Weak trade persist; Nifty holds above 5,200 mark

Indian equities added losses to continue weak trade below neutral line in the late afternoon session led by selling pressure and taking clues from European counterparts. The subdued trading in the European markets and mixed trend in Asian region influenced the sentiment snapping a three-day gaining streak.  Besides, investors will closely watch the data to be announced today i.e. July 20, 2012 by CSO on consumer price index (agricultural labourers/rural labourers) for June 2012. Traders were seen piling up position in Metal, Consumer Durable and Auto sector while selling was witnessed in Bankex, Capital Goods and Power sector. In the scrip specific development, Steel Authority of India (SAIL) was seen trading firm after the cabinet committee on economic affairs yesterday i.e. July 19, 2012, approved disinvestment of government’s 10.82% stake in the state-run steel firm. Aurobindo Pharma was trading in green on reports that it has received shareholders’ nod for sale of Tamil Nadu unit. Tata Communications was seen trading firm with gain of around more than six percent after the government approved demerger of surplus VSNL land into a separate company. Timken India dropped by more than 6% on reporting 63% year-on-year (y-o-y) fall in net profit at Rs 6.91 crore for the quarter ended June 2012, due to higher expenditure.

On the global front, the Asian markets were trading in red barring Hang Seng and Taiwan Weighted while the European markets were trading on a mixed note. Germany’s lower house of parliament approved the country’s participation in a $122.9 billion aid package for Spain’s ailing bank sector. The measure was passed with 473 in favor, 97 against and 13 abstentions.  Worries about a banking and fiscal crisis in Spain have dogged global equities markets for much of the second quarter. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,250 and 17,200 levels respectively. The market breadth on BSE was negative in the ratio of 1103:1528 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 17179.83 down by 99.02 points or 0.57% after trading in a range of 17275.20 and 17142.13. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading with marginal losses; the BSE Mid cap index was down by 0.16%, while Small cap index was lower by 0.07%.

The top gaining sectoral indices on the BSE were, Metal up by 0.36%, Consumer Durable up by 0.33%, Auto up by 0.19%, TECk up by 0.19% and IT up by 0.07%.

On the other hand, Bankex down by 1.20%, Capital Goods down by 0.91%, Power down by 0.65%, Health Care down by 0.60% and Realty down by 0.54% were major loser on the BSE.

Bajaj Auto up by 2.23%, Maruti Suzuki up by 2.22%, TCS up by 2.19%, Jindal Steel up by 1.07% and Tata Steel up by 0.60% were the top gainers on Sensex , while Dr. Reddy’s Lab down by 2.88%, BHEL down by 2.07%, Cipla down by 1.67%, ICICI Bank down by 1.50% and HDFC down by 1.38% were major losers on the index.

Meanwhile, Cabinet Committee on Economic Affairs (CCEA) has approved the sale of 10.82% of its stake in Steel Authority of India (SAIL), which is estimated to fetch about Rs 4,000 crore at current market price. The total government share holding in the company is about 85.82%.

The proposal was raised by the Department of Disinvestment and it was postponed in last week’s meeting as Steel Minister Beni Prasad Verma and Steel Secretary D R S Chaudhary were on an official tour. The share sale process will be conducted through auction route or by offer for sale. The government has not launched the disinvestment program for the current fiscal so far due to poor market conditions, albeit it aims to raise Rs 30,000 crore by selling stakes in the public sector firms. The Disinvestment Department is responsible to decide on the timing of the issue depending upon market conditions.

Recently, the CCEA had put on hold in the initial public offer (IPO) of Rashtriya Ispat Nigam (RINL) due to volatility in the markets and lukewarm response of prospective investors in the roadshows held last week. Besides SAIL and RINL, Hindustan Aeronautics, BHEL, National Aluminium Company (Nalco), Hindustan Copper and Oil India are some of the other PSUs which are on government's disinvestment radar this year.

The S&P CNX Nifty is currently trading at 5,210.35, down by 32.35 points or 0.62% after trading in a range of 5,238.70 and 5,197.50. There were 14 stocks advancing against 36 declines on the index.

The top gainers on the Nifty were Bajaj Auto up by 2.54%, Maruti Suzuki up by 2.38%, TCS up by 2.12%, Asian Paints up by 1.13% and Cairn India up by 1.10%, while Kotak Bank down by 3.23%, Dr. Reddy’s Lab down by 2.87%, BHEL down by 2.47%, IDFC down by 1.96% and Cipla down by 1.71% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 0.74%, Jakarta Composite declined by 0.50%, KLSE Composite lost 0.14%, Nikkei 225 plunged by 1.43%, Straits Times was down by 0.53% and Kospi Composite Index was marginally down by 0.01%. While, Hang Seng was up by 0.42%, and Taiwan Weighted was up by 0.23%.

The European markets were trading on a mixed note with, France’s CAC 40 descended 0.34%, Germany’s DAX added 0.01% and the United Kingdom’s FTSE 100 declined 0.34%.