WEAKNESS PERSISTS

Following a weak start, Indian equity markets continued negative trade in the late morning session amid sustained selling on blue chip counters. Meanwhile, investors remained bearish amid a lack of fresh triggers and were reluctant to build up positions. In currency markets, rupee depreciated against dollar on the back of increased demand for the US currency from oil importers. On sectoral front, metal, consumer durables, capital goods, power, FMCG and realty stocks were mostly trading notably lower, while only oil stocks were trading marginally higher, following a hike in petrol price. Moreover, Bajaj Auto trading notably lower after reporting 3% decline in February 2013 sales. On global front, Asian markets mostly fell on Monday, after US lawmakers failed to prevent the imposition of $85 billion in spending cuts that kicked in at the end of last week. Back home, the market breadth favoring negative trend; there were 1,629 shares on the losing side against 666 shares on the gaining side while 102 shares remain unchanged.

The BSE Sensex is currently trading at 18,808.96, down by 109.56 points or 0.58% after trading in a range of 18,930.86 and 18,760.41. There were 6 stocks advancing against 23 declines and one remains unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.00% and Small cap index has lost 1.41%.

The top gaining sectoral index on the BSE was, Oil & Gas up by 0.02%, while Metal down by 2.14%, Consumer Durables (CD) down by 1.93%, Capital Goods (CG) down 1.73%, Auto down 1.16% and Realty down by 1.15% were the top losers on the BSE.

The top gainers on the Sensex were Dr Reddys Lab up by 1.38%, Sun Pharma up by 1.01%, Reliance up by 0.41%, TCS up by 0.36% and ICICI Bank up by 0.25%.

On the flip side, Jindal Steel down by 3.16%, Sterlite Industries down by 2.95%, Hindalco down by 2.58%, Bajaj Auto down by 2.37% and L&T down by 2.15% were the top losers on the Sensex.

Meanwhile, joining the government's resolve to get rid of impediments to economic growth, Planning Commission Deputy Chairman Montek Singh Ahluwalia said 6.5 percent economic growth projection for FY14 is reasonable. He said that 'if you have taken corrective steps needed to get rid of impediments to growth, projecting 6.5 percent is not too much. The 6.5 percent economic growth is not that unreasonable.'

As per Ahluwalia, for the next fiscal, 6.5 percent economic growth would be achievable in the backdrop that India's last decade long-term average GDP growth was around 7.3-7.4 percent.

Commenting on whether the Union Budget is the right response to the challenge economy is facing at present; he said the key challenges for Indian economy are huge micro imbalance, very large fiscal deficit and widening current account deficit. Therefore, the FY14 Budget is focused to get micro-economic balance and enhancing the foreign currency inflow into the country, which is important to reduce the fiscal deficit.

On whether finance minister went for a big cut of around Rs 92,000 crore in Plan expenditure to reduce the current financial year's fiscal deficit to 5.2 percent of GDP, he said this happened because of strict enforcement of rules by the finance minister.

On doubts whether the lesser Plan expenditure would hurt economic growth prospects, he suggested that economic growth will not depend only on government spending and by 'the restraint on government expenditure has to be offset by big increase in private investment and public sector investment which is not in the budget. If that happens, the growth will take place.'

The CNX Nifty is currently trading at 5,681.65 down by 38.05 points or 0.67% after trading in a range of 5,712.00 and 5,663.60. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Dr Reddy's up by 1.10%, Sun Pharma up by 1.06%, BPCL up by 0.86%, TCS up by 0.34% and Reliance up by 0.28%.

On the flip side, Ambuja Cement down by 4.47%, ACC down by 3.45%, Jindal Steel down by 3.18%, Reliance Infra down by 2.86% and Sesa Goa down by 2.86% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite tumbled 3.27%, Hang Seng crumbled 1.53%, Jakarta Composite declined 0.88%, KLSE Composite slipped 0.07%, Straits Times dropped 0.66%, KOSPI Composite contracted 0.76% and Taiwan Weighted was down by 1.22%.

On the flip side, Nikkei 225 was up by 0.41%.