Markets extend early losses in late afternoon session

Indian bourses extended early losses and are trading near intra-day low level in late afternoon session as the RBI kept the key interest rate unchanged. Furthermore, profit booking in frontline blue chip stocks after recent gains also dragged down the major indices and most of the major indices were trading in negative territory. Though Apex Bank’s decision to keep interest rate unchanged at 8% was largely in line with market expectations, its hint about lowering it early next year had improved the sentiments to some extent. Investors were seen piling up positions in metal, capital goods and FMCG stocks. Further, the latest report which highlighted that core industries output during April to October, 2014-15 grew 4.3% as against 4.2% growth in the same period of 2013-14 also provided support to domestic benchmarks. Buying continued in the broader markets with both the mid and small cap indices trading down by over 0.15%.

Sector wise, shares of select pharmaceutical companies Sun Pharma Advanced Research Company (SPARC), Wockhardt, GlaxoSmithKline Pharmaceuticals, Indoco Remedies and Natco Pharma have rallied between 5-10% backed by heavy volumes. Auto stocks were under pressure on reports that the government plans to make crash tests mandatory for cars once the test facilities are made available in the country. In scrip specific movement, Shares of Bajaj Corp has rallied 5% to Rs 351 after Singapore's sovereign wealth fund Temasek acquired stake in the company through open market.

On global front, most of the Asian markets were trading in green with Jakarta Composite up by 0.12% and Straits Times up by 0.67%.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,600 and 28,500 levels respectively. The market breadth on BSE was negative, out of 2,834 stocks traded, 1,265 stocks advanced, while 1,465 stocks declined on the BSE.

The BSE Sensex is currently trading at 28460.27, down by 99.35 points or 0.35% after trading in a range of 28386.46 and 28576.39. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index up by 0.15%.

The gaining sectoral indices on the BSE were Metal up by 1.31%, Capital Goods up by 0.64%, FMCG up by 0.52%, Power up by 0.19% and INFRA up by 0.05%. While, IT down by 1.19%, Auto down by 1.11%, TECK down by 0.82%, Bankex down by 0.26% and Consumer Durables down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 2.07%, Hindalco up by 1.97%, Sun Pharma Inds. up by 1.35%, Bharti Airtel up by 1.31% and Tata Steel up by 1.16%. On the flip side, Mahindra & Mahindra down by 2.41%, Infosys down by 2.04%, Bajaj Auto down by 1.62%, Tata Motors down by 1.26% and HDFC down by 1.01% were the top losers.

Meanwhile, Core sector output in the month of October rose to four-month high of 6.3 percent in October as compared to 1.9% in September primarily led by better output in coal, refinery products and electricity. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weight of 37.9% in the overall Index of Industrial Production (IIP). Its cumulative growth during April to October, 2014-15 was recorded at 4.3% as against 4.2% growth in the same period of 2013-14.

Among core sectors, Electricity generation having 10.32% weight in IIP index registered a growth of 13.2% in October, 2014 over the same month of corresponding period. During April to October 2014-15, it recorded a growth of 10.5% over the corresponding period of previous year. Coal production with weightage of 4.38% in index increased by 16.2% in October, 2014 over the same period of corresponding period. On cumulative basis, coal production growth during April-October, 2014-15 increased by 8.5% compared to April-October, 2013-14. Crude oil and Petroleum Refinery Products, with weightage of 5.22% and 5.94% in index increased by 1.0% and 4.2% in October, 2014 over October, 2013. However, in cumulative terms, Crude oil and Petroleum Refinery Products declined by 0.9% and 1.7% during April-October 2014-15. Steel production with weight of 6.68% in IIP index, increased by 2.3% in October, 2014 over October, 2013. While, its cumulative index during April to October, 2014-15 increased by 2.3% over the corresponding period of previous year.

On the flip side, Cement sector having weightage of 2.41% respectively in IIP index, registered a contraction of 1.0% respectively, in the month under review over October 2013. However, in cumulative terms, Cement production recorded a growth of 8.1% during April-October 2014-15. Natural Gas production having weightage 1.71% in IIP index declined by 4.2% in October 2014 as compared to the month in October, 2013. The cumulative index for Natural Gas production during April-October 2014-15 declined by 5.6% over corresponding period of previous year. Fertilizer production with weightage of 1.25% in IIP index declined 7.6% in October, 2014 over October, 2013. The cumulative index of Fertilizer production during April-October 2014-15 declined by 1.1 % over the corresponding period of previous year.

The significant growth in core industries output is a positive news ahead of the RBI's monetary policy. The latest data comes on the heels of second quarter GDP data showing economic expansion of 5.3%, compared with a nine-quarter high of 5.7% in the previous quarter, and the continued weakness of the manufacturing industry.

The CNX Nifty is currently trading at 8524.95, down by 30.95 points or 0.36% after trading in a range of 8504.65 and 8560.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 3.98%, NMDC up by 2.19%, Sesa Sterlite up by 1.85%, Hindalco up by 1.76% and PNB up by 1.56%. On the flip side, Asian Paints down by 3.00%, BPCL down by 3.00%, Mahindra & Mahindra down by 2.42%, Infosys down by 2.01% and HCL Tech down by 1.77% were the top losers.

Most of the Asian markets were trading mixed, KOSPI Index up by 0.61 points or 0.03% to 1,965.83, FTSE Bursa Malaysia KLCI up by 1.57 points or 0.09% to 1,779.84, Jakarta Composite up by 6.2 points or 0.12% to 5,170.48, Straits Times up by 22.04 points or 0.67% to 3,327.68, Nikkei 225 up by73.12 points or 0.42% to 17,663.22, Shanghai Composite up by 83.39 points or 3.11% to 2,763.55 and Hang Seng up by 286.85 points or 1.23% to 23,654.30. While, Taiwan Weighted down 82.92 points or 0.91% to 9,034.79.

European Markets made positive opening; Germany’s DAX up by16.88 points or 0.17% to 9,980.39, France’s CAC up by20.68 points or 0.47% to 4,398.01and UK’s FTSE 100 up by56.51 points or 0.85% to 6,712.88.