Markets extend southward journey in noon deals

After entering into red terrain, Indian equity benchmarks have extended their southward march in noon deals with Sensex breaching 24,500 mark. Sentiments turned down-beat in noon deals thanks to fresh selling in capital goods, infrastructure, power and realty stocks. Sentiments also remained dampened on report that foreign institutional investors (FIIs) continued to become net sellers in equities. They sold net amount of about Rs 4,000 crore from equities in past seven trading sessions through secondary markets. Meanwhile, weaker-than-expected macroeconomic data too weighed down sentiments. On the global front, Asian equity markets were trading mostly in the green at this point of time, despite lingering headwinds over China and lower commodity prices.

Back home, software pack witnessed selling pressure, as India’s largest IT services company, Tata Consultancy Services (TCS), has put in a lacklustre performance in December quarter. The dollar revenue of the company dropped 0.3% to $4.15 billion, while net profit was flat sequentially at $926 million, impacted by deluge in Chennai. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include capital goods, realty and power. Sectors like public sector undertaking, metal, infrastructure, Utilities, telecom and healthcare too were trading with huge losses. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 363 shares on the gaining side against 2,279 shares on the losing side while 137 shares remain unchanged.

The BSE Sensex is currently trading at 24486.36, down by 195.67 points or 0.79% after trading in a range of 24479.91 and 24909.22. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.93%, while Small cap index down by 3.45%.

The losing sectoral indices on the BSE were Capital Goods down by 2.49%, Realty down by 2.05%, Power down by 2.05%, PSU down by 1.27%, Metal down by 1.17%, while there were no gainers on the index.

The top gainers on the Sensex were Tata Motors up by 1.65%, Mahindra & Mahindra up by 1.02%, Infosys up by 1.00%, Reliance Industries up by 0.76% and Sun Pharma Inds. up by 0.47%. On the flip side, Adani Ports &Special down by 4.36%, Larsen & Toubro down by 3.01%, TCS down by 2.48%, Lupin down by 2.25% and Axis Bank down by 2.20% were the top losers.

Meanwhile, rising for straight five months in a row, the retail or the Consumer Price Index (CPI) inflation for the month of December stood at 5.61 percent compared to 5.41 percent in November and 4.28 per cent in December 2014, on the back of costlier vegetables and cereals. This has limited the headroom for the Reserve Bank to lower rate next month.

As per the data released by the Ministry of Statistics and Programme Implementation, Consumer Price Index numbers on Base 2012=100 for Rural, Urban and Combined for the Month of December 2015 stood at 6.32%, 4.73% and 5.61% as against 5.95%, 4.71% and 5.41% in the month of November 2015. Meanwhile, Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of December 2015 stood at 6.41%, 6.31% and 6.40% respectively. The General Indices (Provisional) for the month of December 2015 for Rural, Urban and Combined are 127.9, 124.0 and 126.1 respectively. The CFPI for Rural, Urban and Combined for the same month are 131.2, 131.4 and 131.3 respectively.

Food inflation stood at nine month high of 6.4 per cent. Retail prices of cereals and products moved up by 2.12 per cent in December, from 1.7 per cent in November. The growth in prices in meat and fish stood out at 6.57 per cent as against 5.34 per cent in November while that of eggs was at 0.97 per cent, from 0.5 per cent in the previous month. Pulses continue to pose a big challenge for policymakers as the rate of price growth stood at 45.92 per cent, only marginally down from 46.08 per cent in November.

Retail inflation in the oil and fats category moved up to 7.06 per cent while that of fuel and light, it was 5.45 per cent. However, seasonal fruits turned cheaper in December, with inflation print at 0.64 per cent although vegetables prices grew 4.63 per cent.

The Reserve Bank of India (RBI) predicts inflation will accelerate to 5.8% by January 2016.The RBI takes into account retail inflation while formulating monetary policy. In its bi-monthly monetary policy review in the beginning of December, RBI Governor Raghuram Rajan had maintained status quo in its key repo rate as retail inflation has been on a rising trend for past few months.

The CNX Nifty is currently trading at 7455.35, down by 54.95 points or 0.73% after trading in a range of 7446.85 and 7585.95. There were 10 stocks advancing against 39 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Indusind Bank up by 2.37%, Tata Motors up by 1.58%, Mahindra & Mahindra up by 1.10%, Infosys up by 0.85% and BPCL up by 0.84%. On the flip side, Adani Ports & Special down by 4.71%, Vedanta down by 3.86%, Bank of Baroda down by 3.35%, Larsen & Toubro down by 2.89% and TCS down by 2.52% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 1.54 points or 0.09% to 1,642.91, KOSPI Index surged 25.42 points or 1.34% to 1,916.28, Jakarta Composite increased 38.5 points or 0.85% to 4,551.03, Taiwan Weighted gained 56.16 points or 0.72% to 7,824.61, Hang Seng added 404.01 points or 2.05% to 20,115.77 and Nikkei 225 was up by 496.67 points or 2.88% to 17,715.63. On the flip side, Shanghai Composite was down by 33.19 points or 1.1% to 2,989.67.