Indian equities slip to day’s low; IT, Metal stocks drag

Indian equity markets have drifted to the session’s lows in Thursday afternoon trades as investors continue to take profits off the table after previous sessions’ scintillating around three and half a percent rally. 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. The frontline indices are gyrating around the psychological 4,650 (Nifty) and 15,500 (Sensex) levels as investors even overlooked the encouraging weekly inflation numbers. India's food inflation moderated substantially to 1.81% in the week ended December 10, as per the government data. Sentiments largely remained pessimistic in the domestic markets on concerns over faltering economic growth and the rupee's depreciating run. On the global front, Asian markets exhibited pessimistic trends while renewed worries from the European front too played its share of spoilsport. Even as the European Central Bank infused 489.19 billion euro into 523 financial institutions in Europe at ultra-low interests under its newly-activated three-year lending facility, uncertainty over how the banks will use the funds and also doubts over how much of the funds banks raised will actually flow into struggling euro zone economies, persisted among investors. On the BSE sectoral space, the information technology index remained the top laggard in the space with around two and half a percent losses followed by the metal pocket which traded with around one and half a percent cut. On the flipside, the defensive counters like FMCG and Healthcare remained the only sectors which managed to trade on a positive note. 

Moreover, the broader markets too traded on a negative note but with moderate cuts of over half a percent, outperforming their larger peers. The bourses slipped on strong volumes of over Rs 0.60 lakh core. The market breadth on BSE was in favor of declines in the ratio of 1420:957 while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 15,515.37 down by 169.84 points or 1.08% after trading as high as 15,615.14 and as low as 15,482.33. There were 5 stocks advancing against 25 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index declined 0.59% and Small cap shed 0.59%.

On the BSE sectoral space, FMCG up 0.90% and Healthcare up 0.14% were the only gainers while TECk down 2.50%, IT down 2.21%, Metal down 1.51%, Bankex down 1.13% and Capital Goods down 0.96% were the major losers in the space.

HUL up 2.13%, DLF up 0.53%, ITC up 0.37%, Tata Motors up 0.11% and Maruti Suzuki up 0.05% were the major gainers on the Sensex, while Bharti Airtel down 4.44%, Wipro down 2.72%, Hindalco down 2.36%, Coal India down 2.23% and Infosys down 2.06% were the major losers in the index.

Meanwhile, government is mulling over the idea of doing away with some restrictions on the sugar industry, which faces too many controls and obligations that adversely affect the interests of the industry as well as farming community. Minister of Food, Consumer Affairs and Public Distribution K V Thomas has said that the government is contemplating demands for partial decontrol of the sector and the issue is being discussed at the highest level.

The food minister assured that he would take up the issue with Finance Minister Pranab Mukherjee and Agriculture Minister Sharad Pawar once the Parliament’s winter session concludes and will formulate a mechanism for de-controlling the sugar industry. On the issue of further export of sugar, the food minister said that the government would consider further exports of the sweetener at an appropriate time, which would be favorable for the industry.

The partial removal of restrictions on the sugar industry is essential to boost the industry’s competitiveness. Presently sugar industry has to abide by various regulations of the government like the compulsion to supply 26 lakh tonnes of sugar for the public distribution system at a discounted rate which causes losses of around Rs 3,000 crore to the industry every year. Also, under the monthly regulated release mechanism, each sugar mill is directed by the government to sell a certain quantity of the commodity every month.

The S&P CNX Nifty is currently trading at 4,645.45, lower by 47.70 points or 1.02% after trading as high as 4,677.20 and as low as 4,634.00. There were 13 stocks advancing against 27 declines on the index.

The top gainers on the Nifty were HUL up 2.22%, Ranbaxy up 2.09%, PNB up 1.45%, Power Grid up 0.97% and BPCL up 0.90%.

Bharti Airtel down 4.79%, SAIL down 2.92%, Wipro down 2.49%, Hindalco down 2.48% and R Com down 2.44% were the major losers on the index.

Asian markets traded largely on a negative note, Shanghai Composite declined 0.24%, Hang Seng slipped 0.51%, Nikkei 225 dropped 0.77%, Straits Times shed 0.39%, Seoul Composite eased 0.05% and Taiwan Weighted inched down 0.01%.

On the flipside Jakarta Composite added 0.17%.