Weak trade persists as worries over euro-zone debt crisis escalate

Indian equities added losses to continue weak trade below neutral line in the late afternoon session due to lack of upside triggers in domestic markets combined with pessimistic global leads. The barometer indices hit their lowest level in three and half weeks due to lack of buying with all 13 sectoral indices in BSE trading in red as worries over the euro-zone debt crisis escalated. Traders were seen selling in Metal, Capital Goods and Realty sector. In the scrip specific development, retail shares were seen trading under pressure on reports that the Samajwadi Party, Left parties and JD(S) have been urging Prime Minister Manmohan Singh for not allowing foreign direct investment (FDI) in multi-brand retail. Telecom stocks edged lower after global telecom body GSM Association reportedly stated that the new reserve price for airwaves recommended by the Empowered Group of Ministers is still prohibitively high.

On the global front, the Asian markets were trading in red while the European markets were too trading on a pessimistic note. Spanish prime minister forecasted recession for the second year in a row and Valencia became the first region to seek financial bailout from Madrid. Spain revised down its gross domestic product estimates from this year through 2014. Besides, Greece is in a Great Depression similar to the American one in the 1930s, the country’s Prime Minister Antonis Samaras told former US President Bill Clinton. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,150 and 17,000 levels respectively. The market breadth on BSE was negative in the ratio of 887:1712 while 111 scrips remained unchanged.

The BSE Sensex  plunged 234.20 points or 1.36% to trade at 16,924.24, after trading as high as 17047.73 and as low as 16,902.95. There were 2 stocks advancing against 28 declines on the index.

The broader indices too slipped further in the red terrain; the BSE Mid cap and Small cap indices were down by 1.23% and 0.96% respectively.

On the BSE sectoral space, there was no gainer on the index , while Metal down by 2.73%, Capital Goods down by 2.68%, Realty down by 2.18%, Power down by 2.16% and Auto down by 1.96% were top losers on the index.

Dr Reddy’s Lab was up by 0.91% and TCS up by 0.16% were the only gainers on the Sensex, while Maruti Suzuki down by 5.64%, Sterlite Industries down by 4.33%, BHEL down by 3.93%, Hindalco Industries down by 3.69% and GAIL India down by 3.03% were the major losers on the index.

Meanwhile, power minister Sushilkumar Shinde has expressed his confidence that India could raise 88,000 MW more power capacity in next five years provided the fuel issue is solved. The present power generation capacity of India is 200,000 MW, with a peak shortfall of 10%. The 88,000 MW capacity addition target includes about 8,000 MW nuclear capacity and some of the projects, which were earlier scheduled in the 11th plan will be carried forward to the 12th plan.

The 11th plan period (2007-12) had aimed about 78,000 MW, which was later brought down to 62,000 MW in the mid-term appraisal, but attained 55,000 MW. While, target in the 10th plan period (2002-07) was 42,000 MW but only 50 percent of the capacity was achieved.

Shinde confirmed that the government is setting plans for faster land procurements and increase in coal production for attaining the capacity addition of 88,000 MW by 2017. The government had urged Coal India (CIL) to raise production to meet the demands of the power sector. The company is planning to produce nearly 470 million tonnes of coal during the current financial year (2012-13).

The S&P CNX Nifty is currently trading at 5,127.80, down by 77.30 points or 1.49% after trading as high as 5,164.20 and as low as 5,124.00. There were 4 stocks advancing against 45 declines, while 1 share remained unchanged on the index.

The top gainers on the Nifty were Dr Reddy’s Lab up by 1.01%, ACC up by 0.45%, Cipla up by 0.11% and TCS up by 0.10%, while, Maruti Suzuki India down by 5.89%, JP Associates down by 5.53%, Sterlite Industries down by 4.61%, Hindalco Industries down by 4.01% and Sesa Goa down by 3.84% were the major losers on the index.

Asian equity indices were trading in red; KLSE Composite declined 0.38%, Hang Seng plummeted 2.99%, Kospi Composite lost 1.84%, Jakarta Composite descended 1.62%, Nikkei 225 down 1.86%, Straits Times down 1.31%, Taiwan Weighted down 1.90% and Shanghai Composite plunged 1.26%.

The European markets were trading in red with, France’s CAC 40 descended 1.70%, Germany’s DAX dropped 1.40% and the United Kingdom’s FTSE 100 declined 1.55%.