Benchmarks slip in opening trade; Sensex below 17,700 mark

The Indian equity markets have made a quite start with negative bias following weak Asian markets. All global markets were flat as investors adopted a wait and watch mode ahead of euro-zone finance ministers’ emergency meeting on Greek austerity deal. Back home, Sensex and Nifty lost their crucial 17,700 and 5,350 mark in the early trade, respectively on the back of profit booking as the bulls were finding it difficult to hold near resistance levels after the recent upmove. Meanwhile, amid subdued revenue mop-up and rising fiscal deficit, finance minister Pranab Mukherjee has voiced concerns over mounting subsidy bill, which may cross Budget estimate by Rs1 lakh crore in 2011-12. On the sectoral front, consumer durables witnessed the maximum gain in trade followed by power and realty while, software, technology and metal remained the top losers on the BSE sectoral space. Moreover, Hindalco has shed over 5 percent ahead of its quarterly numbers to be announced later today, Sterlite and Tata Steel from the metal pack has dipped 1-2% each. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,058 shares on the gaining side against 663 shares on the losing side while 66 shares remained unchanged.

The BSE Sensex opened at 17,647.80; about 60 points lower compared to its previous closing of 17,707.32 and has touched a high and a low of 17,685.71 and 17,612.39 respectively.

The index is currently trading at 17,636.63, down by 70.69 points or 0.40%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a positive start with 59.21% stocks advancing against 37.10% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.38% and 0.26% respectively.

The top gaining sectoral indices on the BSE were, CD up by 0.78%, Power up by 0.55%, Realty up by 0.44%, Auto up by 0.34% and PSU was up by 0.15%. While, IT down by 1.34%, TECk down by 1.15%, Metal down by 0.62%, CG down by 0.30% and FMCG down by 0.19% were the top losers on the index.

The top gainers on the Sensex were Jindal Steel up by 1.18%, Bajaj Auto up by 1.06%, BHEL up by 0.77%, NTPC up by 0.76% and Cipla up by 0.75%.

On the flip side, Hindalco was down by 5.28%, TCS was down by 2.15%, Bharti Airtel was down by 1.62%, Wipro was down by 1.30% and Tata Steel was down by 1.25% were the top losers on the Sensex.

Meanwhile, passenger cars have recorded a growth 7.2% in January 2012 as compared to the same month last year. Commercial vehicles grew by 13.52% and the growth figures for two wheelers stood at 13.63% in January 2012 as compared to January 2011. Three wheelers however, registered de-growth at (-) 3.49% in January, as per the data released by Society of Indian Automobile Manufacturers (SIAM).

Passenger cars saw the third consecutive monthly rise in this fiscal. Car sales had been registering a decline in sales since July 2011 after registering a 30% growth in the year ending March 2011. However, the growth in November-January is unlikely to make up for the losses suffered earlier unless sales grow in February-March at 10-12%. Since this is unlikely to happen, the auto industry will miss the sales projection for FY12. The industry had forecasted an increase in sales by 0-2% in FY12.

The overall sales growth rate recorded for April-January 2012 was 12.51%. Passenger vehicles segment recovered marginally at 1.45% during April-January 2012 over same period last year. Passenger cars recorded de-growth of (-) 1.19%, Utility Vehicles grew by 13.03% and Vans grew by 8.40% in this period. And growth in overall passenger vehicles was at 8.86% in the month of January 2012.

Indian car sales are mainly driven by a rapidly expanding middle class that is typically reliant on loans for purchases. This makes the car industry too sensitive to interest rates. Since interest rates are unlikely to come down in the near future, the car industry is not optimistic of meeting its forecasted growth. SIAM, however, expects vehicle sales to increase by 11-13% in the fiscal year starting on April 1, if the Reserve Bank of India begins to ease interest rates soon. The central bank had raised interest rates 13 times since March 2010 in its battle against stubborn inflation.

Growth in sales of commercial vehicles, seen as an indicator of economic activity, stood at 13.52% in January 2012 as compared to January 2011. The overall commercial vehicles segment registered growth of 18.63% during April-January 2012 as compared to the same period last year. Motorcycle sales, which have remained strong over the past year, rose by 10.51% last month. The increase is less than SIAM's growth rate forecast of 13-15% for the current fiscal year. During April-January 2012, motorcycles grew by 13.66%.

The S&P CNX Nifty opened at 5,343.05; about 25 points lower compared to its previous closing of 5,368.15, and has touched a high and a low of 5,359.80 and 5,341.05 respectively.

The index is currently trading at 5,348.05, lower by 19.40 points or 0.36%. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were RPower up by 2.55%, Cairn up by 2.33%, RCom up by 1.51%, Jindal Steel up by 1.44% and Kotak Bank up by 1.13%.

On the flip side, Hindalco down by 5.19%, TCS down by 2.14%, Bharti Airtel down by 1.51%, Tata Steel down by 1.39% and Axis Bank down by 1.22%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng was down 107.94 points or 0.51% to 20,910.52, Jakarta Composite was down 27.50 points or 0.69% to 3,961.20, Nikkei 225 was down 36.90 points or 0.41% to 8,978.69, Straits Times was down 4.10 points or 0.14% to 2,978.10 and Seoul Composite was down 14.90 points or 0.74% to 1,988.83.

On the flip side, Shanghai Composite was up by 0.37 points or 0.02% to 2,347.90 and Taiwan Weighted was up by 10.73 points or 0.14% to 7,880.64.