Benchmarks trade in red; Consumer Durables, TECK drag

Indian equity benchmarks continued its weak trade in the late afternoon session on account of selling in frontline blue chip counters. Traders were seen selling in Consumer Durables, TECK and Bankex sector stocks. In scrip specific development, Jindal Steel & Power (JSPL) tumbled after a special court ordered framing of charges against Naveen Jindal, vice-chairman and MD of Jindal Steel and 14 others for criminal conspiracy, cheating and other offences in a coal block allocation scam case. ICICI Bank was trading in red after its Q4 net declined by 76% to Rs 702 crore on exceptional provisions of Rs 3,600 crore. Idea Cellular tumbled after the company’s net profit declined 39% to Rs 575.6 crore in the March quarter due to a spike in finance costs.

On the global front, the Asian markets were trading in red while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,850 and 25,500 levels respectively. The market breadth on BSE was negative in the ratio of 864:1481 while 159 scrips remained unchanged.

The BSE Sensex is currently trading at 25466.29, down by 136.81 points or 0.53% after trading in a range of 25430.04 and 25755.43. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.51%, while Small cap index down by 0.75%.

The losing sectoral indices on the BSE were Consumer Durables down by 1.19%, TECK down by 0.82%, Bankex down by 0.79%, PSU down by 0.75%, Metal down by 0.73%.

The top gainers on the Sensex were Lupin up by 1.67%, Cipla up by 1.38%, Sun Pharma Inds. up by 0.74%, Maruti Suzuki up by 0.51% and HDFC Bank up by 0.39%.

On the flip side, Bharti Airtel down by 2.78%, ICICI Bank down by 2.73%, SBI down by 2.47%, GAIL India down by 1.99% and Tata Motors down by 1.44% were the top losers.

Meanwhile, the World Bank in its report 'Stitches to Riches Apparel Employment, Trade and Economic Development in South Asia' has said that a potential 10 per cent rise in apparel prices in China, which has seen a sustained rise in its wage costs in recent years, could help India create at least 1.2 million new jobs in its labour-intensive garment industry. This could be opportunity for India to focus on apparel in productively employing its huge working-age population.

The report said that the women are expected to benefit the most as their share in the total apparel employment is much higher than their share in other industries. Even 1 per cent increase in expected wages in the textiles and apparel industry could raise the probability of women entering the labour force by 18.9 per cent. It further said that apparel manufacturing not only has a huge potential for creating jobs, particularly for the poor but also has a unique ability to attract women workers. Employed women are more likely to create positive social impact as they tend to spend their income on the health and education of children

The report suggests various measures to help increase apparel exports from India like rise in product diversity by reducing tariffs and import barriers to ease access to manmade fibers. It also suggests lower excise taxes or other incentives to develop a domestic manmade fiber industry and improving productivity by helping firms enter the formal sector and take advantage of economies of scale with less complex labour laws.

Furthermore, the report said that the potential decrease in Chinese exports presents a huge opportunity for South Asian countries, which currently account for 12 percent of global apparel exports. Though India is gaining market share, Southeast Asian countries (Cambodia, Indonesia, and Vietnam) are outperforming all South Asian countries in overall apparel export performance, product diversity, and other non-cost related factors. The report suggested that for India to take advantage it needs to move quickly to ease barriers to the import of manmade fibers, facilitate market access and encourage foreign investment to reach more end markets, which would also yield dividends for other light manufacturers like footwear and toy.

The CNX Nifty is currently trading at 7800.90, down by 46.35 points or 0.59% after trading in a range of 7788.70 and 7889.05. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Lupin up by 1.66%, Zee Entertainment up by 1.42%, Cipla up by 1.27%, Kotak Mahindra Bank up by 0.93% and BPCL up by 0.89%.

On the flip side, Idea Cellular down by 7.79%, HCL Tech. down by 6.03%, Bank of Baroda down by 3.24%, Bharti Airtel down by 2.91% and ICICI Bank down by 2.67% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 320.98 points or 1.5% to 21,067.05, Taiwan Weighted decreased 95.97 points or 1.13% to 8,377.90, Jakarta Composite decreased 20.12 points or 0.41% to 4,828.27, FTSE Bursa Malaysia KLCI decreased 12.27 points or 0.73% to 1,662.49, Shanghai Composite decreased 7.26 points or 0.25% to 2,938.32 and KOSPI Index decreased 6.78 points or 0.34% to 1,994.15.

Japanese stock exchange was closed on account of ‘Showa Day’ holiday.

The European markets were trading in red; UK’s FTSE 100 decreased 48.55 points or 0.77% to 6,273.85, Germany’s DAX decreased 109.04 points or 1.06% to 10,212.11 and France’s CAC decreased 64.62 points or 1.42% to 4,492.74.