Markets continue to trade in red amid weak global cues

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in banking, PSU and power stocks. Though most of the sectoral indices were trading in red with IT as top losing index down by around 1.87%. Selling activity gathered momentum on disappointing economic data as industrial production contracted by 4.2 percent in October, moreover the weak trade in Asian peers on account of global growth concerns also weighed on the sentiments. Investors were nervous after US shares posted their biggest weekly fall in two and half years last week amid expectations that the US Federal Reserve to raise interest rates. Selling was broad based with both mid cap and small cap indices were trading in negative territory. Banking shares were trading higher by up to 2% ahead of the WPI inflation data release for November later today. Among blue chip stocks, HDFC was top gainer up by around 3.62%, while TCS was top loser trading down by around 3.12%. Share of Tata Consultancy Services (TCS) has dipped nearly 4% to Rs 2,355 after  the company in an investor update has announced for a weak revenue growth for the December quarter, arising from seasonality and pressure in its banking, financial services and insurance (BFSI) business.

On global front, Asian markets were trading in red with Nikkei 225 down 1.6% and Hang Seng down 1.09%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was negative, out of 2,457 stocks traded, 1,015 stocks advanced, while 1,359 stocks declined on the BSE.

The BSE Sensex is currently trading at 27287.83, down by 62.85 points or 0.23% after trading in a range of 27105.04 and 27359.54. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index down by 0.23%.

The gaining sectoral indices on the BSE were Bankex up by 0.48%, PSU up by 0.39% and Power up by 0.16%. On the flip side, IT down by 1.87%, TECK down by 1.43%, Consumer Durables down by 1.40%, Oil & Gas down by 0.86% and FMCG down by 0.81% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 3.62%, Coal India up by 2.64%, BHEL up by 0.99%, SBI up by 0.80% and NTPC up by 0.79%. On the flip side, TCS down by 3.16%, Cipla down by 2.16%, Sesa Sterlite down by 1.93%, GAIL India down by 1.76% and Hindustan Unilever down by 1.48% were the top losers.

Meanwhile, concerned over the contraction in industrial output growth during October, India Inc has stated that Reserve Bank must slash interest rates urgently to spur demand.   Dashing hopes of recovery, industrial production contracted by 4.2 percent in October, mainly on account of poor show by the manufacturing sector. The manufacturing output which accounts for around 75 percent of the IIP index, contracted by 7.6 percent in October, as compared to a dip of 1.3 percent in the same month last year.  

Ficci President Sidharth Birla has asserted that the fall in manufacturing growth in October is broad-based and it not only reflects slowdown in investments but also the subdued consumer demand. Out of the 22 industry groups, 16 industries in manufacturing showed negative growth in October. Therefore, the central bank should cut the interest rates urgently to improve the demand in the economy. Sidharth Birla also emphasized the need for faster roll-out of reforms announced by the government to boost the economic growth.

The Confederation of Indian Industry (CII) President Ajay S Shriram stressed that key macroeconomic indicators such as CAD and inflation is under control and industry is also positive about additional investments. Thus, it is the appropriate time for RBI to slash the interest rate to boost investments and kick-start the economy. CPI inflation eased to 4.38 percent in November as compared to 5.52 percent in October, helped by the lower prices of food and fuel.

The CNX Nifty is currently trading at 8219.20, down by 4.90 points or 0.06% after trading in a range of 8152.50 and 8232.60. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were HDFC up by 3.87%, Kotak Mahindra Bank up by 3.61%, Coal India up by 2.94%, Indusind Bank up by 2.44% and Zee Entertainment up by 1.41%. On the flip side, TCS down by 3.05%, Tech Mahindra down by 2.86%, BPCL down by 2.56%, Cipla down by 2.40% and HCL Tech down by 1.96% were the top losers.

Asian markets were trading in red, Nikkei 225 down 278.23 points or 1.6% to 17,093.35, Hang Seng down 253.7 points or 1.09% to 22,995.50, Jakarta Composite down 45.59 points or 0.88% to 5,114.84, Taiwan Weighted down 41.7 points or 0.46% to 8,985.63, Straits Times down 34.02 points or 1.02% to 3,290.11, FTSE Bursa Malaysia KLCI down 29.25 points or 1.69% to 1,703.74, Shanghai Composite down7.52 points or 0.26% to 2,930.65 and KOSPI Index down 1.35 points or 0.07% to 1,920.36.