Indian equities drift lower; hovers near the lowest point of day

Indian equities drift further to continue weak trade hovering near the lowest point of the day in the late afternoon session in absence of buying due to lack of any significant upside triggers. Besides investors preferred staying away from the market and adopted wait and watch policy ahead of Q1 earnings of Information Technology major, Infosys and Tata Consultancy Service (TCS), scheduled on July 12, is also keeping the market jittery. Traders were seen piling up position in Consumer Durables sector while selling was witnessed in Auto, Realty and Oil & Gas sector. Tata Motors, Hero MotoCorp, Maruti Suzuki, Bajaj Auto and M&M from Auto pack was seen trading weak in red driving the markets lower. DLF from Realty pack was down with cut of around more than one and half a percent pulling the markets down. Industry heavyweight RIL was trading with cut of around two percent exerting pressure on the market. Also ONGC from Oil & Gas sector was trading in red putting pressure on the market.

On the global front, the Asian markets were trading mostly in green while the European markets were trading in red on pessimistic note. The markets are under pressure as investors were concerned over the euro zone's ability to tackle its debt crisis, which pressured other risk assets. Italian Prime Minister Mario Monti stated that Italy won't need a Greek-style bailout but suggested that the country might at some point need the European Stability Mechanism, or ESM, to buy Italian bonds and keep soaring yield spreads under control. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,350 and 17,500 levels respectively. The market breadth on BSE was negative in the ratio of 1123:1511 while 152 scrips remained unchanged.

The BSE Sensex is currently trading at 17,486.70, down by 131.65 points or 0.75% after trading as high as 17,582.99 and as low as 17,473.55. There were 3 stocks advancing against 27 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap was up by 0.01% while Small cap indices declined by 0.13%.

On the BSE sectoral space, Consumer Durables up 0.23% was the sole gainer, while Auto down 1.22%, Realty down 1.07%, Oil & Gas down 1.05%, FMCG down 1.01% and Metal down 0.88% were the top losers.

GAIL India up by 0.70%, Infosys up 0.61% and L&T up 0.44% were the only gainers on the Sensex, while Hindalco Industries down by 2.78%, Wipro down by 2.72%, Tata Motors down by 2.21%, RIL down by 2.00% and BHEL down by 1.53% were the prominent losers on the index.

Meanwhile, in an attempt to help ailing five PSU’s, a total investment of Rs 4,575 crore is being considered by the Ministry of Heavy Industries and Public Enterprises, which also includes revival  of Lucknow-based Scooters India without inducting any strategic partner. The proposals to revive the PSUs are under different stages of approval.

The ministry has also appointed renowned consultants for formulation of appropriate revival plans and strategy to restructure these PSUs. The PSU’s, which will be revived through induction of funds by the government, include HMT, HMT Bearings, HMT Watches, newsprint-maker NEPA, Nagaland Pulp and Paper.

The maximum investment of Rs 1,292 crore has been set aside for the NEPA, followed by HMT Watches Rs 1,500 crore, HMT Rs 992 crore and Nagaland Pulp and Paper Company Rs 679 crore and HMT Bearings Rs 112 crore. Further, Cement Corporation of India and Ranchi-based Heavy Engineering Corporation have already been revived with government’s aid of Rs 1,716 crore and about Rs 1,400 crore respectively.

The S&P CNX Nifty, after trading as high as 5,336.45 and as low as 5,302.50, is currently trading at 5306.50, down by 38.85 points or 0.73%. There were 9 stocks advancing against 41 declines on the index.

The top gainers on the Nifty were Kotak Bank up by 1.61%, BPCL up by 1.42%, GAIL India up by 2.65%, L&T up by 0.74%, and Power Grid up by 0.71%. On the flip side, Hindalco Industries down by 2.98%, Wipro down by 2.74%, Reliance Infrastructures down by 2.31%, Tata Motors down by 2.21% and Reliance Industries down by 2.05% were the major losers on the index.

Asian equity indices were mostly trading in green; Shanghai Composite added 0.51%, Hang Seng ascended 0.12%, Strait Times added 0.77%, Jakarta Composite rose 0.16%, KLSE Composite gained 0.25% and Taiwan Weighted was up 0.09%. On the flip side, Nikkei 225 index declined by 0.08% and Kospi Composite Index lost 0.17%.

The European markets were trading in red with, France’s CAC 40 dropped 0.81%, Germany’s DAX descended 0.41% and the United Kingdom’s FTSE 100 declined 0.35%.