Benchmarks off day’s low; weakness persist

In a dismal session of trade, benchmark equity indices despite coming come off day’s low, continue to languish into negative territory with massive losses of around a percent, which has kept Sensex below psychologically crucial 27650 level. Meanwhile, Nifty has reclaimed 8,300 level, but still in range of breaching the level.  Broader indices following suite were also trading with losses in the range of 0.45%-0.65%. Prevailing cautiousness ahead of the release of key macroeconomic data, i.e, consumer price index (CPI) based inflation and Index of Industrial Production (IIP) data mainly weighing on the sentiments, keeping market-participants at the sidelines. While, the street expects CPI inflation to be around 4.4% in November compared with 5.52% in October, IIP is expected to grow 2.7% in October compared with 2.5% in September.

On the global front, Asian shares fell again on Thursday as plunging oil prices continued to fuel global growth fears. Crude oil prices fell as much as 5% overnight on weak US demand and Saudi Arabia reaffirming that it has no plans to curb output.

Closer home, most of the sectoral indices on BSE were reeling under pressure, with exception of stocks from Healthcare counters. Stocks from Oil & Gas, Realty and PSU counters were the top losers of the session. In stock specific activity, sugar stocks like Balrampur Chini , Bajaj Hindusthan, Shree Renuka Sugars rallied 7-8 percent on Thursday as the government has fixed a price of Rs 48.50-49.50 per litre for procurement of ethanol for blending with petrol, a rate much higher than the price oil companies presently pay to buy the sugarcane extract. On the flip side, PSU bank stocks edged lower after Union Cabinet chaired by Prime Minister, Narendra Modi gave its approval for allowing Public Sector Banks (PSBs) to raise capital to meet their additional capital requirements under BASEL-III by diluting government holding upto 52% in a phased manner. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1624:927; while 73 shares remained unchanged.

The BSE Sensex is currently trading at 27627.25, down by 203.85 points or 0.73% after trading in a range of 27539.47 and 27796.34. 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 0.51%, while Small cap index lost 0.67%.

The losing sectoral indices on the BSE were Oil & Gas down by 1.69%, Realty down by 1.28%, PSU down by 0.87%, Metal down by 0.83%, Bankex down by 0.83%.

The top gainers on the Sensex were BHEL up by 2.39%, Dr. Reddys Lab up by 0.72%, Sun Pharma Inds. up by 0.58%, Mahindra & Mahindra up by 0.56% and Maruti Suzuki up by 0.45%. On the flip side, Reliance Industries down by 2.18%, Infosys down by 1.92%, Tata Steel down by 1.84%, GAIL India down by 1.75% and ICICI Bank down by 1.70% were the top losers.

Meanwhile, the Confederation of Indian Industry (CII), in pre-budget consultations with Revenue Secretary Shaktikanta Das and other officers of the Finance Ministry, emphasized the need for the government to implement steps for reviving the economy. It suggested the centre on introducing measures like removal of anomalies in customs duty, reduction in CST rate, rationalisation of CENVAT credit scheme, among others in the forthcoming Budget 2015-16, while seeking continuity of Finance Ministry’s efforts on bringing in simplicity, clarity and stability in the tax policy regime.

The industry chamber recommended the government to remove anomalies in customs duty and slash down Central Sales Tax rate from 2 per cent to 1 per cent to compensate for the delay in the implementation of the GST. It also demanded that the government extend the excise duty concessions on certain goods to March 15, 2015. In the Union budget 2014-15, this reduction in the range of 2 per cent-6 per cent was provided up to December 31, 2014.

CII requested extension of investment allowance to the infrastructure sector to further spur investment activity in the economy. It demanded infrastructure companies to be exempted from paying the Minimum Alternate Tax (MAT).

The chamber also suggested putting in place technology based e-governance initiatives for procedural simplification to boost investor sentiment and pointed the government to take the 'Make in India' initiative to a new level in order galvanize the economy to a higher and inclusive growth path.

It recommended the promotion of manufacturing activity as one of the precedence to bolster growth. Besides, the chamber sought revamping of dispute resolution by strengthening the authority on Advance Ruling (AAR) and Advance Pricing Authority (APA).

The CNX Nifty is currently trading at 8297.70, down by 57.95 points or 0.69% after trading in a range of 8272.40 and 8348.30. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.47%, Tech Mahindra up by 1.07%, Kotak Mahindra Bank up by 1.01%, Ultratech Cement up by 1.01% and Lupin up by 0.83%. On the flip side, Reliance Industries down by 2.27%, Jindal Steel & Power down by 2.25%, Tata Steel down by 2.22%, Cairn India down by 2.08% and Infosys down by 1.94% were the top losers.

Asian shares were reeling under pressure; with Hang Seng declining by 253.65 points or 1.08% to 23,270.87; Nikkei 225 sliding by 155.18 points or 0.89% to 17,257.40; KOSPI Index shedding by 28.97 points or 1.49% to 1,916.59; Taiwan Weighted sliding by 19.09 points or 0.21% to 9,013.07; Shanghai Composite edging lower by 15.07 points or 0.51% to 2,924.94 ; FTSE Bursa Malaysia KLCI surrendering by 11.02 points or 0.62% to 1,754.50; Jakarta Composite losing 6.62 points or 0.13% to 5,158.79  and Straits Times trading lower by 6.55 points or 0.2% to 3,319.26