Indian equity markets ease a bit from intra-day’s low; RIL remains in focus

Indian equity markets have eased a bit from intra-day’s low as barometer gauges have cut short their losses after their lackluster opening. Bourses apparently are consolidating after a rally of more than 400 points this week. Index heavyweight Reliance Industries continues to be under pressure ahead of fourth quarter earnings today after market hours. Oil-to-yarn and retail conglomerate is expected to post a year-on-year (y-o-y) decline in profit for the second quarter in a row as margins in its core businesses of refining and petrochemicals continue to be under pressure. A consensus of estimates pegs consolidated net profit of the group at Rs 4,434.5 crore, down 17.5% from the year earlier, despite revenue seen 26.3% higher at Rs. 91,813.35 crore. However, on the flip side, surge of Cairn India, ahead of its quarterly results is seen to positive guiding the market.

Stocks from Consumer Durable, TECk and Information Technology counters are directing the market forces in the green terrain, however, strong resistance from stocks belonging to the Oil & Gas, Capital Goods, (CG) Power and Bankex counters led to the downturn of the bourses.

Bleak global cues are also spelling pessimism across Indian equity markets. Asian shares tanked after disappointing U.S. economic data stirred doubts about the strength of the recovery and also a better-than-feared Spanish bond auction failed to allay concerns that Spain may follow Greece, Ireland and Portugal in needing an international bailout. Meanwhile, US future indices were indicating an uptick in the screen trade.

Back on the home turf, 30 scrip sensitive benchmark index of BSE-Sensex-after losing above 25 points was trading sub 17500 crucial level. The broader indices, however, doing well from themselves, were outperforming the benchmarks. The widely followed index of National Stock Exchange (NSE)-Nifty- gyrating in a thin band was trading in proximity to its neutral line, which was above 5300 bastion. The overall market breadth was in the favour of advances which thumped declines in the ratio of 1289:867, while 81 shares remained unchanged.

The BSE Sensex is currently trading lower by 26.27 points or 0.15% at 17,477.44. The index has touched a high and low of 17,507.90 and 17,442.23 respectively.   There were 16 stocks advancing against 14 declines on the index.

The broader indices, doing well for themselves, kept outperforming benchmarks; the BSE Mid cap and Small cap indices surged by 0.18% and 0.53% respectively.

The top gaining sectoral indices on the BSE were CD up by 0.74%, TECk up by 0.60%, IT up by 0.49%, Auto up by 0.42% and Metal up by 0.10%. While, Oil & Gas down by 0.55%, CG down by 0.38%, Power down by 0.17%, Bankex down by 0.11% and Health Care (HC) down by 0.11% were the top losers on the index.

The top gainers on the Sensex were Mahindra &Mahindra up by 1.95%, Maruti Suzuki up by 1.60%, Bharti Airtel up by 1.13%, Tata Steel up by 0.97% and Cipla up by 0.81%.

On the flip side, RIL down by 1.18%, Coal India down by 1.08%, HUL down by 0.90%, Tata Power down by 0.88% and Tata Motors down by 0.80% were the top losers on the Sensex.

Meanwhile, Major economic reforms are unlikely to happen before the next Parliamentary elections in 2014. As per Chief Economic Advisor, Kaushik Basu there is a slowdown in decision making.  The unearthing of a series of corruption and scams is having its impact on the psyche of the bureaucracy, who is currently not willing to take risks.

Also a coalition government, the ongoing battle against inflation, slackening of the global economy and drop in agricultural production have slowed the reform process. However, reforms are expected to pick up after 2015 when the new government comes to power. The new government, if in majority, would start with the reforms in a big way because there is a sense that they need to pick up urgently.

Post 2014 a rush of important reforms would come and after 2015 it is expected that India would be one of the fastest growing economies of the world. Opening up of the retail sector has been identified as a major reform.

Basu, who is accompanying Finance Minister Pranab Mukherjee to the IMF- World Bank meet, has made these observations while addressing the concerns expressed by the US corporate on some recent decisions of the Indian government and its reluctance to initiate the series of next phase of reforms.  The S&P CNX Nifty is currently trading at 5,326.35, down by 6.05 points or 0.11%. The index has touched a high and low of 5,334.95 and 5,310.55 respectively.  There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were M&M up by 1.90%, Maruti Suzuki up by 1.47%, Reliance Communication up by 1.39%, Bharti Airtel up by 1.07% and Tata Steel up by 1.04%.

On the flip side, ACC down by 3.29%, Ambuja Cement down by 2.34%, Reliance Industries down by 1.25%, IDFC down by 1.20% and Coal India down by 1.06% were the major losers on the index.

Most of the Asian equity indices were trading in red terrain; Hang Seng slid 0.26%, KLSE Composite lost 0.07%, Nikkei 225 declined by 0.37%, Straits Times fell 0.08%, Seoul Composite plunged by 1.31% and Taiwan Weighted plummeted by 1.30%. On the flip side, Shanghai Composite gained 0.71%, while Jakarta Composite was trading flat with positive bias.