Markets slip to intra-day low; ITC’s Q1 earning disappoints

Indian equity markets, steadily losing ground have currently slipped near its intra-day’s low level, as India's largest cigarette maker, ITC, lagging market forecasts, reported 20% jump in net profit at Rs 602.14 crore for the fiscal first quarter ended June 30 as compared to Rs 1,332.72 crore for the quarter ended June 30, 2011, which pushed the stocks lower over quarter of percentage. However, the downside of the markets remained limited, after State-owned power equipment manufacturer BHEL, surprising the markets, reported a 13% jump in its Q1FY13 net profit at Rs 921 crore on Y-o-Y basis, which took the stock soaring higher over a percentage. Sector wise, HealthCare and Auto showcased resilience, while Realty, Capital Goods and PSU counters remained the bout of weakness. On the final expiry day of July month’s F&O series, trade of over 1.50 lac crore was done in terms of volume turnover. Meanwhile, Aviation stocks were trading on mixed note ahead of cabinet meet tentatively on July 27, to take on board, ‘FDI in Aviation’ proposal, on the losing end were Kingfisher Airline and Spicejet, while showcasing strength was Jet Airways (India).

On the global front, European shares have got off to a flattish start as investors mulled the possibility of further policy action from central banks to boost economies. Downbeat U.S. new homes sales data on Wednesday renewed the debate over whether the Federal Reserve will embark on another round of quantitative easing. Asian pacific shares too after holding in green for most part of the day slipped in negative terrain.

Closer home, the 30 share benchmark index of Bombay Stock Exchange (BSE), Sensex, losing over quarter of percentage, was hovering above the 16800 level, while 50 share index of National Stock Exchange (NSE), Nifty, trading in proximity to its previous close, is holding the 5100 level. The broader indices, too have slipped fast and deep in red, to outperform the losses of benchmark indices. Both Midcap and Smallcap index, are trading down with cut of over a percentage. In stock specific action, Monnet Ispat Energy, plummeted over 14% after the Supreme Court upheld the Jharkhand high court’s order regarding the cancellation of mining leases of six private mining companies, including that of Monnet Ispat Energy. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1563:861, while 112 shares remained unchanged.

The BSE Sensex, losing 26.98 points or 0.16%, is currently trading at 16,819.07 after trading as high as 16899.77 and as low as 16794.25. There were 13 stocks advancing against 17 declines on the index.

The broader indices continued to stagger; the BSE Mid cap and Small cap indices were trading lower by 1.10% and 1.06% respectively.

HC up by 0.52%, Auto up 0.20%, were the only gainers on the BSE sectoral space, while Realty down by 1.11%, CG down by 1.08%, PSU down by 0.54%, IT down by 0.51% and FMCG down by 0.45% were the losers on the index.

Sun Pharma up by 2.64%, Maruti Suzuki up by 1.89%, Bajaj Auto up by 1.71%, Dr Reddys Lab up by 1.40% and BHEL up by 1.32% were major gainers on the Sensex, while Infosys down by 0.97%, L&T and Wipro were down by 0.88%, Tata Power down by 0.83% and Tata Motors down by 0.68% were the major losers in the index.

Meanwhile, International Air Transportation Association’s (IATA) Director General and CEO, Tony Tyler has suggested a ‘India Inc.’ approach to address multi-faceted crisis in Indian aviation. The crippling issues of the sector are high operating costs, exorbitant taxes and insufficient infrastructure. He opined that the crisis can be resolved with coordinated public policies and aggregate plans by the government by keeping in view that Indian economy can be greatly complimented through a revenue generating sector like aviation.

While criticizing Airports Economic Regulatory Authority’s (AERA) move, which has increased airport charges by 346% at Delhi International Airport since May 2012, he pointed out that it will add over $400 million in operating costs for airlines providing connectivity to India through Delhi and will impact travel demand by 5-7%. He urged to expedite action in infrastructure upgrade by enhancing airline capacity in Mumbai, by building new airport.

He also pointed that the component of fuel cost in the total operational cost of Indian carriers is approximately 50 per cent, while the same is around 33 per cent in other markets. Though, the airlines cannot shift the entire escalating operational cost to the consumer in India, as these conditions will stifle demand. Hence he had asked the government to help the airlines to reduce the gap in the operational cost and operation revenue by reducing taxes and infrastructure costs.

Indian Aviation sector is supporting about 1.7 million jobs, 0.5% of GDP and 90% of international tourist arrivals.  India is a market of about 100 million passengers annually and has a projected potential of over 2 billion travelers. Albeit, Indian airline’s losses approached $2 billion for the year ended March 2012, after losing an estimated $3.5 billion over the three previous years. 

The S&P CNX Nifty is currently trading at 5100.00, down by 9.60 points or 0.19% after trading as high as 5,126.30 and as low as 5,093.75. There were 17 stocks advancing against 33 declines on the index.

The major gainers on the Nifty were Sun Pharma up by 2.40%, Ambuja Cement up by 2.04%, Maruti Suzuki up by 1.83%, Bajaj-Auto up by 1.73% and Jindal Steel up by 1.26%. While, PNB down by 2.12%, SAIL down by 1.64%, Bank of Baroda down by 1.38%, BPCL down by 1.22% and L&T down by 1.17% were the major losers on the index.

Most of Asian equity indices mostly slipped in negative terrain; Hang Seng index gained 0.05%, Nikkei 225 added 0.92%, Kospi Composite Index rose 0.74% and Straits Times expanded 0.86%, while Taiwan Weighted slid 0.12%, KLSE Composite descended 0.55% and Jakarta Composite lost 0.15% and    Shanghai Composite down by 0.48%, were the major losers.

European markets were trading in red after flattish start; CAC 40 declined by 0.10%, DAX slid 0.21% and FTSE 100 shed 0.10%.