Indian equities continue its lackadaisical trade in red

Indian equities continued its lackadaisical trade in the late afternoon session below neutral line in absence of buying among investors who stayed away amid developing pessimism in local as well as in global markets. Jittery investors lacked conviction to build positions as worries over the outlook of markets intensified amid heightened uncertainty over Europe’s future and also amid the gloomy domestic macro-economic headwinds. In the fight between bulls and bears to gain control over the market, bulls were seen trying hard to gain control but bears left no chance to pounce them and mark rally in red. Traders were seen piling up position in FMCG sector while selling was witnessed in Metal, Power and Capital Goods sector.

Tata Steel, Sesa Goa, Jindal Steel, JSW Steel, Hindalco and NMDC from Metal counters were seen trading weak in red pulling the markets down. Reliance Power, Tata Power, Thermax, Siemens, NTPC and Crompton Greaves from Power pack were trading in red exerting pressures on the market. BHEL, L&T, Punj Lloyd and Thermax from Capital Goods space were trading in red inching the markets lower. Industry heavyweight RIL was trading weak with cut off around more than one percent helping the markets drift lower. However, ITC, HUL, Dabur India and Marico from FMCG space were trading firm in green giving the much needed support for the markets.

In the scrip specific development, SKS Microfinance was firm in green after the Reserve Bank of India allowed microfinance institutions to raise up to $10 million through external commercial borrowings, as against the earlier limit of $5 million. Tech Mahindra and Mahindra Satyam rose on reports that these firms are close to appointing merchant bankers for a merger plan. Rohit Ferro-Tech shot up after reports that the board of directors of the company will be meeting on December 20, 2011, to consider a preferential issue of equity shares. KingFisher Airline was trading weak in red on reports that the cash-strapped carrier has not deposited with the government most of the income tax it deducted from its employees' salaries for the last two fiscal years.

On the global front, all Asian markets were seen trading on a mix note while the European markets were too trading mix on pessimistic note.  ECB President’s remarks that the European economic outlook faced substantial downside risks intensified doubts about a solution to Europe's debt woes. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,600 and 15,300 levels, respectively. The market breadth on the BSE was in favor of declines in the ratio of 846:1787 while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 15,293.96 down by 85.38 points or 0.56% after trading as high as 15,448.13 and as low as 15,213.74. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 1.47% while Small cap plummeted 1.25%.

On the BSE sectoral space, FMCG up 0.72% was the only gainer while Metal down 2.72%, Power down 2.14%, Capital Goods down 2.06%, Auto down 2.00% and Realty down 1.75% were the major losers in the space.

ONGC up 2.65%, HDFC Bank up 2.20%, ITC up 1.37%, HDFC up 1.29% and ICICI Bank up 0.57% were the major gainers on the Sensex, while JP Associates down 5.36%, Hero MotoCorp down 4.90%, Tata Power down 4.24%, Tata Steel down 3.94% and Jindal Steel down 3.89% were the major losers in the index.

Meanwhile, the Pension Fund Regulatory and Development Authority (PFRDA) Bill, which was held up for years, is likely to be tabled in Parliament this week. As the government has reached out to the main Opposition BJP and secured its approval for some key provisions of the draft legislation. Finance Minister Pranab Mukherjee held a discussion with the opposition leaders on the PFRDA Bill as well as Companies Bill and accepted some of the suggestions made by them.

The government is understood to have agreed to the Opposition’s demand for inclusion of assured returns to retired employees in Pensions Bill. The Standing Committee on Finance, headed by Yashwant Sinha, had recommended for an assured return option to new subscribers. Further, the government also agreed for defining the quantum of FDI in PFRDA in the Act itself instead of bringing it through an Executive decision.

Earlier, the panel had sought a specified FDI limit in the Bill while the government was of the view that FDI limit in the pension should be at 26% at par with the insurance sector. The amended legislation will now fix the ceiling of 26% FDI in the bill itself, besides making provisions for guaranteed returns and easy withdrawal norms.

At present, pension funds of over 10 lakh employees in the country are managed by domestic players such as Life Insurance Corporation of India, State Bank of India, Kotak Mahindra Bank and Reliance Capital, but foreign companies have showed interest in the country’s pension market.  The PFRDA bill, if passed, will open country’s profitable pension sector to foreign players.

The PFRDA Bill will be moved in Lok Sabha for consideration and passing on December 21 while a new Companies' Bill will be re-drafted and introduced in Parliament.

The S&P CNX Nifty is currently trading at 4,575.75, lower by 37.35 points or 0.81% after trading as high as 4,637.25 and as low as 4,558.35. There were 12 stocks advancing against 38 declines on the index.

The top gainers on the Nifty were ONGC up 2.75%, Ranbaxy up 2.74%, HDFC Bank up 2.11%, ITC up 1.27% and HDFC up 1.25%.

Sesa Goa down 5.25%, JP Associates down 5.20%, Reliance Communications down 5.18%, Hero MotoCorp down 5.16% and Tata Power down 5.03% were the major losers on the index.

Asian markets traded largely on a mixed note, Hang Seng climbed 0.06%, Nikkei 225 gained 0.49%, Seoul Composite surged 0.91% and Taiwan Weighted advanced 0.44%. On the flipside, Jakarta Composite eased 0.42%, Straits Times slipped 0.37% while Shanghai Composite dropped 0.10%.

The European markets were trading on a mix note with, France’s CAC 40 added 0.53%, Germany’s DAX eased 0.06% and Britain’s FTSE 100 sank 0.38%.