Indian equities trim losses; trade continue in red

Indian equities trim losses but continue to trade weak in red in the late afternoon session as conservative investors started nibbling the beaten down frontline blue chip counters. The nervousness spilled among investors ahead of the debate of Finance Bill 2012 in Lok Sabha which continued to weigh on the sentiment for the second day in a row. Sentiments in the session remained discouraging since the start of trade as investors largely remained influenced by the disconcerting leads from both sides of the Atlantic, where a weak US jobs data along with the success of anti-austerity leaders in European elections multiplied concerns over global economic outlook. Traders were seen piling up position in Capital Goods sector while selling was witnessed in Realty, Bankex and FMCG sector. Banking stocks were under pressure for the third straight day, after the central bank last week issued final guidelines to implement the Basel-III capital rules. However, L&T and BHEL from Capital Goods space was seen trading firm in green providing the much needed support for the markets.

In the scrip specific development, PSU oil marketing companies like BPCL, HPCL and IOC were seen trading firm in green after international crude oil prices corrected over two percent after previous week’s over six percent sell-off. JP Associates was trading weak in red after a hefty penalty for violation of environmental laws been levied on the company by Himachal Pradesh High Court.

On the global front, the Asian markets were trading in red while the European markets were too trading in red on pessimistic note. Concerns also exacerbated over the European debt crisis after French and Greek voters ousted respective incumbent parties in a backlash against austerity measures aimed at battling the euro zone crisis. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,100 and 16,700 levels respectively. The market breadth on BSE was negative in the ratio of 884:1674 while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 16,652.11 down by 178.97 points or 1.06% after trading as high as 16,659.58 and as low as 16,513.77. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 0.95% while Small cap sank 0.97%.

On the BSE sectoral space, Capital Goods up 0.78% was the only gainer while Realty down 2.25%, Bankex down 1.91%, FMCG down 1.35%, Oil & Gas down 1.09% and IT down 1.02% were the major laggards in the space.

BHEL up 3.34%, L&T up 1.22%, Bharti Airtel up 0.72%, Maruti Suzuki up 0.53% and Cipla up 0.49% were the top gainers on the Sensex, while Hero MotoCorp down 3.32%, HDFC Bank down 3.20%, M&M down 2.36%, RIL down 2.19% and SBI down 2.18% were the major losers in the index.

Meanwhile, India needs to increase its investment in infrastructure to 10% of GDP from the current 8% to achieve and sustain an economic growth target of 9% in the coming years. The country's GDP was $1.4 trillion at the end of March 2011. These comments were made by IDFC Projects Managing Director Pradeep Singh while speaking at the annual meeting of Asian Development Bank.

Singh also stated that the country had a long way to go in terms of meeting its infrastructure requirements and efforts were on to achieve the same. The 12th Five Year Plan (2012-17) has set a target of $1 trillion for the infrastructure sector. Of the total targeted investment, private sector is expected to invest $500 billion - with around $350 billion through debt and $150 billion of equity over next five years. However domestic funding shall not be enough to meet the needs of the sector.

India invested $425 billion in infrastructure during the past five years which fell short of the targeted $500 billion. Despite the aggressive growth in last five years, India’s basic infrastructure ranked 86th in Global Competitive Report - 2010 by World Economic Forum.

Projecting India as investment destination, State Bank of India Chairaman Pratip Chaudhuri said, in a separate presentation, that Qualified Foreign Investors were allowed to directly invest in Indian equity market in January. Also the overall FII investment limit in government securities and corporate bonds has been enhanced to $60 billion. By adding further he said, India has a well regulated banking system, with 98% of the banks fully computerized.

The S&P CNX Nifty is currently trading at 5,028.25, lower by 58.60 points or 1.15% after trading as high as 5,033.25 and as low as 4,988.00. There were 9 stocks advancing against 41 declines on the index.

The top gainers on the Nifty were BPCL up 6.51%, BHEL up 3.13%, L&T up 1.31%, Ambuja Cement up 1.30% and Bharti Airtel up 1.14%.

JP Associates down 4.92%, Cairn India down 4.42%, Bank of Baroda down 3.85%, PNB down 3.69% and Hero MotoCorp down 3.49% were the major losers on the index.

In the Asian space, Shanghai Composite fell 0.01%, Hang Seng plummeted 2.61%, Jakarta Composite plunged 1.82%, KLSE Composite dropped 0.51%, Nikkei 225 got pounded by 2.78%, Straits Times Index got thrashed by 2.00%, KOSPI Composite slumped 1.64% and Taiwan Weighted dived 2.11%.

The European markets were trading in red with France’s CAC 40 sank 1.41% and Germany’s DAX shed 1.46%.

Stock markets in United Kingdom remained shut on Monday owing to Early May Bank Holiday.