Market remains choppy; BSE Realty Index slips 2%

At 14.20 PM, the S&P BSE Sensex slipped 16 points at 25,864 and the CNX Nifty dipped 8 points at 7,719

Markets remain range bound during late noon trades as investors have turned cautious on lower industrial growth and rising CPI in July. Moreover, weak first quarter earnings from capital goods major BHEL also soured investor sentiment.

 

At 14.20 PM, the S&P BSE Sensex slipped 16 points at 25,864 and the CNX Nifty dipped 8 points at 7,719.

 

The broader market, further, underperformed key benchmark indices as the BSE Mid-cap and Small-cap indices slumped over 2%.

 

Foreign portfolio investors (FPIs) bought shares worth a net Rs 370.83 crore on Tuesday, 12 August 2014, as per provisional data from the stock exchanges.

 

Meanwhile, Nomura has raised the BSE Sensex target to 30,310 by end of August 2015. The target implies a 17% gain from Tuesday's BSE closing level.

 

The overall market breadth on the BSE was poor with 2047 advances and 731 declines.

 

ECONOMY:

 

Showing signs of sluggishness in the economy, growth rate of industrial production slowed to 3.4% in June, as against 5% in May, mainly due to lower output of consumer goods. The output, as measured by the Index of Industrial Production, had contracted by 1.8% in June, 2013.

 

Pushed by food items, the Consumer Price Index (CPI)-based inflation rose to 7.96% in July from 7.46% in June, which was an all-time low since the new series was launched in January 2011.

 

The official data, issued on Tuesday, justified the Reserve Bank of India’s stance of not cutting the policy rate at its review earlier this month. However, inflation in July was still the third lowest in the series. Beside June 2014, it was only in January 2012 that inflation was lower than this July. In January 2012, it was 7.55%.

 

INDIAN RUPEE: 

 

The rupee is trading at 61.25 versus its Tuesday close of 61.08/09. Traders say higher-than-expected jump in CPI is hurting the rupee.

 

ASIAN MARKETS:

 

Asian shares eked out modest gains on Wednesday, as investors remained cautious after downbeat data from China and Japan and as the crisis in Ukraine threatened a fragile economic recovery in Europe. Japan's Nikkei share average ended up 0.4 percent higher, Shanghai shares ended flat with a positive bias while Hang Seng gained 0.8%. 

 

BUZZING SECTORS & STOCKS:

 

The BSE Realty index plunged over 5% while the Capital goods index slumped over 3% followed by Power, Metal, Bankex, Oil & Gas and Auto indices. The BSE FMCG index gained nearly 2% while IT and Pharma index was up over 0.5%.

 

BHEL has slipped nearly 8% after a sharp 58% year-on-year drop in its net profit at Rs 194 crore for the quarter ended June 30, 2014 (Q1), mainly due to decline in sales from power and industry segments. L&T also slipped over 2.5%.

 

Coal India, Tata Power and Hindalco are other Sensex losers, all down over 3%. HDFC, ITC, HUL, Sun Pharma and TCS are among the top Sensex gainer, all up between 1-3%. 

 

Shares of real estate and banking sectors are under pressure, falling by up to 6% on the bourses, after retail inflation as measured by CPI accelerated to 7.96% in July from 7.46% in June. Therefore, RBI is likely to maintain a cautious stance in the next policy too.

 

Unitech, Indiabulls Real Estate, HDIL and DLF from real estate sector are down 3-7% on the NSE. Canara Bank, Federal Bank, Bank of Baroda and Bank of India from the banking space down 3% each.

 

Birla Corporation gained over 7.5% after the MP Birla group flagship company Birla Corporation has more than doubled its net profit for the first quarter of the current fiscal at almost Rs 100 crore as against Rs 45.99 crore in a year ago period.

 

Apollo Hospitals gained nearly 3% at Rs 1,110 after the company posted a 4.8% increase in its standalone net profit to Rs. 82.74 crore for the quarter ended June 30, 2014.