Indian equities continue to reel under pressure; Sensex below 17,500 level

Indian equities drifted lower further to continue its weak trade in red in the late afternoon session as investors booked profit largely across the board. The benchmark gauges have halted their three straight session gaining momentum and have dropped towards the psychological level. Investors were cautious after the latest data showed that growth in the services sector slipped to a five-month low in March 2012. Traders were seen piling up position in Power and IT sector while selling was witnessed in Realty, Metal and Bankex sector. Further, all eyes are set on IT bellwether Infosys March Q4, 2012 result which the company will announce it on April 13, 2012, further giving direction for the markets. The stock market will remain closed tomorrow April 05, 2012 on account of Mahavir Jayanti and again on Friday, April 06, 2012 on account of Good Friday. In the scrip specific development, Essar Oil was trading weak after Supreme Court dismissed the company’s petition in sales tax case. GAIL (India) was trading in red on reports that Petroleum and Natural Gas Regulatory Board has cut LPG pipeline tariff for moving natural gas through pipelines by 20-24%. Coal India dropped on reports that government has directed the company to sign 20-year fuel supply agreements with power producers within a week.

On the global front, Asian markets were trading in red while the European markets were too trading in red on pessimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,350 and 17,500 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 1238:1388 while 131 scrips remained unchanged.

The BSE Sensex is currently trading at 17,483.45 down by 113.97 points or 0.65% after trading as high as 17,553.26 and as low as 17,436.60. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a mix note; the BSE Mid cap index lost 0.24% while Small cap added 0.14%.

On the BSE sectoral space, Power up 0.24% and IT up 0.03% were the only gainers, while Realty down 1.95%, Metal down 1.17%, Bankex down 1.02%, Auto down 0.55% and Oil & Gas down 0.55% were the major laggards in the space.

BHEL up 3.29%, Maruti Suzuki up 0.99%, Hindalco Industries up 0.91%, ONGC up 0.59% and ITC up 0.40% were the major gainers on the Sensex, while Jindal Steel down 2.97%, GAIL India down 2.63%, ICICI Bank down 2.37%, Sterlite Industries down 2.08% and DLF down 2.03% were the major losers in the index.

Meanwhile, Indian economy is still rated high on the business confidence index preceded only by Brazil. The two developing economies topping the index only confirms the fact that the current global economy is being driven by emerging economies. The US economy has also gained a few points on the index whereas Japan continues to score low.

The global index called the Regus Business Confidence Index is a bi-annual index based on a survey of views on revenue, profit trends and expected growth. According to the latest report, which tracks the opinions of over 16,000 business managers and owners from 86 countries, business confidence in Brazil has reached 148 points in March followed by India 143 points. The benchmark average is set at 100 to indicate a neutral outlook.

India’s position has, however, dipped by 2 index points as compared to the earlier figures of September 2011. Brazil on the other hand has notched up 2 points. Japan is on the other end of the index scoring only 82 points.

As per the report, Indian companies reporting a growth in revenue has gone upto 69% as compared to 52% six months ago. However companies reporting profit growth has come down a tad bit by 1% and is at 58%. The report has also observed that in order to grasp the growth opportunities in a sustainable way, businesses globally are still looking to cut overheads without damaging their growth prospects.

Among other countries, Germany confirmed its place as the third most confident nation at 132 in spite of a negative variation on September 2011. Mexico and South Africa were up seven points and two points respectively at 109 and 117 while UK was down one point to 113. The United States rose 15 points to score a 105. The report said revenue growth at global level remains the same at 51 per cent in March 2012 compared to six months ago. However 75% of respondents expect revenue growth in the next six months.

The S&P CNX Nifty is currently trading at 5,320.80, lower by 37.70 points or 0.70% after trading as high as 5,338.40 and as low as 5,305.30. There were 12 stocks advancing against 38 declines on the index.

The top gainers on the Nifty were BHEL up 3.20%, Ranbaxy up 1.97%, Maruti Suzuki up 0.80%, Hindalco Industries up 0.80% and HCL Tech up 0.78%.

JP Associates down 3.50%, Jindal Steel down 3.12%, GAIL India down 2.93%, Reliance Communications down 2.64% and ICICI Bank down 2.46% were the major losers on the index.

In the Asian space, Jakarta Composite plunged 1.92%, KLSE Composite declined 0.47%, Nikkei 225 got thrashed by 2.29%, Straits Times drifted 0.84% and Seoul Composite plummeted 1.50%.

Meanwhile, markets in mainland China and Hong Kong remained closed on Wednesday on account of Qingming Festival while the Taiwanese markets were shut owing to Tomb Sweeping Day holiday.

The European markets were trading in red as France’s CAC 40 eased 1.09%, Germany’s DAX eased 1.17% and Britain’s FTSE 100 fell 0.66%.