Indian equities weaken further; Nifty below 5,200 level

Indian equities have weakened further to trade below neutral line in the late afternoon session as investors lacked conviction to add fresh positions. Traders were seen piling up position in IT, TECk and Consumer Durables sector, while selling was being witnessed in Realty, Metal and PSU sector. Besides, investors are also closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings for the further direction. Banking sectors were buzzing on reports that the Cabinet has cleared the much awaited Banking Law (Amendment) Bill. IT counters Infosys, TCS and Wipro were trading in green but are under pressure since Standard & Poor's Ratings Services had revised the rating outlooks on them to negative from stable. In the scrip specific development, Hindustan Construction Company (HCC) slipped after company reported a higher than expected net loss for the fourth quarter of FY12. ICICI Bank rallied amid heavy volumes post the bank reported quite better than expected numbers for the fourth quarter of FY12. Industry heavyweight, Reliance Industries was trading weak in red after the company reported natural gas production from its eastern offshore KG-D6 fields dropped to less than 34 million standard cubic meters a day.

On the global front, all the Asian markets were trading in red barring Seoul Composite, while the European markets recovering from their initial fall were trading in green on optimistic note. Standard & Poor's has cut its credit rating on Spain by two notches, reviving worries over the debt-stricken country. S&P, citing expectations Spain's finances will deteriorate even more than previously thought due to the recession and the country's ailing banking sector, downgraded Spain to BBB-plus with a negative outlook, saying the situation could deteriorate further unless strong measures were taken at a European level.

On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,200 and 17,100 levels respectively. The market breadth on BSE was negative in the ratio of 1081:1562 while 110 scrips remained unchanged.

The BSE Sensex is currently trading lower by 44.14 points or 0.26% at 17,086.53. The index has touched a high and low of 17,242.15 and 17,022.09 respectively.   There were 9 stocks advancing against 21 declining ones on the index.

The broader indices continue to trade weak; the BSE Mid cap and Small cap indices were down by 0.34% and 0.64% respectively.

Realty down by 1.80%, Metal down by 1.27%, PSU down by 0.90%, FMCG up 0.82% and Capital Goods down by 0.72% were top losers on the index. On the other hand, the top gaining sectoral indices on the BSE were, IT up by 0.89%, TECk up by 0.43%, Consumer Durables up by 0.19% and Bankex up by 0.10%.

The top losers on the Sensex were Coal India down by 2.39%, DLF down by 2.31%, SBI down by 2.19%, Jindal Steel down by 1.91% and Tata Steel down by 1.88%.

On the flip side, ICICI Bank up by 2.98%, M&M up by 1.06%, Infosys up by 0.84%, GAIL India up by 0.71% and Hindalco Industries up by 0.69% were the top gainers of the index.

Meanwhile, a parliamentary panel has recommended that issues between Coal India (CIL) and power companies should be resolved at the earliest to prevent an impending energy crisis. The panel has further stated that CIL should enter into fuel supply agreements (FSA) immediately and not delay the process by raising ‘trivial issues’.

The panel, in a report tabled in Parliament, has said that the working group on coal and lignite for the 12th Plan period has projected 615 million tonnes production by Coal India. This means that the coal companies will have sufficient coal stocks to meet requirements of the power plants. Hence they should enter into FSAs and act on the basis of such agreement immediately.

Earlier this month, the government had issued a Presidential Directive to CIL to commit a minimum of 80% coal supply to the power producers, failing which the company would be subject to a penalty. CIL in its board meeting last week approved signing of the agreements with the power producers and put in penalty clause stating that failure to supply at least 80% of the committed quantity to the power firms would attract a penalty of 0.01%. The penalty clause would be operational after three years. However this has not gone down well with power companies.

According to the Planning Commission's estimates, the country's energy supply needs to grow at 6.5% annually if the nation wants to achieve annual economic growth of 9% during the plan period.

The S&P CNX Nifty is currently trading at 5,182.65, lower by 6.35 points. The index has touched a high and low of 5,223.05 and 5,154.30 respectively. There were 18 stocks advancing against 32 declining ones on the index.

IDFC down by 2.97%, SAIL down by 2.56%, Coal India down by 2.48%, SBI down by 2.24% and DLF down by 2.09% were the top losers on Nifty 50 index. On the flip side, ICICI Bank up by 3.51%, Siemens up by 2.28%, Axis Bank up by 2.21%, HCL Tech up by 1.80% and Infosys up by 1.22% were the top gainers of the index.

Asian market were largely trading in red; Hang Seng slid 0.33%, Straits Times declined 0.11%, Shanghai Composite lost 0.35%, Jakarta Composite surrendered by 0.40%, KLSE Composite shed 0.81%, Nikkei 225 was beaten down by 0.43% and Taiwan Weighted cooled off by 0.54%. However, Seoul Composite was up by 0.58% and was the sole gainer amongst the Asian pack.

The European markets were trading in green with France’s CAC 40 added 0.15%, Germany’s DAX ascended 0.07% and Britain’s FTSE 100 gained 0.22%.