MARKETS REMAIN WEAK

Indian equity markets continued trading weak amid lack of major triggers on global and domestic front. Investors continue to stay on the sidelines as feeble movements in Asian markets and worries about rising crude oil prices are contributing to dampen their sentiments. Markets still hopeful for some reforms or cut in diesel price by government, after the current monsoon session in the parliament. In currency markets, Indian rupee continued trading lower against American currency on the back of dollar's strength against other overseas currencies. On sectoral front oil stocks were finding some support. A few stocks from consumer durables, healthcare and FMCG sectors edged higher. Bank and realty stocks were mostly trading weak. Metal, capital goods and information technology stocks were also mostly subdued. In global markets, most of the Asian shares were trading in red. Back home, the market breadth favoring positive trend; there were 1,233 shares on the gaining side against 1,137 shares on the losing side while 121 shares remained unchanged.

The BSE Sensex is currently trading at 17,749.72 down by 33.49 points or 0.19% after touching a high of 17820.07 and low of 17746.06. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up by 0.01%, while Small cap index was up by 0.12%.

The top gainers on the BSE sectoral space were, Oil & Gas up by 0.64%, CD up by 0.33%, FMCG up by 0.16% and HC up by 0.08%, while Bankex down by 1.06%, Realty down by 0.79%, CG down by 0.63%, Metal down by 0.54% and Power down by 0.51% were top losers on the index.

Bharti Airtel up by 1.92%, Mahindra & Mahindra up by 1.30%, Cipla up by 1.02%, Bajaj Auto up by 0.99%, Reliance up by 0.95% were major gainers on the Sensex, while Jindal Steel down by 2.73%, Tata Motors down by 1.75%, ICICI Bank down by 1.32%, Sterlite Industries down by 1.20% and SBI down by 1.16% were the major losers on the index.

Meanwhile, India's growth story in recent past which has been substantially driven by large infrastructure investments has been hit badly. Reserve Bank of India, in its 'Annual Report 2011-12', has blamed nearly 50% drop in new investments in large projects, to be the primary reason behind continued growth deceleration of the Indian economy in the current fiscal. Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter and fiscal 2011-12 at 5.3% and 6.5% respectively.

The Reserve Bank's collation from banks and financial institutions underscored that envisaged total fixed investments in new projects that were sanctioned financial assistance during 2011-12 have slipped by 46% to about Rs 2.1 trillion from Rs 3.9 trillion a year ago. This drop was mainly led by infrastructure and metals sectors. The envisaged investment in infrastructure dropped by a whopping 52% to Rs 1 trillion in FY12 from Rs 2.2 trillion in FY11, with power and telecom accounting for most of this fall, the report pointed.

While, the investment in the telecom sector has dried up, that in roads, ports and airports has also decelerated sharply, the report added. Road projects have also slowed down due to problems relating to land acquisition, legal and environmental clearances as also tightening of financial conditions. Road tendering activity has suffered significantly in Q1 of 2012-13 after a record tendering by NHAI in 2011-12.

Gross bank credit to infrastructure outstanding as of April 2012 was Rs 6.2 trillion. Data on sector-wise gross deployment of bank credit shows that its year-on-year growth slipped by 14% in FY12 compared to 38% growth in FY11. Meanwhile, the exposure of banks to the power sector is about Rs 3.3 trillion as per the sector-wise deployment of credit obtained from 47 scheduled commercial banks that account for 95 per cent of total non-food credit.

The S&P CNX Nifty is currently trading at 5,377.10, down by 9.60 points or 0.18% after trading in a range of 5,399.15 and 5,374.70. There were 20 stocks advancing against 30 declines on the index.

The top gainers on the Nifty were Bharti Airtel up by 1.94%, Ranbaxy up by 1.51%, Mahindra & Mahindra up by 1.40%, Cairn up by 1.21% and Cipla up by 1.16%. While, Jindal Steel down by 2.56%, PNB down by 2.54%, Axis Bank down by 2.26%, Tata Motors down by 1.85% and Bank of Baroda down by 1.80% were top losers on the index.

Most Asian indices were trading in red; Kospi Composite Index down by 0.10%, Straits Times down by 0.20%, Hang Seng index down by 0.39%, Shanghai Composite down by 1.16% and Taiwan Weighted down by 0.12%, while Nikkei 225 up by 0.16%, and KLSE Composite up by 0.03% were the only gainers.