Sensex slips to day’s lows in noon trades; IT and Metal stocks drag

Stock markets in Indian, after showing the signs of consolidation through the morning trades, have succumbed to the selling pressure with the frontline equity indices drifting to low point of the day. The benchmark indices, which suffered severe pounding in previous session, failed to regain the lost ground and extended their declining run for third straight session since sentiments got undermined after the somber European market opening where major equity indices coming from an extended weekend traded with large cuts of over a percent. The Asian markets too exhibited mixed trends as on one hand Chinese markets climbed after reporting an unexpected trade surplus for March while the Japanese bourses dipped into the red after Bank of Japan kept monetary policy steady, holding fire until a more thorough assessment of the economy at another rate review on April 27. Back home, IGL got severely bludgeoned by over thirty percent on the back of reports that the Petroleum and Natural Gas Regulatory Board (PNGRB) has fixed the new tariff and compression charges for the company. Other gas stocks like GAIL India, Gujrat Gas, Petronet LNG too got tormented in the session. Meanwhile foods stocks like LT Foods, Kohinoor Foods and KRBL spurted in the session as after almost a decade, Indian basmati rice exporters have now started direct shipments to Iran. Besides, investors were seen squaring off hefty positions from the IT counter while Metal pocket too bore the brunt of hefty selling pressure. On the other hand only the defensive Healthcare and FMCG sectors kept their head above the water.

Moreover, the broader markets traded on a weak note with the Mid Cap index underperforming all its peers as it traded with relatively higher loss. The bourses consolidated on weak volumes of over Rs 0.5 lakh crore while the market breadth on BSE was in favor of declines in the ratio of 1331:1102 while 147 scrips remained unchanged.

The BSE Sensex is currently trading at 17,171.18 down by 50.96 points or 0.30% after trading as high as 17,274.69 and as low as 17,151.78. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading on a weak note; the BSE Mid cap index lost 0.65% and Small cap shed 0.33%.

On the BSE sectoral space, FMCG up 1.46%, Auto up 0.26% and Healthcare up 0.05% were the only gainers, while IT down 1.39%, Metal down 1.25%, TECk down 1.14%, Consumer Durables down 0.96% and Capital Goods down 0.81% were the major laggards in the space.

HUL up 2.28%, Tata Power up 1.69%, ITC up 1.54%, Sun Pharma up 1.52% and Wipro up 1.46% were the major gainers on the Sensex, while Gail India down 3.07%, Infosys down 2.58%, Hindalco down 1.66%, Tata Steel down 1.59% and Coal India down 1.32% were the major losers in the index.

Meanwhile, the rating agency, CRISIL, in a bid to capture demand-side pressures on prices has released a new indicator for inflation called the Crisil Core Inflation Indicator (CCII). The indicator is derived from the existing Wholesale Price Index (WPI) and is expected to supplement the existing indicators that influence the Reserve Bank of India’s (RBI) interest rate decisions.

As per the rating agency, a good core inflation measure should exclude the impact of temporary movement in overall inflation, and the CCII does just that. CCII includes processed food and metal products to take into account the second-round of impact of supply shocks and it excludes base metal prices which are directly influenced by international prices.

It plans to release the CCII every month using WPI data published by the Ministry of Industry and Commerce. As per its first forecasts, it expects inflation to drop to around 4% in 2012-13 from nearly 7% in 2011-12. This is expected to create a conducive environment for rate cuts by the RBI. However, the timing and quantum of the cuts will depend on other factors such as oil prices and the government's actions towards fiscal consolidation.

The government has recently started releasing the Consumer Price Index (CPI) along with the traditional wholesale price index (WPI) in a bid to gauge the impact of price rise on the actual consumer. Also the RBI is expected to release its monetary policy on the 17th of this month.

The S&P CNX Nifty is currently trading at 5,227.10, lower by 7.30 points or 0.14% after trading as high as 5,255.80 and as low as 5,214.15. There were 20 stocks advancing against 30 declines on the index.

The top gainers on the Nifty were Tata Power up 2.54%, Cairn up 2.29%, HUL up 2.27%, ITC up 1.81% and Sun Pharma up 1.75%.

GAIL down 2.99%, Infosys down 2.58%, Sesa Goa down 2.12%, JP Associates down 2% and Dr Reddy’s down 1.76% were the major losers on the index.

In the Asian space, Shanghai Composite climbed 0.65%, Jakarta Composite added 0.22%, KLSE Composite advanced 0.35%, Straits Times amassed 0.52% and Taiwan Weighted rose 0.52%.

On the flipside, Hang Seng plunged 1.01%, Nikkei 225 eased 0.09% and Seoul Composite shed 0.13%.

The European markets were trading in red as France’s CAC 40 plunged 1.18%, Germany’s DAX plummeted 1.07% and Britain’s FTSE 100 sank 0.74%.