Markets continue to trade weak; caution ahead of key economic data weighs

Local equity markets after slipping into negative territory were trading with cut of over three tenths of a percent, which dragged both Sensex and Nifty below psychologically crucial 27,400 and 8,300 levels respectively. However, broader indices outperforming larger counterparts were trading with gains of around 0.30%-0.50%. Prevailing cautiousness ahead of the release of crucial macro-economic data along with somber global cues, mainly kept market-participants at the tenterhooks. Street widely expects CPI inflation data for the month of December to come slightly more than 5% as compared to 4.38% recorded in the month of November, while industrial output is likely to show a 2.7% rise year-on-year in November, bouncing back from a 4.2 percent contraction in October.

On the global front, Stocks in Asia traded mostly lower Monday, with Japan’s stock market, the region’s largest, closed for a public holiday. Declines in the region followed a downbeat Friday session on Wall Street.

Closer home, most of the sectoral indices on BSE were trading into positive territory, however, stocks from Metal, Oil & Gas and Infrastructure counters were the prominent losers of the session. In stock-specific activity, shares of public sector oil marketing companies edged higher as global crude oil prices fell. Additionally, telecom stocks were buzzing in trade after the Department of Telecommunications (DoT) issued notice inviting applications (NIA) for auction of spectrum in 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands. The details of 2100 MHz bands would be announced later. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1165:850; while 27 shares remained unchanged.

The BSE Sensex is currently trading at 27372.41, down by 85.97 points or 0.31% after trading in a range of 27323.74 and 27539.55. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.55%.

The gaining sectoral indices on the BSE were FMCG up by 1.24%, IT up by 0.50%, TECK up by 0.23%, Capital Goods up by 0.23% and Bankex up by 0.10% while, Metal down by 1.79%, Oil & Gas down by 1.61%, PSU down by 0.72%, INFRA down by 0.51% and Auto down by 0.46% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.01%, Infosys up by 1.25%, Dr. Reddys Lab up by 1.03%, SBI up by 0.61% and Axis Bank up by 0.56%. On the flip side, Coal India down by 4.87%, Bharti Airtel down by 2.16%, Reliance Industries down by 1.82%, Bajaj Auto down by 1.57% and ONGC down by 1.55% were the top losers.

Meanwhile, persuading global investors to invest in India, Prime Minister Narendra Modi has promised to make India the easiest destination to do business with a stable tax regime and a predictable, transparent and fair policy environment. Stressing that the government is working to provide a policy-driven governance, Narendra Modi has stated that a single window clearance for projects is being set up at both central and state level to boost the manufacturing sector. India has low-cost and high quality manpower and global players must have to leverage this opportunity.

Prime Minister added that government is actively working to revive the economy and listed out recent initiatives taken by his government. He added that FDI in construction has been liberalised, 100 percent foreign investment has been allowed in railways, defence sector has been opened for FDI up to 49 percent and a hiked FDI to 49% in the insurance sector. To boost the infrastructure development, a fast track PPP mechanism is being put in place to speed up the implementation of roads, gas grids, electricity and water systems, farm irrigation projects.

Indian economic growth had slowed down to below 5% over the last two financial years amid concerns like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects. However, the domestic economy has shown signs of nascent recovery and expanded at 5.5% during H1FY15 as compared to 4.9% H1FY14.

The CNX Nifty is currently trading at 8264.60, down by 19.90 points or 0.24% after trading in a range of 8245.60 and 8297.65. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.86%, Tech Mahindra up by 2.24%, Bank of Baroda up by 1.89%, PNB up by 1.89% and Infosys up by 1.21%. On the flip side, Coal India down by 4.57%, Cairn India down by 3.66%, Jindal Steel & Power down by 2.36%, Bharti Airtel down by 1.95% and Reliance Industries down by 1.92% were the top losers.

Asian markets were trading mostly lower; with Shanghai Composite trading lower by 55.79 points or 1.7% to 3,229.62; Taiwan Weighted declining by 37.28 points or 0.4% to 9,178.30; Jakarta Composite sliding by 30.33 points or 0.58% to 5,186.34; FTSE Bursa Malaysia KLCI losing 6.31 points or 0.36% to 1,726.13; KOSPI Index shedding 3.75 points or 0.19% to 1,920.95;  Straits Times losing 0.57 points or 0.02% to 3,337.87. On the flip side, Nikkei 225 gained by 30.63 points or 0.18% to 17,197.73 and Hang Seng edged higher by 78.81 points or 0.33% to 23,998.76 .