SOUTH BOUND JOURNEY

South-bound journey continued for yet another day with Nifty breaching crucial 4,950 mark in early trade following weak regional peers. Asian counters remained choppy as investors' at large lacked conviction to open fresh bets after reports showed that leading US bank JPMorgan suffered a $2 billion trading loss from a failed hedging strategy, as positions in credit securities proved riskier than expected. Investors also remained skittish amid the political uncertainty in European region as stakes are significantly high for the European Union to keep Greece afloat as the EU is now Greece's biggest creditor and a Greek default means euro zone taxpayers will take a hit. Back home, the sentiments weigh down on ministerial panel's further deferral of long overdue legislations related to insurance, coal and competition law. However, SKS microfinance shot up over 15 percent after the government cleared the Microfinance Bill. It has made the Reserve Bank of India as the regulator for all micro finance companies (MFIs). All the sectoral indices on the BSE traded lower. Banks, software, realty, technology and capital goods stocks were witnessing the selling pressure in early trade. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 585 shares on the gaining side against 942 shares on the losing side while 66 shares remained unchanged. 

The BSE Sensex opened at 16,355.59; about 65 points lower compared to its previous closing of 16,420.05, and has touched a low of 16,395.12 and 16,338.35 respectively.

The index is currently trading at 16,340.89 down by 79.16 points or 0.48%. There were 11 stocks advancing against 29 declines on the index.

The overall market breadth has made a negative start with 36.72% stocks advancing against 59.13% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined 0.51% and 0.39% respectively.

The major losing sectoral indices on the BSE were, IT down by 0.92%, Realty down by 0.91%, TECk down by 0.83%, CG down by 0.68% and HC down by 0.67%, while there were no gainers on the index.

The top gainers on the Sensex were Hero MotoCorp up by 0.98%, Bajaj Auto up by 0.81%, NTPC up by 0.67%, BHEL up by 0.50% and Cipla up by 0.29%.

On the flip side, Maruti Suzuki was down by 2.66%, Infosys was down by 1.32%, ONGC was down by 1.21%, Sun Pharma was down by 1.13% and L&T was down by 1.11% were the top losers on the Sensex.

Meanwhile, India can sustain a 3% current account deficit if it successfully projects an image of being a country that is growing fast and welcomes foreign and portfolio investment, states the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia. Deputy Chairman is also of the view that to project such an image India has to address many issues like power, fuel subsidies, etc.

India currently has a CAD which is hovering around the 4% mark largely due to the substantial rise in oil imports. Exports have done better than expected but on the back of record rise in imports, the country has been left with a trade deficit of $185 billion in the last fiscal.

However Ahluwalia feels that if India can bring about reforms like deregulating oil prices, allowing FDI in aviation and multi-brand retail, the CAD can be tamed. Ahluwalia is also of the opinion that energy prices have to be aligned with economic realities otherwise energy efficiency cannot be pursued.

On the growth prospect, Deputy Chairman has stated that even without any fresh doze of reforms, the economy can grow at 9% or more. "I believe with the structure that we have, it is possible to grow at 9%, even if no new reforms are done immediately. But the most important thing is to take care of these executive decision-making issues".

The S&P CNX Nifty opened at 4,938.85; about 27 points lower compared to its previous closing of 4965.70, and has touched a high and a low of 4,954.05 and 4,936.70 respectively.

The index is currently trading at 4,940.50, lower by 25.20 points or 0.51%. There were only 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 0.92%, BPCL up by 0.89%, Hero MotoCorp up by 0.87%, JP Associates up by 0.75% and NTPC up by 0.67%.

On the flip side, Maruti Suzuki down by 2.84%, SAIL down by 1.84%, Ambuja down by 1.44%, Grasim down by 1.35% and Sun Pharma down by 1.35%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 5.92 points or 0.25% to 2,404.31, Hang Seng was down 237.74 points or 1.18% to 19,989.54, Jakarta Composite was down 31.98 points or 0.77% to 4,101.65, KLSE Composite was down 1.14 points or 0.07% to 1,586.92, Nikkei 225 was down 53.93 points or 0.60% to 8,955.72, Straits Times was down 20.84 points or 0.72% to 2,882.76, KOSPI Composite was down 28.70 points or 1.48% to 1,916.23 and Taiwan Weighted was down by 92.06 points or 1.23% to 7,391.95.