Benchmarks trim losses; recuperation in HC and Realty counters aids

Local bourses have trimmed some losses on the back of recuperation in realty and healthcare counters. However, Indian equity markets duplicating the trend of global markets have edged lower after a week’s bull run.  Asian shares inched lower as markets cautiously tuned in to a likely debt swap deal for Greece that is crucial for avoiding a messy default and eyed yet another European summit meeting. Regional sentiment was also subdued after the Dow Jones Industrial Average lost ground on Friday following a report showing that U.S. fourth quarter growth fell short of expectations, which was further dampened by Shanghai's declines. Traders were disappointed as they had expected China's share market to react positively the Federal Reserve's pledge to maintain its ultra-low rates for a longer period than previously stated.

Back home, 30 scrip index on BSE-Sensex-losing over century of points was trading sub 17100 level.  While, widely followed 50 share index -Nifty- despite losing close to 50 points was trading above the 5100 mark. The broader indices turned positive after gap down opening. The overall market breadth on BSE was still in the favour of advances which battered declines in the ratio of 1074:1025, while 73 shares remained unchanged.

The BSE Sensex is currently trading at 17,090.55, down by 143.43 points or 0.83%. The index has touched a high and a low of 17,138.04 and 17,054.99 respectively. There were 13 stocks advancing against 17 declining ones on the index.

The broader indices turned positive after gap down opening; the BSE Mid cap and Small cap indices were trading up by 0.04% and 0.08% respectively. The only gaining sectoral indices on the BSE were, HC up by 0.18%, Realty up by 0.08% and FMCG up by 0.04%. While, CG down by 1.84%, Power down by 1.15%, Bankex down by 1.13%, Metal down by 0.97% and TECK down by 0.67% were the top losers on the index.

The top gainers on the Sensex were Sun Pharmaceuticals up by 2.29%, ONGC up by 1.24%, Hero MotoCorp up by 0.99%, Maruti Suzuki up by 0.98% and GAIL up by 0.96%.

On the flip side, BHEL down by 7.16%, Bharti Airtel was down by 3.29%, Sterlite Industries down by 2.29%, Hindalco Industries down by 2.01% and ICICI Bank down by 1.82% were the top losers on the Sensex.

Meanwhile, uncertain global economy, rising interest rates and surging inflation had led to a decline in the business confidence for October-December 2011. As per the survey conducted by the Confederation of Indian Industries (CII), the Business Confidence Index (BCI) for the third quarter has declined to 48.6 from 53.6 in the previous quarter.

BCI is a market-related index that reflects the mood of businesses in the economy. It is about what businesses are doing and experiencing. The index takes into account factors like expected GDP growth, monthly inflation figures and interest rates, analysis of the labour market, foreign investment, and the political climate, etc. which has impact on the business sector.

According to the CII director-general Chandrajit Banerjee, stagnation in investment plans has emerged as the key concern in the current macro-economic scenario. Apart from this, the high fiscal deficit, surge in imports, inadequacy of skilled labour and stagnancy in reforms have emerged as other key areas of concern.

Around 37.2% of respondents expected GDP growth to moderate to 7-7.5% for the current year, not far from what the finance ministry is expecting. A majority of the respondents also expected capacity expansion in their companies to stagnate. As many as 56.9% have said, that in the third quarter they will continue with the capacity similar to that in the second quarter. On the inflation front, 46.8% of respondents expect average inflation to be above 9% and 35.8% expecting it to be in the range of 8-9% in 2011-12.

Further, confidence among micro, small and medium enterprises in the services sector has remained higher at 56.1 as compared to manufacturing which stood at 52.6. The BCI has been falling in every quarter since the last one of 2010-11, and has fallen by a cumulative 18.1 points since then.

The S&P CNX Nifty is currently trading at 5,161.40, lower by 43.30 points or 0.83%. The index has touched a high and a low of 5,166.15 and 5,147.10 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were RPower up by 3.96%, Sun Pharma up by 2.64%, Reliance Infra up by 1.53%, ONGC Up by 1.37% and Reliance Communications up by 1.35%.

On the flip side, BHEL down by 7.20%, BHarti Airtel down by 3.28%, IDFC down by 2.82%, Sterlite Industries down by 2.82% and JP Associates down by 2.54% were the major losers on the index.

Most of the Asian equity indices were all indicating a somber sentiment; Shanghai Composite lost 0.31%, Hang Seng slid 0.49%, Jakarta Composite plunged 1.89%, Nikkei 225 surrendered 0.59%, Straits Times skid 0.70% and Seoul Composite plummeted 1.27%. On the flip side, Taiwan Weighted up by 2.22% was the lone gainer amongst the Asian pack.