Benchmarks continue weak trade in late afternoon session

Indian equity benchmarks added losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. Prevailing caution ahead of the release of macro-economic data, July factory output and August CPI numbers, is also weighing of the sentiment of local equity markets. Traders were seen piling up positions in Realty, Metal and Power while selling was witnessed in FMCG, Oil & Gas and Consumer Durables sector stocks. In scrip specific development, Mahindra & Mahindra was trading in red after domestic brokerage firm cut the automaker to reduce from add, lowering the target price. It cited valuations as the key reason for the downgrade. ABG Shipyard was trading firm as it awaits Rs 650 crore infusion from banks as part of its corporate debt restructuring (CDR) package.

On the global front, the Asian markets were trading mostly in red, while the European markets too traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,100 and 27,100 levels respectively. The market breadth on BSE was positive in the ratio of 1629:1217 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 27073.46, down by 191.86 points or 0.70% after trading in a range of 27039.13 and 27251.44. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index up by 0.57%.

The gaining sectoral indices on the BSE were Realty up by 0.80%, Metal up by 0.17%, Power up by 0.07% while, FMCG down by 1.28%, Oil & Gas down by 1.23%, Consumer Durables down by 1.17%, Capital Goods down by 0.97%, IT down by 0.87% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.70%, Tata Power up by 1.69%, ICICI Bank up by 1.21%, Bajaj Auto up by 1.15% and Tata Steel up by 0.87%. On the flip side, Infosys down by 1.77%, ITC down by 1.61%, SBI down by 1.53%, Larsen & Toubro down by 1.43% and Reliance Industries down by 1.42% were the top losers.

Meanwhile, El Nino Pacific ocean warming event is possible in 2014 as the Australian Met department, in its latest outlook of El Nino, has said that there's a 50 percent chance of the weather pattern developing in the next few months. Australian Met department highlighted that the majority of international climate models surveyed by the bureau indicate Central Tropical Pacific surface temperatures will remain warmer than average, and may exceed El Nino thresholds by the end of the year.

El Nino can impact the agriculture production in the country as EI Nino in winters is often associated with heavy rainfall in the north, north-east and north-west India, and warmer months from December to March, particularly in the north. 

The development of El Nino event would add to the worries about an inadequate monsoon. However, Australia's Bureau of Meteorology has also lowered its prospects from 70 percent to just 50 percent, while American National Weather Service's Climate Prediction Centre has also reduced the chances of an El Nino this winter from 80 percent to 65 percent. Moreover, India Meteorological Department ( IMD) also expects that the odds of a strong El Nino was less this year, and was unlikely to make a huge impact on the Indian weather.

El Nino also known as the El Nino-Southern Oscillation (ENSO) is part of a weather system which couples sea surface temperatures warming in the Pacific with strengthening in trade winds to create El Nino conditions. So far this year the warming of the pacific surface waters has not been matched by changes in the atmosphere that create the sustainable conditions for an El Nino.

The CNX Nifty is currently trading at 8094.85, down by 58.10 points or 0.71% after trading in a range of 8088.35 and 8135.75. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were IDFC up by 3.10%, DLF up by 1.69%, Sesa Sterlite up by 1.53%, Tata Power up by 1.47% and Bajaj Auto up by 1.37%. On the flip side, Cairn India down by 2.69%, BPCL down by 1.85%, ITC down by 1.84%, Infosys down by 1.79% and Jindal Steel & Power down by 1.56% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 485.09 points or 1.93% to 24,705.36, Taiwan Weighted decreased 77.16 points or 0.82% to 9,357.61, Jakarta Composite decreased 59.74 points or 1.15% to 5,137.38, Shanghai Composite decreased 8.22 points or 0.35% to 2,318.31, KOSPI Index decreased 6.85 points or 0.33% to 2,049.41, FTSE Bursa Malaysia KLCI decreased 2.71 points or 0.14% to 1,871.41 and Straits Times decreased 1.66 points or 0.05% to 3,341.30.

On the other hand, Nikkei 225 increased 39.63 points or 0.25% to 15,788.78.

The European markets were trading in red; Germany’s DAX decreased 63.01 points or 0.65% to 9,647.69, France’s CAC decreased 15.16 points or 0.34% to 4,437.21 and UK’s FTSE 100 decreased 21.12 points or 0.31% to 6,807.88.