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 and taking clues from subdued European counterparts. Traders were seen piling up position in Oil & Gas, Health Care and FMCG sector while selling was witnessed in Bankex, Realty and Power sector. Hectic activity was seen in Telecom stocks as the Department of Telecommunications (DoT) plans to start a much-awaited auction of telecommunications bandwidth on November 12, 2012. In the scrip specific development, Lanco Infratech and Punj Lloyd were trading under pressure on reports that these companies have been banned by the home ministry from participating in two major port projects on security grounds. Deccan Chronicle Holdings was locked at 5% upper circuit limit as the promoters of the company are learnt to have zeroed in on a strategic investor. Rohit Ferro Tech was trading firm as the board of directors, on Friday, have approved the issue of 3.35 crore equity shares at a price of Rs 60 per share to the entities belonging to the promoter group and strategic investors belonging to non-promoter group on preferential basis. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near-month i.e. August month series to next month i.e. September month series. The August 2012 derivatives contracts will expire on Thursday i.e.  August 30, 2012.

On the global front, the Asian markets were trading in red barring Nikkei 225 and KLSE Composite while the European markets were trading on mixed note. The troika of lenders which consists of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) is set to decide on the disbursement of the next tranche of money from Greece’s 130 billion euro bailout package next month. Besides, European Central Bank president Mario Draghi is scheduled to give a speech on Saturday i.e. September 01, 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 1133:1509 while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 17,722.88, down by 60.33 points or 0.34% after touching a high of 17820.07 and low of 17,701.55. There were 10 stocks advancing against 19 declines while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.38%, while Small cap index was down by 0.32%.

The top gainers on the BSE sectoral space were, Oil & Gas up by 0.48%, Health Care up by 0.23% and Fast Moving Consumer Goods up by 0.09% while Bankex down by 1.23%, Realty down by 1.17%, Power down by 0.98%, Capital Goods down by 0.95% and Metal down by 0.90% were top losers on the index.

Mahindra & Mahindra up by 1.62%, Bharti Airtel up by 1.61%, Cipla up by 0.84%, Hindustan Unilever up by 0.80% and RIL up by 0.75% were major gainers on the Sensex, while Jindal Steel down by 4.82%, Maruti Suzuki down by 1.77%, BHEL down by 1.69%, SBI down by 1.66% and ICICI Bank down by 1.54% were the major losers on the index.

Meanwhile, India has approached the World Trade Organization to set up a panel to adjudicate on its dispute with the United States over the duties imposed by them on some imports of Indian steel products. India had lodged a complaint in April that US had wrongly slapped punitive tariffs, on certain hot rolled carbon steel flat products from India. The country had failed to resolve the issue via consultations with the United States.

In December 2001, US had imposed the countervailing duties and further extended the duty after six years. It had fixed duty nearly 286% on some steel pipes. India claims that it does not comply with WTO rules. Countervailing duties are imposed by countries when they believe that their domestic manufacturers are suffering losses because of competition from unfairly subsidized imports.

However, steel manufacturers in India buy a large amount of their iron ore from the state-owned National Mineral Development Corporation (NMDC), the country's largest iron ore producer. India is arguing against US conclusions that the corporation sells iron ore at prevailing market rates.

The United States is also in dispute with China over the US use of countervailing duties on a range of imports, including several types of steel products. China requested consultations on May 25 but has not yet asked for a panel to be set up.

The S&P CNX Nifty is currently trading at 5,367.85, down by 18.85 points or 0.35% after trading in a range of 5,399.15 and 5,360.15. There were 18 stocks advancing against 32 declines on the index.

The top gainers on the Nifty were Mahindra & Mahindra up by 1.71%, Bharti Airtel up by 1.49%, Cairn India up by 1.28%, HUL up by 0.96% and Cipla up by 0.91%. While, Jindal Steel down by 4.65%, PNB down by 3.21%, Axis Bank down by 2.41%, Bank of Baroda down by 2.07% and DLF down by 1.95% were top losers on the index.

Most Asian indices were trading in red; Kospi Composite Index declined 0.10%, Straits Times descended 0.17%, Hang Seng index lost 0.41%, Shanghai Composite plunged 1.74% and Taiwan Weighted slid 0.12%, while Nikkei 225 edged higher by 0.16%, KLSE Composite was up by 0.05% were the only gainers.

European markets were trading on mixed note; with France’s CAC 40 trading lower by 0.06% and Germany DAX inching up by 0.12%. While, FTSE100 remains shut on account of UK Summer Bank holiday.