Indian equities trim losses; Sensex above 16,000 mark

Indian equities trim losses but still in red below neutral line as positive IIP numbers and weekly food inflation data failed to cheer investors and weakness persisted on the domestic bourses in late afternoon session. Wary investors booked profit after which the key benchmarks NSE - Nifty and BSE - Sensex slipped closer to important support level. Traders were seen piling up the positions in Metal, Power and Bankex sector while selling was witnessed in IT, TECk and Oil & Gas sector. Infosys kicked off the earning season for the December quarter after announcing its Q3 results, which will be looked upon by the traders as the result season will further determine the direction of stock market. Meanwhile, the shares of IT companies continued to remain under pressure after Infosys Technologies announced lower revenue guidance which pulled down other IT majors like Tata Consultancy Services and Wipro as well. On the global front, major of Asian markets traded in red while the European markets were trading on a mix note. In Europe, Italy and Spain prepared for debt auction while the main event will be the policy meetings of the Bank of England and the European Central Bank (ECB) which is scheduled today. The ECB is widely expected to keep rates unchanged at 1%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,850 and 16,100 levels, respectively. The market breadth on BSE was neutral in the ratio of 1284:1292 while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 16,038.77 down by 137.09 points or 0.85% after trading as high as 16,178.58 and as low as 15,962.59. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index added 0.23% while Small cap was up 0.13%.

On the BSE sectoral space, Metal up 1.15%, Power up 1.11%, Bankex up 1.06%, PSU up 0.82% and Realty up 0.57% were the major gainers while IT down 5.74%, TECk down 4.16% and Oil & Gas down 0.81% were the only losers in the space.

SBI up 2.11%, Sterlite Industries up 1.74%, Hindalco Industries up 1.65%, Coal India up 1.62% and Tata Steel up 1.24% were the major gainers on the Sensex, while Infosys down 7.64%, TCS down 4.43%, Wipro down 2.95%, RIL down 1.12% and Sun Pharma down 0.78% were the major losers in the index.

Meanwhile, India’s weekly food inflation, measured by the Wholesale Price Index (WPI), extended the declining streak for the tenth week in a row and remained in negative zone for second straight week to -2.90% for the week ended Dec 31 from -3.36% for the previous week thanks to sharp decline in the prices of vegetables, especially onions and potatoes. The food inflation turned negative in the week ended Dec 24 for the first time in almost six years.

The sharp slump in the rate of price rise of food items in last two months has come as a sigh of relief for economic policymakers and also the government who had been battling to control the rampant inflationary pressure on the economy since two years. In a bid to rein inflation, RBI hiked key policy rates by 13 times since March 2010 only to pause the liquidity tightening measures in its recent meeting.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group rose by 0.4% to 190.8 from 190.0 for the previous week due to higher prices of fish-marine (5%), mutton (4%), barley, poultry chicken, gram and jower (2% each) and bajra, maize, milk and egg (1% each).  However, the prices of tea (3%), condiments & spices and ragi (2% each) and fish-inland and fruits & vegetables (1% each) declined.

The index for ‘Non-Food Articles’ group rose by 1.3 percent to 181.0 from 178.7 for the previous week due to higher prices of flowers (19%), sunflower (7%), linseed and guar seed (4% each), raw silk (3%), soyabean, groundnut seed and fodder (2% each) and rape & mustard seed and gingelly seed (1% each).  However, the prices of raw rubber (2%) and copra, safflower, coir fibre and mesta (1% each) declined.

As a result, the index for ‘Primary Articles’, which accounts for 20.12% of the WPI, rose by 0.5% for the week ended Dec 31 to 198.6 from 197.6 for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 0.51% for the period under consideration as compared to 0.10% for the previous week. Meanwhile, the index for Fuel & Power group which carries a weightage remained unchanged at its previous closing levels of 172.7 in the week.

The S&P CNX Nifty is currently trading at 4,827.75, lower by 33.20 points or 0.68% after trading as high as 4,869.20 and as low as 4,803.90. There were 33 stocks advancing against 16 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were IDFC up 4.04%, Sesa Goa up 3.98%, Siemens up 2.78%, PNB up 2.15% and SBI up 2.12%.

Infosys down 7.75%, TCS down 4.54%, Wipro down 2.99%, HCL Tech down 2.77% and Cairn down 2.69% were the major losers on the index.

Asian markets were trading largely on a negative note; Shanghai Composite was down by 0.47%, Hang Seng down 0.30%, Jakarta Composite was down 0.46%, Nikkei 225 was down 0.74% and Taiwan Weighted was down by 0.02%.

On the flip side, Straits Times was up 0.04% and Seoul Composite was up 1.03%.

The European markets were trading on a mix note with, France’s CAC 40 ascended 0.40%, Germany’s DAX advanced 0.29% and Britain’s FTSE 100 edged lower 0.07%.