Losses widen at Dalal Street; FMCG stocks bleed

Losses have just widened at Dalal Street as institutional investors continued to remain on sidelines in absence of any positive trigger, while eyeing the industrial output numbers for April.  However, this time around the Central Statistical Organization (CSO) is set to unveil a new set of index with 2004-05 as the base year and more items. The CSO will release the IIP (Index of Industrial Production) with the new base year as well as the old base year, which will continue for three months. Meanwhile, wobbly global cues were incompetent in providing any cues to the street. On the global front, the US markets managed to break a six-day losing streak, spurred by encouraging data. A report showing record U.S. exports in April eased some concerns about a stalled economic recovery, which had been weighing on the market. However, the Asian indices, barring KLSE Composite and Nikkei 225, edged lower in red ahead of the May month trade data from the China. The US future indices too were showing a downtick in the screen trade.

Back home, weak spells in the trade were the stocks belonging from the Fast Moving Consumer Goods (FMCG), Auto and Oil & Gas counters. The stocks belonging to the defensive FMCG space was pulverized for the second straight session owing to the profit booking at higher level since the space saw a good run in the past few session. Meanwhile  Auto stocks extending its loss were trading lower amid reports that car sales in India rose 7 percent in May, their slowest pace of growth in two years while expectations of further decline are rife as higher fuel prices, interest rates and vehicle costs would hit demand in the world's second-fastest growing vehicle market. Besides, that Oil & Gas stocks were trading lower as Brent crude rose 1.5 percent on Thursday, reaching a five-week high as OPEC's surprise failure to reach a deal on raising output stoked more fears of leaner supplies later in the year. Meanwhile, the April IIP growth came at 6.3% versus 13.1% Y-o-Y as per new series. While, under the old series, annual industrial output growth in April came at 4.4% versus 7.3% in March, much below the street expectation of 5.1%.

The BSE Sensex is currently trading at 18,332.18, down by 52.72 points or 0.29%. The index has touched a high and low of 18,399.02 and 18,308.21. There were 9 stocks advancing against 21 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap index was trading flat, while, Small cap index was up by 0.17%. 

The top gaining sectoral indices on the BSE were, HC up by 0.50%, IT up by 0.15%, CD up by 0.04%, Realty up by 0.02%, and TECk was up by 0.1%. While, FMCG down by 0.74%, Auto down by 0.58%, Oil and Gas down by 0.51%, Power down by 0.45% and PSU down by 0.28% were the top losers on the index.

The top gainers on the Sensex were Hindalco and TCS were up by 0.76%, ONGC up by 0.53%, Wipro up by 0.40% and Cipla was up by 0.34%.

On the flip side, Maruti Suzuki down by 1.58%, ITC down by 1.41%, Hero Honda down by 1.10%, Reliance Infra down by 0.98% and RIL down by 0.85% were the top losers on the index.

Meanwhile, domestic car sales in India expanded at the slowest pace in 24 months, posting a tepid growth of 7% to 1,58,817 units in the month of May against the 30 percent jump in the same month last year, according to the data released by the Society of Indian Automobile Manufacturers (SIAM). Sales of Automobile surged 30% in the financial year ended March 31, the fastest since 1999-2000, driven by a rapidly increasing aspirational middle class, easier availability of low-cost loans, introduction of new models and rising incomes in an expanding economy.

However, the demand for new vehicles has taken a hit in the recent past because of higher interest rates, non-availability of finance, rising fuel prices and higher prices of vehicles. The price of fuel was raised by a record 8.6% in May. The rampant inflation remained the biggest dampener as it compelled Reserve Bank of India to hike interest rates nine times since March last year.

The data released by SIAM also showed that motorcycle sales in the world's second-fastest growing auto market grew by 14.33% during the May month to 8,29,255 units from 7,25,311 units in the corresponding month last year. Total two-wheeler sales increased by 14.49% last month to 10,72,287 units from 9,36,555 units in May, 2010.

Sales of commercial vehicles jumped by 16.16% to 56,314 units from 48,479 units in the year-ago period while total sales of vehicles across categories registered a growth of 13.40% to 13,70,786 units in May, as against 12,08,820 units in the same month last year, according to SIAM.

The S&P CNX Nifty is currently trading at 5,503.35, down by 17.70 points or 0.32%. The index has touched a high and low of 5,521.45 and 5,495.30 respectively. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 1.63%, Sun Pharma up by 1.47%, IDFC up by 0.82%, Hindalco up by 0.79% and TCS up by 0.60%.

Reliance Capital down by 1.59%, Maruti Suzuki down by 1.44%, SAIL down by 1.40%, Sesa Goa down by 1.24% and Ambuja Cement down by 1.01% were the major losers on the index.

Most of the Asian markets were down in the red ; Shanghai Composite declined 0.20%, Hang Seng dropped 0.69%, Jakarta Composite edged lower by 0.15%, Straits Times trimmed 0.22%, Seoul Composite descended by 0.72% and Taiwan Weighted plunged 1.39%.

On the flip sides, KLSE Composite gained 0.42% and Nikkei 225 added 0.30% were the only gainers among the Asian pack.

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