Indian equities pare losses; hovers around neutral line

Indian equities have pared their initial losses and are trading near their neutral line in the late afternoon session as investors were busy in buying fundamentally strong stocks. Industry heavyweight RIL was trading in green helping the markets edge higher. Also, ONGC, BPCL and Gail India from Oil & Gas sector were trading in green giving the much needed support. HCL Technologies, TCS, Infosys and Wipro from IT pack were trading firm in green driving the markets higher. However, the sentiments got evaporated on disappointing monthly sales numbers from major automobile companies which dampened investor’s morale. Traders were seen piling up position in Consumer Durables, Oil & Gas and IT sector while selling was witnessed in Auto, Realty and FMCG sector. Bajaj Auto, Hero MotoCorp and M&M from Auto counters were seen trading in red driving the markets down. HUL and ITC from FMCG pack were seen trading in red pulling the markets lower. Kotak Bank, Axis Bank, PNB and HDFC Bank from Banking sectors were trading in red exerting pressure on the market. On the global front, all Asian markets traded on a sluggish note while the European markets were trading in green on optimistic mood. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,650 and 15,500 levels, respectively. The market breadth on BSE was neutral in the ratio of 1245:1243 while 127 scrips remained unchanged.

The BSE Sensex is currently trading at 15,461.68 up by 6.76 points or 0.04% after trading as high as 15,541.95 and as low as 15,358.02. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index slipped 0.30% while Small cap eased 0.07%.

On the BSE sectoral space, Consumer Durables up 0.86%, Oil & Gas up 0.72%, IT up 0.69%, TECk up 0.65% and Capital Goods up 0.23% were the major gainers while Auto down 1.44%, Realty down 1.30%, FMCG down 0.89%, Power down 0.78% and HealthCare down 0.17% were the major losers in the space.

Coal India up 3.24%, Tata Motors up 2.21%, Maruti Suzuki up 1.86%, ICICI Bank up 1.40% and TCS up 1.18% were the major gainers on the Sensex, while Bajaj Auto down 7.52%, Hero MotoCorp down 4.47%, DLF down 3.20%, Hindalco down 3.02% and NTPC down 1.56% were the major losers in the index.

Meanwhile, items like biscuits, coffee, tea, toiletries and personal care are likely to get costlier from the next financial year, which would in turn not only pinch the pockets of common man but also adversely impact the sales of fast moving consumer goods (FMCG) companies. According to a survey conducted by Associated Chambers of Commerce and Industry of India (ASSOCHAM), prices of regular items like biscuits, coffee, tea, toiletries and personal care could be by hiked about 10 percent or more by the first quarter of the next financial year.

ASSOCHAM, one of the apex trade associations of India, opined that the depreciating rupee and increasing input costs are putting additional pressure on margins of FMCG companies. This is likely to compel the FMCG companies to hike prices of their products in 2012, which in turn would dampen sales during the year by about 10-15 percent including the semi-urban and rural market as the increase in cost burden might be shifted to the consumers.

Volume growth of FMCG segment is expected to slow in 2012 owing to reasons like unrelenting rise in commodity and raw-material prices, fluctuation in currency, feeble industrial growth and uncertain global economic environment coupled with an overall moderating consumer sentiment. The government notification on revised norms for packaging of FMCG products, which would come into effect from July 1, 2012, would also force the companies to hike prices of their products.

The government notification has prescribed standard quantities in which certain specified commodities under 19 categories would have to be packed for sale, distribution or delivery. These categories include coffee, tea, baby food, weaning food, biscuits, bread, uncanned packages of butter and margarine, cereals and pulses, edible oils, milk powder, non-soapy detergent powder, powdered rice, flour, atta, salt, soaps, aerated soft-drinks, non-alcoholic beverages, mineral water and drinking water, cement in bags and paint varnish.

The S&P CNX Nifty is currently trading at 4,616.35, lower by 7.95 points or 0.17% after trading as high as 4,645.95 and as low as 4,588.05. There were 24 stocks advancing against 26 declines on the index.

The top gainers on the Nifty were Coal India up 3.24%, Maruti up 2.21%, Tata Motors up 1.82%, Ranbaxy up 1.59% and HCL Tech up 1.50%.

Bajaj Auto down 7.51%, SesaGoa down 5.48%, Hero MotoCorp down 4.56%, Hindaclo down 3.28% and DLF down 3.17% were the major losers on the index.

Asian markets traded on a sluggish note; Jakarta Composite slipped 0.57% and Taiwan Weighted plunged 1.69%.On the flipside, Seoul Composite was flat with 0.03% gains. Stock markets in China, Hong Kong, Japan and Singapore remained closed for extended New Year holiday.

The European markets were trading in green, France’s CAC 40 jumped 0.25%, Germany’s DAX ascended 0.85% and Britain’s FTSE 100 inched higher 0.10%