MARKETS CUT LOSSES

Indian equity markets have cut short substantial losses as some support emerged to the benchmarks at lower levels. Much of losses were limited by the stocks belonging from Fast Moving Consumer Goods, Oil & Gas and Realty counters, which were slugging amidst the lackadaisical trade, were holding their fort prominently in green. However, extending its declining for third consecutive session, 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, shedding over 30 points, is currently holding above the 17350 level, similarly widely followed index of National Stock Exchange (NSE), Nifty, trading in proximity to its neutral line, is off its 5250 mark. Meanwhile, the broader indices too gaining some traction are holding their head above the water in green.

The mood at Dalal Street since the start of the trade remained downbeat mainly on account of P Chidambaram's Vijay Kelkar Panel submitted fiscal report, which underscored that in worst case scenario, without any action on subsidies, fiscal deficit could balloon up to 6.1 per cent of GDP in the current year. However, gloomy start of the European markets, too could add to the pressure of equity markets going further in the session.

European markets got off to pessimistic start after Moody's Investors Service downgraded European Union's rating outlook to "negative" and Andalusia joined Spain's 'bailout club' by seeking 1 billion euros in emergency lifeline from the government. Meanwhile, most of regional counterparts have mostly dived deeper in negative terrain.

Closer home, the BSE Sensex is currently trading at 17,353.64, down by 30.76 points or 0.18% after touching a high of 17378.68 and low of 17,315.76. 10 stocks were advancing against 20 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.01% and 0.03% respectively.

The top gainers on the BSE sectoral space were, FMCG up by 0.50%, Oil & Gas up by 0.46%, Realty up by 0.39%, CD up by 0.25% and Power up by 0.15%. While IT down by 0.52%, TECk down by 0.30%, PSU down by 0.22%, Bankex down by 0.15% and Metal down by 0.11% were the top losers on the index.

The top gainers on the Sensex were Tata Steel up by 1.42%, Reliance up by 1.14%, Tata Motors up by 0.82%, HUL up by 0.67% and SBI up by 0.53%. On the flip side, HDFC down by 1.45%, Cipla down by 1.30%, ONGC down by 1.26%, Tata Power down by 1.18% and NTPC down by 1.00% were the top losers on the Sensex.

Meanwhile, Agriculture Minister, Sharad Pawar has stirred the proposal for consideration of cutting interest rate on crop loans before the Empowered Group of Ministers (EGoM) on drought. It is one of the major proposals to give financial assistance on crop loan, especially those rescheduled as term loan due to drought in some states.

The drought hit areas where farmers have taken crop loans are rescheduled into term loans due to their inability to pay. They may be charged lower interest rate at 7 % from 12 % to reduce their burden. During crisis like drought, the recovery is done by rescheduling the crop loan converted into a term loan and farmers get 3 years time to repay.

The monsoon is deficient in the country by 12%. The poor monsoon especially in 4 states: Karnataka, Gujarat, Maharashtra and Rajasthan have confirmed drought in more than 390 taluks.

 The S&P CNX Nifty is currently trading at 5245.60, down by 8.15 points or 0.16% after trading in a range of 5,252.75 and 5,234.80. There were 19 stocks advancing against 30 declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were Power Grid up by 2.34%, Tata Steel up by 1.56% Reliance up by 1.38%, Reliance Infra up by 1.10% and DLF up by 0.93%. On the flip side, IDFC down by 2.27%, HDFC down by 1.69%, Cipla down by 1.25%, Ambuja Cement down by 1.24% and Tata Power down by 1.23% were the major losers on the index.

Most of the Asian indices were mostly trading in red; Nikkei 225 declined 0.10%, Hang Seng index slid 0.21%, Shanghai Composite descended 0.88%, Kospi Composite Index shed 0.29%, KLSE Composite lost 0.02% and Jakarta Composite surrendered 0.20%, while Taiwan Weighted inched up by 0.01% and Straits Times inched up by 0.03% were the gainers.

European markets got off to negative start; France's CAC 40 declined 0.22%, Germany's DAX lost 0.37% and UK's FTSE 100 slid 0.50%.