Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in late morning session as funds and retail investors engaged in reducing positions.  Besides, a weakening trend on the other Asian markets following overnight losses on the US bourses, also influenced the sentiment. There was some cautiousness with the government slated to announce the industrial production data for October 2014 and annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India for November 2014 tomorrow. In addition, depreciating rupee which weakened by 15 paise to over one-week low of 62.17 against the dollar also had negative impact on the sentiments.

On global front, Asian stock markets fell as a downturn in oil prices overnight rippled through the region, pressuring Chinese state-owned energy companies and major oil producers in Australia in particular. Meanwhile, Brent for January settlement dropped by $ 2.60 to a fresh five-year low of $ 64.24 per barrel on the New York Mercantile Exchange in yesterday’s trade.

All the BSE sectoral indices were trading in the red. Among them, Oil & Gas, Metal and Capital Goods indices led the decliners and were down 1.18 per cent, 0.94 per cent and 0.93 per cent, respectively. In scrip specific development, Shares of sugar companies like Simbhaoli Sugars have rallied on the bourses after the government fixed a price of Rs 48.50-49.50 per litre for procurement of ethanol for blending with petrol. On the other hand, shares of Havells India dropped after the company cut standalone revenue forecast to 12-14% from 17-20%, citing weak domestic demand.

The market breadth on BSE was negative, out of 2227 stocks traded, 789 stocks advanced, while 1366 stocks declined on the BSE.

The BSE Sensex is currently trading at 27638.63 down by 192.47 points or 0.69% after trading in a range of 27796.34 and 27558.57. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.47%, while Small cap index was lower by 0.60%.

The losing sectoral indices on the BSE were Oil & Gas down by 1.18%, Metal down by 0.94%, Capital Goods down by 0.93%, PSU down by 0.93% and Bankex down by 0.91%.

The top gainers on the Sensex were BHEL up by 2.65%, Sun Pharma up by 0.50%, Mahindra & Mahindra up by 0.41%, Bajaj Auto up by 0.35% and Hindustan Unilever up by 0.18%. On the flip side, GAIL India down by 2.22%, Tata Motors down by 1.72%, Larsen & Toubro down by 1.72%, Infosys down by 1.70% and ICICI Bank down by 1.48% were the top losers.

Meanwhile, global rating agency Moody's, in its latest report titled '2015 Outlook-Global Credit Conditions' has highlighted that Indian economy is likely to pick up pace in 2015 and grow in the range of 5-6%, on the back of robust domestic demand. Moody's noted that Indian economy has benefited from a strong domestic demand base and diversified export markets that give protection from the effects of a slowing Chinese economy and muted growth in the Euro zone and Japan.

Further, the rating agency added that employment and consumption are likely to increase in India and the fall in global commodity prices will help to lower high inflation in the country.  It also projected that Indian companies would see improved cash flows owing to the acceleration in manufacturing activity. However, Moody's outlook remains negative on banking industry as it expects that high leverage in the corporate sector will inhibit any meaningful recovery in asset quality of banks.

After registering an average growth rate of 8% during FY08-FY12, Indian economic growth had slowed down to below 5% over the last two financial years. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the domestic economy has shown signs of nascent recovery and expanded at 5.5% during first half of this fiscal as compared to 4.9% in the same period of previous fiscal. 

The CNX Nifty is currently trading at 8299.10 down by 56.55 points or 0.68% after trading in a range of 8348.30 and 8276.15. There were 14 stocks advancing against 36 declining on the index.

The top gainers on Nifty were BHEL up by 2.84%, Tech Mahindra up by 1.11%, Ultratech Cement up by 0.83%, Mahindra & Mahindra up by 0.44% and Sun Pharma up by 0.44%. On the flip side, Cairn India down by 2.45%, GAIL India down by 2.13%, Larsen & Toubro down by 1.83%, Infosys down by 1.77% and Grasim Industries down by 1.76% were the top losers.

The Asian markets were trading in the red; Taiwan Weighted down by 0.18%, Hang Seng lost 1.09%, Nikkei 225 declined by 0.97%, KOSPI Index was lower by 1.08%, Shanghai Composite was down by 0.63%, FTSE Bursa Malaysia KLCI lost 0.48%, Jakarta Composite declined by 0.26% and Straits Times traded lower by 0.12%.