Indian equities continue weak trade; Nifty below 5,300 mark

Indian equities continued its weak trade in the late afternoon session on account of selling in front line counters and taking clues from European counterparts. The market started off the trade with negative bias with the key benchmarks NSE - Nifty hitting its lowest level in almost four weeks while the BSE Sensex hitting lowest level in nearly three and half weeks. Traders were seen piling up position in Realty, Health Care and FMCG sector while selling was witnessed in Capital Goods, Metal and Oil & Gas sector. The market may remain volatile today 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 expires today i.e.  August 30, 2012. In the scrip specific development, Lanco Infratech was trading firm in green on reports that the company is engaged in talks with private equity firms Bain Capital and Kohlberg Kravis Roberts to sell stake in its power business. Jaypee Infratech was trading in red on reports that the company has lost Rs 1,100 crore road infra project in UP as new government has shelved land for development model.

On the global front, the Asian markets were trading in red barring KLSE Composite while the European markets were trading on pessimistic note. Along with Greece, Spain has become a thorn given its sluggish economy, high unemployment and troubled banking sector; investors are anticipating that the nation will be forced to seek a bailout soon. Germany’s inflation rose more than expected in August and French business confidence in manufacturing industry improved. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,300 and 17,500 levels respectively. The market breadth on BSE was negative in the ratio of 1174:1376 while 157 scrips remained unchanged.

The BSE Sensex is currently trading at 17,418.47, down by 72.34 points or 0.41% and has touched a high and low of 17,475.31 and 17,367.55 respectively. There were 11 stocks advancing against 19 declines on the index.

The broader indices held their neck up in green; the BSE Mid cap and Small cap indices were trading higher by 0.23% and 0.04% respectively.

On the BSE sectoral front, Realty up by 1.35% Health Care (HC) up by 0.51% and FMCG up by 0.12% were the only sectors that showcased resilience. On the flip side, Capital Goods (CG) down by 0.94%, Metal down by 0.57%, Oil & Gas down by 0.45%, Auto down by 0.42% and Power down by 0.42% were the major losers.

The top gainers on the Sensex were Hindalco Industries up by 2.17%, Wipro up by 1.39%, Cipla up by 1.15%, Tata Motors up by 1.07% and Tata Power up by 0.81%. On the other hand, Jindal Steel down by 2.11%, Gail India down by 2.10%, Maruti Suzuki down by 1.99%, Tata Steel down by 1.75% and Hero MotoCorp down by 1.60% were the top losers on the Sensex.

Meanwhile, with GDP growth data for April-June quarter due for release on Aug 31, Research firm Moody’s, is expecting Asia’s third largest economy to grow at 5.2 percent on year on year (y-o-y) basis, its lowest pace of growth since early 2009. Further, supporting this view, the research firm added that, ‘the difference this time around behind the sluggish growth would be largely domestic factors and not developments abroad, which emerged as the primary reason behind the 2009 slowdown.

Moody’s Analytics underscored weak business confidence, which was weighed down by stubborn inflation, elevated interest rates, a weak global economy, political gridlock and policy stagnation at the national level, as the primary reason for this forecast. Highlighting that the slowdown was well entrenched in all the sector and broader economy clearly growing below potential, the research firm forecasted India’s economy to grow at 5.5 percent for current fiscal, thoroughly rejecting the government’s overly positive outlook for 7.6 per cent growth across the 2012-2013 fiscal year.

Meanwhile, hit by high interest rates and the global downturn, India’s GDP growth slumped to a nine-year low of 5.3% in the January-March quarter, while that for the entire fiscal, dropped to 6.5 percent, lower than the government's initial estimate of 6.9 per cent and far below the 8.4 per cent logged the previous year.

The S&P CNX Nifty is currently trading at 5272.45, down by 15.35 points or 0.29% after trading in a range of 5,286.90 and 5,255.05. There were 17 stocks advancing against 33 declines on the index.

The top gainers of the Nifty were DLF up by 2.96%, Hindalco Industries up by 1.88%, Wipro up by 1.39%, Cairn India up by 1.08% and Tata Motors up by 1.03%. On the flip side, Gail India down by 2.60%, Tata Steel down by 2.31%, Jindal Steel down by 2.11%, Maruti down by 1.93% and Hero Moto Corp down by 1.57% were the major losers on the index.

Most of the Asian indices were trading in red; Shanghai Composite declined 0.03%, Hang Seng index plunged by 1.19%, Jakarta Composite plummeted 2.02%, Nikkei 225 lost 0.95%, Straits Times descended 1.04%, Kospi Composite Index offloaded 1.15% and Taiwan Weighted lost 0.27%. On the other hand, KLSE Composite up by 0.23% was the lone gainer amongst Asian pack.

The European markets were trading in red with, France’s CAC 40 descending 0.25%, Germany’s DAX dropped 0.55% and the United Kingdom’s FTSE 100 lost 0.19%.