost 0.29%, Jakarta Composite slid 0.22% and Nikkei 225 shed 0.49%.

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