Sensex, Nifty remains under pressure

Indian equities added losses to continue its weak trade in the late afternoon session on account of selling in front line counters taking clues from European counterparts. The sentiments at Dalal Street was spooked since early deals, after Reserve Bank of India (RBI), pouring cold water on the hopes of rate cuts in upcoming mid-quarterly monetary policy review, in its Annual Report 2011-12, stated that lower interest rates alone are unlikely to jump-start the investment cycle. Traders were seen piling up position in FMCG and Health Care sector while selling was witnessed in Realty, Capital Goods and Bankex sector. In the scrip specific development, IFCI shares tumbled after Cabinet gave nod for conversion of the company’s debentures held by the government into equity. The government will convert optionally convertible debentures (OCDs) worth of Rs 923 crore in IFCI to equity. Coal India was trading firm in green on reports that the company has decided to buy back its equity shares.

On the global front, the Asian markets were trading in red while the European markets were trading on pessimistic note. Greek Prime Minister Antonis Samaras is set to meet German Chancellor Angela Merkel in Berlin today i.e. August 24, 2012, and will visit French President François Hollande on Saturday i.e. August 25, 2012. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,400 and 17,800 levels respectively. The market breadth on BSE was negative in the ratio of 1037:1639 while 140 scrips remained unchanged.

The BSE Sensex is currently trading at 17,792.12, down by 58.10 points or 0.33% after touching a high of 17822.50 and low of 17,725.42. There were 13 stocks advancing against 17 declines on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.53%, while Small cap index was down by 0.65%.

The gainers on the BSE sectoral space were, FMCG up by 0.54% and Health Care up by 0.21% while Realty down by 1.91%, Capital Goods down by 1.02%, Bankex down by 0.89%, Power down by 0.81% and Metal down by 0.51% were top losers on the index.

Coal India up by 1.41%, ONGC up by 1.21%, Sterlite Industries up by 0.85%, HUL up by 0.83% and ITC up by 0.74% were major gainers on the Sensex, while Tata Steel down by 2.61%, ICICI Bank down by 1.65%, Hindalco Industries down by 1.46%, Jindal Steel down by 1.42% and NTPC down by 1.41% were major losers on the index.

Meanwhile, amid strong opposition from key ruling front ally Mamata Banerjee, Commerce and Industry Minister Anand Sharma affirmed that no state will be forced to implement Foreign Direct Investment (FDI) in multi-brand retail. He expressed confidence that the sates which are currently opposing FDI will also come forward realizing the wide benefits. About 10 states have already endorsed Centre's decision to open up the sector to foreign investments.

He pointed out that the venture will benefit farmers, consumers as well as entrepreneurs as integrated modern infrastructure will benefit the rural economy. Even after securing the Cabinet approval, the government was stuck up with the implementation of FDI in multi-brand retail.

Sharma also confirmed that the government would come up with the fresh special economic zones guidelines soon, also added that the withdrawal of Minimum Alternate Tax (MAT) and the Dividend Distribution Tax (DDT) is under consideration of Finance Minister.

The S&P CNX Nifty is currently trading at 5,391.05, down by 24.30 points or 0.45% after trading in a range of 5,399.65 and 5,371.00. There were 18 stocks advancing against 32 declines on the index.

The top gainers on the Nifty were BPCL up by 1.59%, Coal India up by 1.32%, ONGC up by 1.19%, Sterlite Industries up by 0.76% and Sesa Goa up by 0.71%. While, Reliance Infrastructure down by 2.85%, Tata Steel down by 2.53%, JP Associaties down by 2.39%, DLF down by 2.38% and Axis Bank down by 1.84% were the top losers on the index.

All the Asian indices were reeling under pressure; Straits Times declined 0.30%, Kospi Composite Index lost 1.17%, Nikkei 225 plunged 1.17%, Hang Seng index plummeted 1.25%, Jakarta Composite edged lower by 0.51%, KLSE Composite descended by 0.21%, Shanghai Composite surrendered 0.99% and Taiwan Weighted shed 0.37%.

The European markets were trading in red with, France’s CAC 40 descending 0.49%, Germany’s DAX dropped 0.24% and the United Kingdom’s FTSE 100 lost 0.20%.