Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session on worries that financial contagion from Russia and slumping oil prices would lead foreign investors to shed risk assets. Sentiment got a hit after Indian rupee fell a 13-month low against the dollar on Wednesday while benchmark bond yields hit their highest level in two weeks as the brewing financial crisis in Russia continued to raise concerns about foreign fund outflows. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1,247.24 crore on December 16, 2014. However, losses remained capped with report that the Cabinet is now likely to approve the Constitutional Amendment Bill on Goods and Services Tax (GST), paving the way for tabling of the new legislation in the ongoing winter session of Parliament. In a compromise formula, the Centre decided to keep petroleum out of the proposed GST in return for states agreeing to entry tax being subsumed in the new indirect tax regime proposed from April 2016. Meanwhile, Investors keenly await a statement from the US Federal Reserve, new economic projections and a press conference by Fed Chairwoman Janet Yellen.

On the global front, Asian markets edged up on Wednesday on bargain-hunting, although gains were limited following more losses on Wall Street, while investors await the outcome of a Federal Reserve policy meeting. Overnight, US markets ended lower following reports of Russia lurching towards a financial crisis evoking parallels with its 1998 crash, as the rouble plunged more than 11% on Tuesday despite a dramatic midnight interest rate rise by the their central bank.  Back home, Extending its losses for the third straight day, the rupee fell by 34 paise to trade at fresh 13-month low of 63.87 against the dollar in early trade as the US currency strengthened overseas amid increased capital outflows.

On the sectoral front, stocks from FMCG were supporting the markets’ uptrend, while those from Consumer Durables, Realty and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Jagran Prakashan have been flying higher, on receiving approval for entry into the radio industry via acquisition of Music Broadcast (MBPL). On the other hand, shares of Natco Pharma have declined after the board alloted shares to promoters of Natco Organics at a discount to the current market price. Back home, the market breadth on BSE was positive, out of 2231 stocks traded, 1164 stocks advanced, while 980 stocks declined on the BSE.

The BSE Sensex is currently trading at 26607.93 down by 173.51 points or 0.65% after trading in a range of 26834.43 and 26469.42. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.21%, while Small cap index down by 3.17%.

The only gaining sectoral indices on the BSE was FMCG up by 0.22%, while Consumer Durables down by 3.30%, Realty down by 2.76%, Capital Goods down by 1.67%, Auto down by 1.62% and Power down by 1.43% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.31%, Reliance Industries up by 0.54%, ITC up by 0.49%, HDFC up by 0.04% and Infosys up by 0.01%. On the flip side, Cipla down by 2.72%, Sun Pharma down by 2.25%, Tata Power down by 1.94%, Bharti Airtel down by 1.93% and BHEL down by 1.80% were the top losers.

Meanwhile, the government has cleared that it has no plans to roll-back the recent hike in excise duty on diesel and petrol. Minister of state for finance Jayant Sinha has asserted that there is no plan to roll-back the duty as present circumstances do not warrant a change in the excise duty structure on petrol and diesel. 

To enhance the revenue collection to meet its fiscal deficit target of 4.1% of gross domestic product (GDP) in this financial year, the government hiked excise duty by Rs 1.50 a litre on both the fuels first on Nov 12. Later, on Dec 2, the duty on petrol was hiked by Rs 2.25 per litre and on diesel by Re 1 a litre. The move is expected to fetch the government an additional Rs 10,500 crore in the current fiscal. At present, excise duty on diesel stood at Rs 5.96 per litre for unbranded and Rs 8.25 per litre branded diesel. For unbranded and branded petrol, the excise duty is Rs 12.95 per litre and Rs 14.10 per litre, respectively.

Global crude oil prices have been witnessing steady declining trend since June owing to the oversupply in international markets and hit a fresh five-year low of about $60 per barrel on December 15.  However, the government on December 12 announced further cut by Rs 2 per litre each in Petrol and diesel prices. This was the eighth straight reduction in petrol prices since August and fourth in diesel since October. In Delhi, petrol price has reduced to Rs 61.33 per litre, the lowest in 44 months and Diesel to Rs 50.51 per litre, the lowest since July 2013.

The CNX Nifty is currently trading at 8003.20 down by 64.40 points or 0.80% after trading in a range of 8080.65 and 7961.35. There were 8 stocks advancing against 42 declining on the index.

The top gainers on Nifty were Tata Steel up by 1.40%, NMDC up by 1.30%, ITC up by 0.50%, Reliance Industries up by 0.41% and HDFC up by 0.27%. On the flip side, Asian Paints down by 4.49%, Lupin down by 3.88%, Jindal Steel & Power down by 3.68%, Cipla down by 2.96% and Sun Pharma down by 2.40% were the top losers.

The Asian markets were trading mostly in the green, KOSPI Index increased 0.01%, FTSE Bursa Malaysia KLCI surged 0.68%, Jakarta Composite rose 0.32%, Shanghai Composite added 0.99% and Nikkei 225 was up by 0.39%. On the flip side, Taiwan Weighted decreased 1%, Hang Seng dipped 0.23% and Straits Times was down by 0.19%.