Markets slip into red, broader indices bleed

Indian markets have drifted lower in the early noon session mainly owing to the weakness in the broader indices, though the bluechips are holding up gains but the weakness in high beta rate sensitive sectors have taken the markets in negative terrain. Though in a positive development C Rangarajan, economic advisor to the Prime Minister head of the PMEAC has said that country’s rate of growth in financial year 11-12 is estimated at 7.1%, which is shade higher than advance GDP estimates of the CSO. Though he admitted that manufacturing has not been doing well, but the FY12 farm growth is seen higher at 3%, while the economic growth for the coming year is seen at 7.5%-8%. Back on street, along with the broader indices banking, capital goods, consumer durable and metal stocks are dragging the markets. However, the Asian peers continue to trade mixed with some indices drifting back into green.

The BSE Sensex is currently trading at 18,350.40, down by 78.21 points or 0.42%. The index has touched a high and a low of 18,523.78 and 18,339.15 respectively. There were 11 stocks advancing against 19 declines on the index.

The broader indices were underperforming benchmarks; the BSE Mid cap and Small cap indices have lost 1.28% and 1.09% respectively.

The top gaining sectoral indices on the BSE were IT 0.96%, Oil & Gas up by 0.75%, TECk was up by 0.31% and HC was up by 0.12%. While, realty down by 2.98%, CD down by 2.65%, Bankex down by 2.06%, metal down by 1.73% and Power down by 1.13% were the top losers on the index.

The top gainers on the Sensex were TCS 1.84%, Sunpharma 1.78%, ONGC up by 1.35%, Infosys was up by 1.18% and Hero MotoCorp was up by 1.17%

On the flip side, SBI down by 4.19%, Sterlite Inds 4.05%, DLF 3.85%, Jindal Steel 2.54% and ICICI Bank 1.70% were the top losers on the Sensex.

Meanwhile, the Finance Minister, Pranab Mukherjee has reaffirmed his government’s commitment to bring in 51% FDI in multi brand retail and has stated that a timeline for the same could be expected in the upcoming budget on March 16. The Minister has further said that his government is committed to the process of reforms is keen to see India on the path of double digit growth. 

India’s GDP growth is expected to come down to 6.9% in this fiscal from its earlier trajectory of 8-9%. As per the FM, the central bank’s anti-inflationary stance has hurt the country’s economic growth. However FM is confident that the slowdown is temporary and India will be back on the path of high growth soon. Mukherjee has stressed that for sustainable growth can be achieved only when it is broad based and is spread across sectors. FM has also emphasized on improving factor productivity through technological innovations and process reengineering, and has said that the country needs to focus on three key areas - education and knowledge creation, creation and strengthening of a competitive environment to support private enterprise, and a greater focus on research and design in enterprises and institutions of higher learning.

Further, the FM said, government had now put in place the New Manufacturing Policy to give a big push to the manufacturing sector with the objective of increasing its share in the GDP to 25% and create 100 million jobs in the next ten years.

Reiterating his government’s commitment to reforms, Mukherjee has stated that India cannot afford to keep its doors shut at a time when it needs foreign investment the most. FM has further stressed that opening up multi-brand retail to foreign investments is very much on the UPA Government's agenda and a consensus to implement the decision is being worked out.

FDI in multi brand retail will enable entry of large retail chains in India and is expected to benefit consumers by helping address inflation concerns through price reductions due to lesser margins effected by retail giants like Walmart. It is also expected to cut agri-waste by improving the supply chain, bringing in distribution efficiencies, coupled with capacity building and induction of modern technology, also farmers will get a better price for their produce as they will be able to sell their produce directly to retailers, thereby reducing margins for middlemen. Investments in cold-storage and warehousing will ease supply-side pressures thereby easing inflation.

The S&P CNX Nifty is currently trading at 5,579.25, down by 27.90 points or 0.50%. The index has touched a high and a low of 5,629.95 and 5,573.35 respectively.  There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 2.53%, BPCL up by 1.78%, TCS up by 1.73%, Sun Pharma up by 1.66% and ONGC was up by 1.42%

SBI down by 4.53%, DLF down by 4.37%, Sterlite Inds down by 3.98%, Jindal Steel down by 3.02% and PNB down by 2.87% were the major losers on the index.

The Asian equity indices were trading mixed, Shanghai Composite was up by 0.65%, Hang Seng was up by 0.14%, Nikkei 225 was up by 0.96%, Seoul Composite gained 0.22% and Taiwan Weighted was up by 1.01%.

On the flip side, Jakarta Composite lost 0.54%, KLSE Composite was lower by 0.03%, Straits Times has lost 0.58%.