Benchmarks continue to trades red, led by capital goods and Auto

Indian equity benchmarks continue to trade in red in early noon session. Sentiments remained weak on lower-than-expected earnings by some bluechip companies so far amid sustained capital outflows by foreign funds. Besides, weak trade in other Asian markets on worries about tumbling oil prices and the slowing Chinese economy continued to weigh on the sentiments. Furthermore, sentiments were downbeat on report that India’s Services exports fell by 3.8 per cent year-on-year to $ 12.01 billion in November 2015. Traders were seen piling up positions in Metal, IT and Banking stocks, while selling was witnessed in Capital Goods, Auto, Oil & Gas, Reality and Consumer Durables sector stocks. 

On the global front, Asian markets were trading mostly in red, after weak US economic data and a massive fall in oil prices, which stoked further worries about a global economic downturn. Back home, broader markets came under huge selling pressure. The BSE Midcap index fell 1.24 percent, while the BSE Smallcap index slumped 2.54 percent. In scrip specific development, share of Indian Hotels company was trading down after company reported a sharp drop in net profit for the quarter ended December 31, 2015. 

The market breadth on BSE was negative, out of 2462 stocks traded, 325 stocks advanced, while 2050 stocks declined on the BSE.

The BSE Sensex is currently trading at 24396.38, down by 58.66 points or 0.24% after trading in a range of 24285.23 and 24524.85. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.37%, while Small cap index down by 2.51%.

The gaining sectoral indices on the BSE were Metal up by 0.71%, IT up by 0.28% and Bankex up by 0.22%, while Capital Goods down by 1.68%, Auto down by 1.40%, Oil & Gas down by 1.22%, Realty down by 1.19% and Consumer Durables down by 0.80% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.09%, GAIL India up by 1.90%, BHEL up by 1.79%, Axis Bank up by 1.63% and Lupin up by 1.28%. On the flip side, Bajaj Auto down by 3.18%, ONGC down by 2.96%, Dr. Reddys Lab down by 1.68%, Bharti Airtel down by 1.63% and Larsen & Toubro down by 1.54% were the top losers.

Meanwhile, minister of Food Processing Harsimrat Kaur Badal has said that as the Food Safety and Standards Authority of India (FSSAI) has streamlined the regulations to ease product approvals; she is optimistic that the foreign direct investment in the food processing sector will likely go up by at least 25 per cent. This will ease the process of doing and expanding business in the food processing sector. Badal said that “With the new regulations in place, the industry’s concerns regarding product approvals will be addressed to a large extent. And I am optimistic that in coming months, there will be an increase of 25 per cent FDI in the food processing sector.”

Badal stated that the approval process has been relaxed. Now the products with ingredients that are approved by the regulator may not require any approval, which will lead to more innovation and product launches and promote traditional food.

She pointed that the main argument was that proprietary food products, for which standards are not defined in the food safety and standards regulations, but have approved and standardised additives should not require product-by-product approval. This approach espoused by the Food Processing Ministry has now found favour with the regulator. The proprietary food has now been defined as an article of food that has not been standardised under the regulations but which contains approved ingredients and additives. From now on, such products may not require regulatory approval.

FSSAI has issued a notice for operationalisation of standards for proprietary food which mentions that proprietary food does not include dietary supplements, nutraceuticals and genetically modified food products, among others. And the responsibility for the safety of food products will be on food business operators. Besides, The regulator has also uploaded a list of more than 8,000 permitted food additives, the food items in which they can be used and the recommended maximum level.

The CNX Nifty is currently trading at 7421.10, down by 16.70 points or 0.22% after trading in a range of 7383.35 and 7463.65. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.13%, Bank of Baroda up by 2.77%, Tata Power up by 2.27%, GAIL India up by 1.97% and BHEL up by 1.83%. On the flip side, Cairn India down by 4.14%, ONGC down by 2.94%, Bajaj Auto down by 2.81%, Zee Entertainment down by 2.52% and Hero MotoCorp down by 1.80% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 177.44 points or 1.03% to 16,969.67, Hang Seng decreased 97.13 points or 0.5% to 19,423.64, Jakarta Composite decreased 37.68 points or 0.83% to 4,486.29 and FTSE Bursa Malaysia KLCI decreased 9.43 points or 0.58% to 1,619.12, while KOSPI Index increased 2.34 points or 0.12% to 1,881.21, Shanghai Composite increased 31.79 points or 1.1% to 2,932.76 and Taiwan Weighted increased 62.51 points or 0.81% to 7,824.52.