Benchmarks continue weak trade in late afternoon session

Indian equity benchmarks continued its weak trade in the late afternoon session on account of selling in frontline blue chip counters as a rally in oil prices reversed and cautiousness prevailed about the outlook for the global economy. Investors also maintained a cautious approach after Fitch Ratings stated that with many PSU banks’ profitability taking a big hit, their credit profile will come under pressure unless they are adequately capitalized. It pointed to significant quarterly losses at several large public sector banks (PSBs) last week, underscoring long-standing balance-sheet and capital risks stemming from legacy issues pertaining to poor asset quality and weak provisioning. Traders were seen piling positions in Consumer Durables, Auto and TECK stocks while selling was witnessed in Oil & Gas, Capital Goods and FMCG sector stocks. In scrip specific development, United Spirits (USL) was trading firm after a foreign brokerage firm upgraded United Spirits to outperform from neutral with a higher price target. The firm stated that Diageo could potentially raise its stake in USL and re-launch of Royal Challenge whisky has been a huge success. Jet Airways was trading in green on reports that Abu Dhabi-based Etihad Airways may increase its stake in the domestic carrier.

On the global front, the Asian markets were trading mostly in red while the European markets were trading mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,200 and 23,700 levels respectively. The market breadth on BSE was negative in the ratio of 1031:1265 while 148 scrips remained unchanged.

The BSE Sensex is currently trading at 23622.28, down by 26.94 points or 0.11% after trading in a range of 23508.36 and 23692.45. There were 14 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index down by 0.09%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.42%, Auto up by 0.38%, TECK up by 0.27%, Power up by 0.18%, IT up by 0.16% while, Oil & Gas down by 1.37%, Capital Goods down by 0.56%, FMCG down by 0.44%, Metal down by 0.24%, PSU down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.66%, Hero MotoCorp up by 2.23%, ICICI Bank up by 1.84%, Mahindra & Mahindra up by 1.83% and Bharti Airtel up by 1.54%.

On the flip side, Maruti Suzuki down by 2.04%, BHEL down by 1.73%, Axis Bank down by 1.55%, Coal India down by 1.54% and HDFC down by 1.37% were the top losers.

Meanwhile, showing disappointment, US Ambassador to India Richard Rahul Verma has said that the absence of a bilateral investment treaty (BIT) between India and US is an 'impediment' to expanding trade and investment between the countries. He said “It is about tax certainty, tax fairness, it is about reducing regulatory burden, it is about ensuring there is adequate infrastructure, power it is also about law, it is about legal service about access to courts it is about embracing international arbitration”.

Besides, he said that there has been 'significant progress' in the ease of doing business scenario in India. The ease of doing business is a catch all term that incorporates a lot of different concepts. He has also urged the government to permit US law firms and lawyers to set up base in India, calling for 'reciprocity' saying there was no citizenship requirement for Indian lawyers who wish to establish offices in the US.

Earlier this month, the Barack Obama administration expressed its concern that the proposed India-US Bilateral Investment Treaty is not ambitious enough to attract American investors to India and would rather preferred an agreement similar to the ones India has signed with Japan and South Korea. It felt that current form of agreement does not provide robust market access and said that Indian government has to make attractive offers for concluding the BIT as the Obama administration has entered its last leg.

The CNX Nifty is currently trading at 7180.35, down by 11.40 points or 0.16% after trading in a range of 7145.95 and 7202.20. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were PNB up by 4.62%, Hero MotoCorp up by 2.51%, SBI up by 2.47%, ICICI Bank up by 1.78% and Mahindra & Mahindra up by 1.76%.

On the flip side, BPCL down by 3.01%, Vedanta down by 2.50%, Maruti Suzuki down by 1.94%, BHEL down by 1.74% and Coal India down by 1.73% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 229.63 points or 1.42% to 15,967.17, Jakarta Composite decreased 88.78 points or 1.86% to 4,690.01, Hang Seng decreased 77.58 points or 0.4% to 19,285.50, FTSE Bursa Malaysia KLCI decreased 4.17 points or 0.25% to 1,675.85 and Shanghai Composite decreased 2.87 points or 0.1% to 2,860.02.

On the other hand, KOSPI Index increased 7.4 points or 0.39% to 1,916.24 and Taiwan Weighted increased 10.37 points or 0.12% to 8,325.04.

The European markets were trading mostly in red; Germany’s DAX decreased 46.48 points or 0.49% to 9,417.16, France’s CAC decreased 4.11 points or 0.1% to 4,235.65 while, UK’s FTSE 100 increased 1.42 points or 0.02% to 5,973.37.