Benchmarks extend losses; IT, TECk, and Auto drags

Indian equities continued to trade weak in the late morning session. While, on the global front, the majority of Asian markets were trading in green barring Chinese market which was trading lower on news that retailers in the country are reporting weaker sales growth. Retail sales have missed economists’ forecasts in three of the last four months. Back home, traders were seen piling up position in HC, Bankex and FMCG sector, while selling was witnessed in IT, TECk and Auto sector. Infosys, TCS and HCL Tech from IT sector were trading in red exerting pressure on the market, while Auto majors Tata Motors, Mahindra & Mahindra, and Bajaj Auto too were pressurizing the markets. On the other hand, Cipla, Lupin, Ranbaxy Lab, Divi's Laboratories and Glaxosmithkline Pharmaceuticals from HC pack were seen trading firm in green, holding up the markets from dipping further. HDFC Bank, ICICI Bank, Mahindra Bank and Axis Bank were trading in green edging the markets higher.

In the scrip specific development, Sundaram Clayton jumped on reporting a rise of 94.04% in its net profit at Rs 72.30 crore for the year under review as compared to Rs 37.26 crore in the previous year. HPCL gained on hiking CNG price by Rs 3.80/ kg in Ahmedabad. Fedders Lloyd soared on bagging order worth $18.58 million. The NSE Nifty and BSE Sensex were managing to hold their psychological 5300 and 17500 levels respectively.

The market breadth on BSE was positive, in the ratio of 1043:1027.

The BSE Sensex is currently trading at 17589.18 down by 42.53 points or 0.24% after touching a high of 17653.90 and low of 17573.52. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09% and Small cap index was up by 0.01%.

On the BSE sectoral space, HC up by 0.57%, Bankex up by 0.30% and FMCG up by 0.26% were the gainers while IT down by 0.87%, TECk down by 0.74%, Auto down by 0.71%, Metal down by 0.65% and PSU down by 0.63% were the losers on the index.

Tata Power up by 2.34%, Cipla up by 1.55%, HDFC Bank up by 0.82%, Jindal Steel up by 0.72%, Maruti Suzuki up by 0.55% were the major gainers on the Sensex, while BHEL down by 1.71%, ONGC down by 1.68%, Sterlite Industries down by 1.67%, Bajaj Auto down by 1.61% and Tata Motors down by 1.51% were the major losers on the index. 

Mean while, in an effort to entice foreign entities to list their IDRs on domestic bourses, capital market regulator Securities & Exchange Board of India (SEBI), has permitted conversion of 25% Indian Depository Receipts (IDRs) of company into underlying overseas listed equity shares in a financial year. This development is confirmation to the government proposal of allowing two-way fungibility of IDR’s to encourage greater foreign participation in the Indian capital market, in 2012-13 Union Budget. The two-way fungibility allows Indian shareholders to convert their depository receipts into equity shares of the issuer company and vice versa. Further, the fungibility of these IDR’s may help investors take advantage of higher liquidity in the home market such as London for Standard Chartered Bank, the only listed IDR in India.

However, capital market regulator would separately issue instructions for modifying the existing legal framework governing IDRs, in order to implement the decision to allow redemption of IDRs into underlying equity shares and re-conversion of equity shares of a foreign issuer into IDRs.

The S&P CNX Nifty is currently trading at 5,321.00, down by 13.60 points or 0.25% after trading in a range of 5,345.50 and 5,315.80. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were Tata Power up by 2.55%, Cipla up by 1.29%, HDFC Bank up by 0.98%, Hindalco by 0.80% and Kotak Bank up by 0.79%. While, JP Associates  down by 8.23%, Sesa Goa by 2.58%, SAIL down by 2.47%, BHEL down by 1.75% and ONGC down by 1.64% were the top losers on the index.

Most of the Asian indices were trading  in green; Kospi Composite Index up by 0.39%, Nikkei 225 up by 0.45%, KLSE Composite up by 0.07%, Taiwan Weighted up by 0.41%, Straits Times up by 0.34%, and Hang Seng index up by 0.14% while Shanghai Composite down by 0.46% and Jakarta Composite  down by 0.37% were only the losers.