Weakness persist in markets; Nifty below 5,300 mark

Weakness continues in the market and currently trading near the low point of the day because of sustained selling at several front line stocks from across various sectors. Nifty trading below 5,300 mark while Sensex plunged by more than 200 points. However, concerns of election results and weakness in global markets amid worries about the economic outlook have contributed to the market's decline. Investors were trading cautiously with no big positive triggers to warrant strong buying. On sectoral front, all sectors were trading in red, where metal, capital goods and realty stocks were down with notable losses. Banking stocks slipped on ebbing hopes of an interest rate cut in the Reserve Bank of India's policy review on March 15. Meanwhile Tata Motors rose 1% after reports that its Jaguar Land Rover unit is seeking regulatory approvals for a joint venture with China's Chery Automobile Co. On the global front, Asian shares are also trading lower on negative global cues. Back home, the market breadth favoring the negative trend; there were 1,001 shares on the gaining side against 1,425 shares on the losing side while 107 shares remained unchanged.

The BSE Sensex is currently trading at 17,434.68, down by 202.31 points or 1.15%. The index has touched a high and a low of 17,598.42 and 17,408.39 respectively. There were 4 stocks advancing against 26 declining ones on the index.

The broader indices too continued to meander into negative territory; the BSE Mid cap and small cap indices declined by 0.72% and 0.27% respectively.

Selling was witnessed across the board, however, Metal down by 2.38%, Bankex down by 1.87%, CG down by 1.76%, CD down by 1.61% and Realty down by 1.36% were the top losers on the index, while there is no gainer on the BSE sectoral space.

The top gainers on the Sensex were Bharti Airtel up by 1.05%, Tata Motors up by 0.97%, Maruti Suzuki up by 0.76% and Cipla up by 0.30%.

On the flip side, Jindal Steel down by 4.21%, Hindalco Industries down by 3.55%, DLF down by 2.61%, Hero MotoCorp down by 2.56% and Gail India down by 2.34% were the top losers on the Sensex.

Meanwhile, the cement prices are expected to rise in the coming months, as per the Center for Monitoring Indian Economy (CMIE). Prices are likely to go up by 6.4% in FY’12 (after falling in the last fiscal) and are expected to increase by 3.8% in FY’13. Demand on the other hand, is expected to grow by a modest 4% in the last quarter of FY’12.

The rise in cement prices has been attributed to the rise in input and manufacturing costs.  Prices of power and fuel cost have risen by 10.7% year-on-year (y-o-y) in FY’12 due to higher coal prices (both domestic and imports) and the cheaper rupee against the dollar. Also freight costs have been higher by 12.5% y-o-y due to increase in diesel costs and surcharge levied by railways. As a result cement prices in its largest market Mumbai, have gone up from Rs 248 in January 2011 to Rs 292 in January 2012.

However, the slowdown in demand has come in as a greater worry as major cement companies have reported a moderation in demand. For the industry as a whole, for FY’12, 31 million tonne per annum of capacity is expected to be added as against 55 million tonne added in 2010-11.

ACC, the leading cement producer, has reported a production of 2.14 million tonne for the month of Feb 2012 as against 1.97 million tonne in the corresponding period in 2011. Its dispatches increased from 2 million tonne in February 2011 to 2.15 million tonne in Feb 2012. Output of Ambuja Cement shot up from 17.91 lakh tonne in February 2011 to 19.93 lakh tonne last month. The dispatches rose from 17.74 lakh tonne in February 2011 to 20 lakh tonne in February 2012.

Cement production of UltraTech moved up by 3.02% at 357.28 lakh tonne for the period April-February FY ’12 as against 346.82 lakh tonne during April-February FY11. Its dispatches moved up by 3.2% at 357.41 lakh tonne in April-February FY’12 as compared to 346.33 lakh tonne in the corresponding period last fiscal. Cement output of UltraTech for February 2012 stood higher by 4.96% at 34.68 lakh tonne and dispatches at 35.17 lakh tonne, up 5.67% over February 2011.

The S&P CNX Nifty is currently trading at 5,298.65, lower by 60.75 points or 1.13%. The index has touched a high and a low of 5,344.50 and 5,290.60 respectively. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 6.64%, Reliance Power up by 4.03%, Reliance Communication up by 2.21%, IDFC up by 1.57% and Bharti Airtel up by 1.09%.

On the flip side, Jaiprakash Associates down by 5.37%, Jindal Steel down by 4.44%, Hindalco down by 3.72%, Hero MotoCorp down by 2.96% and DLF down by 2.68%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined by 0.57%, Hang Seng plunged by 1.41%, Jakarta Composite  slid 0.42%, Nikkei 225 surrendered 0.83%, Straits Times was down by 0.15%, Seoul Composite shrank 0.93% and Taiwan Weighted plummeted 1.35%.

On the flip side, KLSE Composite up by 0.44% was the lone gainer amongst the Asian pack.