Indian equities continue weak trade; Sensex below 17,000 mark

After drifting to intraday lows in the afternoon session, the benchmark equity indices continue weak trade in the absence of buying among investors. Heavy selling was witnessed in Capital Goods, Power and Bankex sector. Infact all the thirteen sectoral indices were seen trading in red. Also, a CII survey report underscored the decline in business confidence in the December quarter owing to uncertain global economy, rising interest rates and surging inflation. BHEL was down with cut off around more than eight and half percent on announcing worse than expected earnings for the third quarter of this fiscal and dented investors’ sentiments. Also, L&T from Capital Goods space was down with more than three and half percent putting pressure on the market. ICICI Bank, Axis Bank, Kotak Bank, PNB, HDFC Bank and SBI from banking space were down exerting pressure on the markets. Industry heavyweight RIL was down with cut of around more than one and half percent pulling the markets down. However, ADA Group companies like Reliance Infra, Reliance Communications and Reliance Power were seen trading firm in green in the weak market. On the global front, all the Asian markets traded in red barring Taiwan Weighted while the European markets were also trading in red on a pessimistic note. Market participants are also awaiting the meeting of Euro-zone ministers scheduled later on Monday to discuss austerity and belt-tightening measures. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,150 and 17,000 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 1102:1558 while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 16,970.83 down by 263.15 points or 1.53% after trading as high as 17,138.04 and as low as 16,929.39. There were 6 stocks advancing against 24 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index slipped 0.83% while Small cap dipped 0.82%.

On the BSE sectoral space there were no gainers while Capital Goods down 3.77%, Power down 2.16%, Bankex down 1.85%, Consumer Durables down 1.66% and Realty down 1.52% were the major losers in the space.

Sun Pharma up 1.72%, Jindal Steel up 1.39%, Hero MotoCorp up 0.83%, Bajaj Auto up 0.77% and GAIL India up 0.47% were the major gainers on the Sensex, while BHEL down 8.70%, Sterlite Industries down 4.87%, Hindalco Industries down 3.95%, M&M down 3.78% and Bharti Airtel down 3.69% were the major losers in the index.

Meanwhile, in an effort to attract US investors, Finance Minister, Pranab Mukherjee while speaking to top business leaders, including those from Fortune 500 firms, at the Chicago Council of Global Affairs reiterated his government’s commitment to bring about Foreign Direct Investment (FDI) in multi brand retail. He said that India had further liberalised FDI in single brand retail, and was in the process of building up consensus among the various stakeholders for FDI in multi brand retail. 

India has taken number of steps to simplify the FDI regime to make it easily comprehensible to foreign investors. To make the FDI policy more user-friendly, all prior regulations and guidelines have been consolidated into a comprehensive document, which is reviewed every 6 months. FDI flows in India, which had considerably declined in 2010-11, had now bounced back in current fiscal year.

Emphasizing the need to sustain and strengthen the domestic growth, finance minister said that India was concentrating on accelerating the pace of the investment in infrastructure in its 12th Five Year Plan. India needed to invest an additional $1 trillion to sustain its current levels of growth and to equalize its benefits over the Plan period. For this, it was looking for additional investments from the private sector. The share of private and public-private partnership (PPP) investments in total investment during the 12th Plan (2012-17) was targeted to increase to 50% from the estimated 30% in the 11th Plan (2007-12).

The PPP route for investment in Indian infrastructure represented a commercially attractive opportunity for foreign investors. He further stated that the government had taken various measures to encourage and facilitate foreign investment in infrastructure.  By adding further he said, standardized and sophisticated contract documentation is in place and finally, India has now established unique and innovative financing instruments such as a scheme to support Viability Gap Funding (VGF) for PPP projects and special purpose vehicles (SPVs) for giving long tenor loans to PPP projects.

He also observed that India’s growth fundamentals were strong and they looked more attractive in a world challenged by problems of confidence and lack of growth. India’s robust performance in difficult times made it a safe haven that global capital was looking for. India presented an opportunity at this moment that could not be ignored.

The S&P CNX Nifty is currently trading at 5,118.65, lower by 86.05 points or 1.65% after trading as high as 5,166.15 and as low as 5,109.30. There were 11 stocks advancing against 39 declines on the index.

The top gainers on the Nifty were Reliance Power up 3.75%, Sun Pharma up 1.82%, Jindal Steel up 1.61%, Ranbaxy up 1.49% and Reliance Communications up 0.99%.

BHEL down 8.86%, Sterlite down 5.55%, JP Associates down 5.01%, Hindalco down 4.26% and M&M down 4.19% were the major losers on the index.

In the Asian space, Shanghai Composite plunged 1.47%, Hang Seng plummeted 1.66%, Jakarta Composite got pounded by 2.23%, Nikkei 225 slipped 0.54%, Strait Times dived 1.09% and Seoul Composite sank 1.24%. On the flipside only Taiwan Weighted spurted with 2.40%.

The European markets were trading in red with, France’s CAC 40 descended 0.74%, Germany’s DAX shed 0.54% and Britain’s FTSE 100 dropped 0.43%.