WEAKNESS PERSISTS

Indian equity markets continue trading weak, amid the presentation of the railway budget for 2013-14 in parliament. Investors continued selling at  several blue chip counters, amid lingering worries about the near term economic outlook. The Sensex fell 0.67%, while the Nifty was also down by 39.25 points. In currency markets, rupee depreciated on Tuesday on account of month-end dollar demand from importers. On sectoral front, key railway stocks remain laggard in a listless market amid railways budget announcement. Automobile, capital goods and banking stocks were trading in red, while information technology, fast moving consumer goods and media, entertainment and technology stocks rallied. On global front, Asian markets were trading in red and the euro hit its lowest in nearly seven weeks against the dollar as an apparently deadlocked election in Italy raised the spectre of a resurgent euro zone debt crisis. Back home, the market breadth favoring negative trend; there were 1,698 shares on the losing side against 644 shares on the gaining side while 115 shares remain unchanged.

The BSE Sensex is currently trading at 19,201.90, down by 129.79 points or 0.67% after trading in a range of 19,293.49 and 19,179.55. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.23% and Small cap index down by 1.49%.

The top gaining sectoral indices on the BSE were, FMCG up by 1.26%, TECk up by 0.76% and IT up by 0.60%, while Auto down by 1.83%, Oil & Gas down by 1.71%, Capital Goods down by 1.58%, Metal down by 1.40% and PSU down by 1.24% were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.95%, ITC up by 1.92%, Hindustan Unilever up by 1.74%, Infosys up by 0.87% and TCS up by 0.70%.

On the flip side, Tata Motors down by 2.71%, ICICI Bank down by 2.42%, Hindalco down by 2.39%, ONGC down by 2.39% and Bajaj Auto down by 2.14% were the top losers on the Sensex.

Meanwhile, global rating agency, Standard & Poor's (S&P) sees Indian economic growth improving to 6.4% in FY14, which had earlier threatened to downgrade the country's sovereign rating to junk. As per the rating agency, 'the increased government welfare spending because of the next general elections, improvement in private consumption, lower interest rates and a better show by agriculture will lead to the growth number going up to 6.4% in FY14.'

Further, according to S&P, the growth number is also expected to go up further to 7.2% in FY15 as mining and power sectors will also start showing improvement. Moreover, it also retained its growth forecast for the current fiscal at 5.5%, half-a-percentage-point above the readings by the Central Statistical Organization (CSO).

However, as per rating agency's credit analyst Geeta Chugh, the relative uptick in growth has already been factored in the sovereign rating, which is the lowest investment grade rating and the worst amongst the BRIC. The recent measures taken by the government has boosted the investor's confidence and will lead to a gradual economic recovery, but cautioned that the agency would look for progress on the implementation front. 

Referring to specifics measures like the set-up of the Cabinet Committee on Investments (CCI) and a new land acquisition Bill, which are likely to be passed in the Budget session, Geeta said that the real effect of these measures, which have boosted investor confidence, will be visible only starting the second half of 2013. Further, economic recovery will take at least six to nine months and it will not be a V-shaped sharp recovery but a gradual one.

The CNX Nifty is currently trading at 5,815.50 down by 39.25 points or 0.67% after trading in a range of 5,838.85 and 5,807.10. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.77%, HUL up by 1.90%, ITC up by 1.79%, DLF up by 1.27% and JP Associates up by 1.25%.

On the flip side, IDFC down by 2.80%, Tata Motors down by 2.74%, Hindalco down by 2.39%, ICICI Bank down by 2.35%, and Bajaj-Auto down by 2.22%, were the major losers on the index.

Asian equity indices were trading in red; Shanghai Composite was down by 0.26%. Hang Seng declined 0.80%, Jakarta Composite dropped 0.91%, KLSE Composite dipped 0.17%, Nikkei 225 tumbled 2.13%, Straits Times contracted 0.72%, KOSPI Composite decreased 0.47% and Taiwan Weighted was down by 0.84%