Benchmarks narrow losses; Nifty below 7,000 mark

Indian equity benchmarks narrowed losses and continued to trade in red in the late afternoon session on account of selling in frontline counters. Investors maintained a cautious approach ahead of Consumer Price Index (CPI) and Index of Industrial Production (IIP) data scheduled to be released later in the day. Traders were seen piling positions in Auto, FMCG and TECK stocks while selling was witnessed in Capital Goods, Oil & Gas and PSU sector stocks. In scrip specific development, Bharat Heavy Electricals (BHEL) tumbled after the company clocked a net loss of Rs 1,101.99 crore for the December quarter on lower revenues and higher expenses. The state-run power equipment maker had reported a net profit of Rs 212.60 crore in the corresponding quarter of last year. Unitech continued its trade in red after the company yesterday reported a consolidated net loss of Rs 16.10 crore for the quarter ended December 31, 2015. On the other hand, TeamLease Services was trading firm after debuting on the bourses at an issue price of Rs 850.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,000 and 23,000 levels respectively. The market breadth on BSE was negative in the ratio of 597:1849 while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 22950.01, down by 1.82 points or 0.01% after trading in a range of 22600.39 and 23116.27. 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 1.21%, while Small cap index down by 1.87%.

The gaining sectoral indices on the BSE were Auto up by 1.34%, FMCG up by 0.33%, TECK up by 0.24%, Power up by 0.08%, Bankex up by 0.05% while, Capital Goods down by 3.19%, Oil & Gas down by 2.21%, PSU down by 1.53%, Realty down by 1.44%, Metal down by 1.17% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 7.02%, Mahindra & Mahindra up by 3.68%, Axis Bank up by 3.03%, NTPC up by 1.57% and Bharti Airtel up by 1.39%.

On the flip side, BHEL down by 12.09%, Adani Ports &Special down by 4.85%, ONGC down by 4.61%, Larsen & Toubro down by 3.69% and Tata Steel down by 3.20% were the top losers.

Meanwhile, providing some relief to investors, Minister of State for Finance Jayant Sinha has said that the bad loan situation of public sector banks (PSBs) has been stabilized and steps are being taken to strengthen them. Sinha further said that the government has got the Non performing Asset (NPA) problem well in hand.

Besides, he said that the ministry and the Reserve Bank are working closely to fix the problem of non- NPAs. RBI has been conducting its asset quality review and stress tests. The problem of bad loans is one that is particularly acute in public-sector banks (PSBs), and so significant matching action is taken by their primary shareholder. Sinha said that the government is undertaking all the measures necessary to support PSBs which means both in terms of capital as well policy measures.

Meanwhile, after various public sector banks came up with result of steep fall in profits and many even reporting loss with sharp spike in loan write-offs and non-performing assets, Reserve Bank Governor Raghuram Rajan has said that the ongoing clean-up of bank balance sheets will help spur economic growth and improve the lenders’ profitability. He said “While the profitability of some banks may be impaired in the short-run, the system, once cleaned, will be able to support economic growth in a sustainable and profitable way.”

The CNX Nifty is currently trading at 6963.80, down by 12.55 points or 0.18% after trading in a range of 6869.00 and 7026.75. There were 21 stocks advancing against 28 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Tata Motors up by 6.31%, Mahindra & Mahindra up by 3.56%, Axis Bank up by 2.82%, Idea Cellular up by 2.17% and Ultratech Cement up by 2.03%.

On the flip side, BHEL down by 12.64%, ONGC down by 5.09%, BPCL down by 4.74%, Hindalco down by 4.63% and PNB down by 4.35% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 760.78 points or 4.84% to 14,952.61, Hang Seng decreased 226.22 points or 1.22% to 18,319.58, Jakarta Composite decreased 54.2 points or 1.13% to 4,721.66 and KOSPI Index decreased 26.26 points or 1.41% to 1,835.28.

On the other hand, FTSE Bursa Malaysia KLCI increased 2.08 points or 0.13% to 1,646.03.

The European markets were trading in green; UK’s FTSE 100 increased 75.86 points or 1.37% to 5,612.83, France’s CAC increased 38.08 points or 0.98% to 3,934.79 and Germany’s DAX increased 83.06 points or 0.95% to 8,835.93.