Indian equities lost ground to trade in red; Nifty below 5,000 level

Indian equities weaken further to continue its trade in red in the late afternoon session as conservative investors started selling frontline blue chip counters. The nervous market participants turned jittery in trades following the European stock markets which started off with a flat to positive opening on which NSE index - Nifty surrendered under pressure and was unable to sustain above the 5,000 level. Traders were seen piling up position in FMCG, IT and TECk sector while selling was witnessed in Realty, Bankex and Power sector. Industry heavyweight RIL was trading in red on reports that the firm has reduced estimates for proven gas reserves from its Indian blocks by 6.7% to 3.67 trillion cubic feet.

In another scrip specific development, cigarette major ITC was seen trading firm in green on reports that the government has proposed an amendment to the pricing methodology for excise duty on cigarettes announced in Union Budget 2012-13 in March 2012 which will be positive for cigarette manufacturers. Three public sector oil marketing companies HPCL, BPCL and IOC were firm on anticipations of fuel price hike after finance minister Pranab Mukherjee on May 08, 2012 called for a combined effort to bring down fuel subsidies. Lanco Infratech rose after the company received an order from the Supreme Court to resume development on a township project in Hyderabad. Punjab National Bank was seen trading in red after ratio of its net non-performing assets increased to 1.52% as on end of March 31, 2012 compared to 0.85% as on end of March 31, 2011.

On the global front, the Asian markets were trading in red while the European markets were trading on a mix note. Political uncertainty in Greece intensified concerns over Europe's onerous financial trouble and undermined investors’ morale. Deepening the feeling of instability a staunch leftist is likely to stitch together a coalition government with the aim of tearing up Greece's bailout agreements, a move that would spark a dangerous escalation of the Euro-zone debt crisis. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,000 and 16,600 levels respectively. The market breadth on BSE was negative in the ratio of 1001:1570 while 128 scrips remained unchanged.

The BSE Sensex is currently trading at 16,533.54 down by 12.64 points or 0.08% after trading as high as 16,615.74 and as low as 16,436.41. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index shed 0.49% while Small cap fell 0.63%.

On the BSE sectoral space, FMCG up 2.99%, IT up 0.65%, TECk up 0.22%, Healthcare up 0.05% and Capital Goods up 0.04% were the only gainers, while Realty down 2.12%, Bankex down 1.49%, Power down 1.33%, PSU down 1.23% and Metals down 1.22% were the major laggards in the space.

ITC up 5.37%, TCS up 2.47%, Hindalco Industries up 2.04%, L&T up 0.98% and HUL up 0.77% were the major gainers on the Sensex, while DLF down 3.13%, SBI down 2.69%, Coal India down 2.28%, NTPC down 2.21% and Sterlite Industries down 2.07% were the major losers in the index.

Meanwhile, in order to fasten the pending export orders in Cotton and to smooth the process, the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce, has asked the Cotton exporters to send e-mail of documents required at the time of registration. The purpose is to keep queries, if any; ready by the time an exporter sends hard copy of the applications and other relevant papers.

Earlier, exporters were required to be personally present at the time of application for exports. However this process was time consuming as it required presence of exporter with valid documents after examining the same, DGFT permitted the exports.

Recently, the government rolled back the decision to ban new registration of cotton exports. The decision was taken under pressure from allies and industry lobby. This has leased a new ray of hope for the Kapas markets.

Generally, from the date of registration certifications (RCs) an exporter requires at least a month to physically ship the quantity of exports. The 50 percent mandatory shipment clause, therefore, requires executing export orders fast to obtain another RC for the next consignment.

The S&P CNX Nifty is currently trading at 4,990.15, lower by 9.80 points or 0.20% after trading as high as 5,016.25 and as low as 4,959.65. There were 13 stocks advancing against 35 declines while 2 stocks remain unchanged on the index.

The top gainers on the Nifty were ITC up 5.44%, Ranbaxy up 4.55%, TCS up 2.28%, Hindalco Industries up 1.74% and BHEL up 1.32%.

JP Associates down 5.31%, Kotak Bank down 3.46%, Siemens down 3.42%, SAIL down 3.21% and Cairn India down 3.06% were the major losers on the index.

In the Asian space, Shanghai Composite plunged 1.65%, Hang Seng declined 0.75%, Jakarta Composite sank 1.35%, KLSE Composite declined 0.24%, Nikkei 225 got pounded by 1.49%, Straits Times Index dropped by 0.69%, KOSPI Composite slumped 0.85% and Taiwan Weighted dived 0.93%.

The European markets were trading on a mix note with France’s CAC 40 sank 0.19%, Germany’s DAX gain 0.43% and United Kingdom’s FTSE eased 0.22%.