Benchmarks extend losses; CG, Metal and Power drags

Indian equities continued to trade weak in the late morning session. On the global front, all the Asian counters were trading in the red and some of them even lower by over a percent on getting report of manufacturing contraction from US and slower growth in Australian economy. Back home the traders were seen piling up position in FMCG, CD and Teck sector, while selling was witnessed in CG, Metal and Power sector. On the other hand, ITC, Hindustan Unilever, Colgate Palmolive, and Godrej Consumer Products from FMCG pack were seen trading in green edging the markets higher. Titan Industries, Gitanjali Gems, and TTK Prestige from CD pack were seen trading firm in green, holding the markets from dipping further. L&T, BHEL, Siemens, Crompton Greaves and ABB from CG sector were trading in red exerting pressure on the market, while Metal majors Tata Steel, Coal India, Jindal Steel, Sterlite Industries too were pressurizing the markets. Meanwhile, the PSU oil marketing companies like BPCL, HPCL and IOC edged higher on report that the prices of petrol, diesel and LPG may be increased next week after Finance Ministry told the Petroleum Ministry that it has no funds left to subsidize fuels. The increase could result in petrol turning costlier by Rs 4 a litre, diesel by Rs 5 and LPG by Rs 50 a cylinder.

In the scrip specific development, Atul Auto jumped on reporting sales increased by 13.21% and stood at 2,322 vehicles in August 2012 as compared to 2,051 vehicles in August 2011. Bharti Airtel gained on unveiling ‘my airtel’ app and inking pact with South African financial services group. Tata Chemicals gained on introducing iodine plus iron fortified salt. Ajmera Realty edged higher on unveiling new project - Villows in Bangalore. The NSE Nifty and BSE Sensex were managing to hold their psychological 5250 and 17300 levels respectively.

The market breadth on BSE was positive, in the ratio of 1284: 794.

The BSE Sensex is currently trading at 17388.84 down by 52.03 points or 0.30% after touching a high of 17411.67 and low of 17356.03. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19% and Small cap index was up by 0.44%.

On the BSE sectoral space, FMCG up by 0.37%, CD up by 0.08%, and Teck up by 0.05% were the gainers. While CG down by 1.12%, Metal down by 1.08% Power down by 0.83%, HC down by 0.60% and Bankex down by 0.56% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 2.38%, Hindustan Unilever up by 1.90%, HDFC Bank up by 0.71%, HDFC up by 0.51% and ITC up by 0.30%. On the flip side, BHEL was down by 2.47%, Tata Steel  was down by 1.80%, Sterlite Industries  was down by 1.61%, Jindal Steel  was down by 1.60% and Sun Pharma  was down by 1.33%, were the top losers on the Sensex. 

Meanwhile, in an effort to shore up sagging growth of India economy, Finance Minister P. Chidambaram, on Tuesday, conducted a meeting with public sector insurance companies to formulate a strategy for attracting a larger flow of long-term funds into the infrastructure sector. With the chief’s of the public sector insurance entities pushing hard for easing of investment norms to enable higher earnings on premium collection, the changes in investment guidelines that would be required to attract large fund flows into the productive infrastructure sector, now seems to be imminent.

Financial Services Secretary D K Mittal, giving more insights to the issues deliberated in the meeting, underscored that meeting was not for decision- taking but basically for understanding measures that can be taken to prop up the economy, which includes channelizing insurance funds into productive sectors, particularly infrastructure. He also added that, issue’s such as changes to be made in the regulations by the Government of India or by Income Tax Department were also taken on board for discussion.

Furthermore IRDA Chairman, J Harinarayan, after the meeting, too averred the need to revisit investment norms for insurance companies, so that much of funds could be invested in non-AAA rated securities, including ‘A+’ and ‘A’ papers of corporate’s. As per estimates, the investment corpus with the life insurance companies is around Rs 13 lakh crore of which only 20 per cent currently goes towards the infrastructure sector. Moreover, as per the current Insurance Regulatory Development Authority (IRDA) norms, these insurance companies can put their money only in highest rated 'AAA' or 'AA' credit-rated debt paper.   

The S&P CNX Nifty is currently trading at 5,251.60, down by 22.40 points or 0.42% after trading in a range of 5,259.50 and 5,243.85. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.50%, BPCL up by 1.20%, HUL up by 0.89%, HDFC Bank up by 0.79% and HDFC up by 0.44%. On the flip side, AXIS Bank down by 2.67%, BHEL down by 2.54%, Tata Steel down by 2.08%, Jindal Steel down by 1.81% and Sterlite Industries down by 1.61%, were the major losers on the index.

All the Asian indices were trading in red; Nikkei 225 down by 0.92%, Hang Seng index down by 1.33%, Shanghai Composite down by 0.12%, Kospi Composite Index down by 1.62%, Taiwan Weighted down by 1.03%, Jakarta Composite down by 0.33%, Straits Times down by 0.66% and KLSE Composite down by 0.61% were the losers.