Markets lose some more weight; realty plunge

The weakness that got imbibed in the domestic markets in early trade continues to persist in the noon trade. With benchmarks trading lower by about half a percent. The broader indices that have surged in last session, too are finding difficult to hold ground. Barring the IT and auto sectors all are others are showing weakness. The global cues too remained unsupportive and majority of the Asian markets were either flat or in negative terrain, while the European markets too have made a weak start. However there was a good news from the economy front, India's services sector picked up steam in June, with activity rebounding from a 20-month-low in May. The seasonally adjusted HSBC Markit Business Activity Index based on a survey of 400 firms, rose to 56.1 in June after hitting 55.0 in May. The services sector contributes nearly 60 percent to the overall economy and it is the 26th straight month that the index has stayed above the 50 mark that divides growth from contraction. Back on street, the realty sector that surged in previous session on value picking is suffering profit taking today, being the laggard among the sectoral gauges.

The BSE Sensex is currently trading at 18,724.28 down by 90.20 points or 0.48% after touching high and low of 18,837.88 and 18,695.40 respectively. There were 12 stocks advancing against 18 declines on the index.

The broader indices were mixed; the BSE Mid cap index was down by 0.36%, while the Small cap index was marginally higher by 0.02%. 

On the BSE sectoral space, Auto up by 0.76% and IT up by 0.18% were the only gainers, while Realty down by 1.62%, Power down by 1.42%, FMCG down by 1.22%, Consumer Goods (CG) down by 1.09% and Oil and Gas down by 0.93% were the major losers.

The top gainers on the Sensex were M&M up by 1.03%, Bajaj Auto up by 0.80%, Tata Steel up by 0.80%, Tata Motors up by 0.70% and Wipro was up by 0.59%.

On the flip side, BHEL down by 4.12%, RCom down by 2.29%, Rel Infra down by 2.11%, RIL down by 1.78% and DLF down by 1.67% were the major losers on the index.

Breaking the declining trend of foreign investment inflow into India, foreign direct investment (FDI) flow into the country has doubled in May from year ago, touching $4.66 billion against $2.21 billion in May last year. According to the ministry's note "The FDI equity inflows of $4.664 billion, received in the month of May, 2011, represent the second highest FDI equity inflow, received in any month, for the last eleven financial years (i.e. since April, 2000). They also represent an increase of nearly 111% over the FDI equity inflows of $2.213 billion received in the same month last year (i.e. May, 2010), as also the highest FDI equity inflow, in the last eleven financial years (i.e. since the financial year 2000-2001), received in the month of May". 

The FDI inflow into the country had seen a continues decline during the period of 2009-10 and 2010-11, it declined by 5% and 25% respectively, despite the robust growth of 8-8.5% of GDP. This declining trend in FDI had raised concerns of the government and industry, because, at the same period of time, most of the emerging economies had been able to attract good amounts of FDI inflow. In response to the decline in FDI, government had taken number of steps to simplify the FDI policy in order to attract more foreign investment in the economy.

There has been continues and sustained effort to make the FDI policy more liberal and investor-friendly. Significant rationalization and simplification of the policy has, therefore, been carried out in the recent past, the industry ministry said in a statement on July 4. The FDI equity during the first two months of 2011-12, are $7.785 billion, showing the increase of around 77% over the FDI equity inflow of $4.392 billion for the corresponding period previous year i.e. April-May, 2010.

The S&P CNX Nifty is currently trading at 5,622.35, lower by 28.15 points or 0.50% after touching a high and low of 5,659.85 and 5,612.30 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were SAIL up by 2.27%, BPCL up by 1.20%, HCL Tech up by 0.98%, Tata Steel up by 0.87% and M&M was up by 0.82%.

BHEL down by 4.28%, Cairn India down by 2.44%, RCom down by 2.14%, IDFC down by 2.10% and Reliance Infra down by 2.01% were the major losers on the index.

Asian markets are trading mixed; Shanghai Composite was up by 0.13%, Nikkei 225 gained 0.07%, Seoul Composite added 0.77% and Taiwan Weighted was up by 0.11%.

On the other hand, Hang Seng was down by 0.16%, Jakarta Composite slid by 0.76%, Straits Times was down by 0.81% and KLSE Composite was lower by 0.09%,

The European markets are trading weak as France's CAC 40 was down by 0.20%, Germany's DAX lost 0.19% and London's FTSE was tad lower by 0.01% 

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