Indian equities continue to reel under pressure in the late afternoon session

Indian equities continued its weak trade in red in the late afternoon session. The sentiments continue to remain somber and investors ruthlessly butchered the rate sensitive counters like Realty and Banking as Indian central bank after a major action last week took a cautious stance and abstained from resorting to liquidity easing measures in its policy review. Traders were seen selling stocks from Realty, Bankex and Consumer Durables sector. Also, the finance ministry’s economic survey failed to give any significant upside triggers to the markets, instead the survey cautioned that attention should to given to the asset price bubbles in the real estate and stock markets and the risks associated with these, which carry implications for the real economy. ADA Group companies stocks Reliance Communication, Reliance Power, Reliance Infrastructure, Reliance Capital and Reliance Mediaworks were trading under pressure in red. Reliance Communications and Reliance Power both stocks will move out of the National Stock Exchange's 50-share Nifty index with effect from April 27 and would be replaced by Asian Paints and Bank of Baroda. Lot of activity was visible in stocks which are linked to Indian Railways a day after Union Railway Minister Dinesh Trivedi presented the Railway Budget 2012-13 in the Lok Sabha. Shares of companies like Container Corporation of India, Titagarh Wagons, Kalindee Rail Nirman, Stone India, Hind Rectifiers, Kernex Microsystems and Texmaco were the counters where lot of activity took place and selling continued for the second day.

On the global front, Asian markets were trading on a mix note while the European markets were too trading on mix note. The euro area member formally approved the second adjustment program for Greece, according to a statement from the president of the Euro group, Jean-Claude Juncker. Besides, Fitch Ratings upgraded Greece’s long-term foreign and local currency debt ratings to B- with stable outlook from Restricted Default. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,350 and 17,600 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 876:1805 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 17,673.67 down by 245.63 points or 1.37% after trading as high as 17,918.25 and as low as 17,623.22. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 1.23% while Small cap was down 0.87%.

On the BSE sectoral space there were no gainers, while Realty down 2.52%, Bankex down 2.51%, Consumer Durables down 2.42%, Capital Goods down 1.99% and PSU down 1.98% were the major losers in the space.

Hindustan Unilever up 0.96%, GAIL India up 0.91%, Tata Motors up 0.86%, NTPC up 0.76% and TCS up 0.48% were the major gainers on the Sensex, while DLF down 4.50%, Coal India down 2.87%, HDFC Bank down 2.86%, ONGC down 2.81% and BHEL down 2.74% were the major losers in the index.

Meanwhile, the Reserve Bank of India (RBI) has kept its policy rates unchanged in its mid-quarter monetary policy review. Even though the apex bank had recently slashed the CRR rate to ease liquidity, it has kept the interest rates unchanged due to the still uncomfortable levels of inflation. Going forward, the focus shall remain on growth, but the timing and magnitude of rate cuts shall be determined by the levels of inflation, as per the apex bank.

As per the RBI, on the domestic front, while most indicators suggest that the economy is slowing down, the performance in Q4 of 2011-12 is expected to be better than that in Q3. Inflation has broadly evolved along the projected trajectory so far. However, upside risks to inflation have increased from the recent surge in crude oil prices, fiscal slippage and rupee depreciation. Besides, there continues to be significant suppressed inflation in fuel, fertilizer and power as administered prices do not fully reflect the costs of production. While corporate sales growth in Q3 of 2011-12 was robust, margins moderated, reflecting increasing difficulty in passing on rising input prices.

The Central Bank has given a slightly positive outlook on the global economy. It has stated that the recent macroeconomic data for the US economy has shown some positive signs, in particular for the labour market. Immediate financial market pressures in the Euro area have also eased due to the European Central Bank (ECB) injecting liquidity of more than 1 trillion euros. However since the emerging and developing economies (EDEs) are showing signs a slowdown, the global growth for 2012 and 2013 is expected to be lower than earlier anticipated. Oil prices continue to remain a concern.

The S&P CNX Nifty is currently trading at 5,380.00, lower by 83.90 points or 1.54% after trading as high as 5,462.50 and as low as 5,367.00. There were 10 stocks advancing against 40 declines on the index.

The top gainers on the Nifty were HUL up 0.85%, NTPC up 0.65%, GAIL India up 0.60%, Tata Motors up 0.55% and Tata Steel up 0.51%.

DLF down 4.52%, JP Associates down 4.01%, IDFC down 3.93%, Reliance Communications down 3.84% and Reliance Infrastructure down 3.67% were the major losers on the index.

In the Asian space, Shanghai Composite slipped 0.73%, Straits Times eased 0.20%, Seoul Composite inched down 0.06%, Jakarta Composite dropped 0.11% and Taiwan Weighted fell 0.04%. On the other hand Hang Seng inched up 0.21%, KLSE Composite gained 0.07% and Nikkei 225 climbed 0.72%.

The European markets were trading on a mix note with, France’s CAC 40 ascended 0.12%, Germany’s DAX jumped 0.17% while Britain’s FTSE 100 shed 0.14%.