Indian equities drift further; Nifty below 5,600 mark

Indian equities added losses to continue its weak trade in red in the late afternoon session on back of selling in frontline counters and taking cues from European counterparts. The market witnessed a bout of volatility as key benchmark indices alternately swung between gains and losses in early trade after Ministry of Statistics and Programme Implementation released CPI inflation that entered double digit at 10.03%. Traders were seen piling up position in PSU, Power and FMCG sector while selling was witnessed in Oil & Gas, Metal and Consumer Durables sector. As per the provisional data from the stock exchanges, foreign institutional investors (FIIs) have made heavy purchases of Indian stocks on September 17, 2012 too didn’t provide any relief to the market. In the scrip specific development, state-run power equipment manufacturer Bharat Heavy Electricals (BHEL) was trading firm on reports that BHEL-Hitachi and BEML were among seven companies, which bid in Delhi Metro tender for supply of 486 coaches. JSW Steel, Hindalco Industries and Tata Power were under pressure following the government’s move to de-allocate one more coal mine, and deduct bank guarantees in case of two companies. Infosys and Tech Mahindra were trading in green after Bank of America-Merrill Lynch upgraded both company to ‘buy’ from ‘neutral’ citing improved revenue confidence and hopes of better earnings. The stock market will remain close tomorrow i.e. September 19, 2012, on account of Ganesh Chaturthi.

On the global front, the Asian markets were trading in red barring Seoul Composite while the European markets were trading on pessimistic note. The euro zone finance ministers meeting in Cyprus ended with no clear conclusion on Spain and Greek situations. The European Commission President Jose Manuel Barroso’s plan to establish a single supervisory mechanism for banks in the euro zone from the beginning of 2013 was vetoed. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,500 levels respectively. The market breadth on BSE was positive in the ratio of 1576:1166 while 127 scrips remain unchanged.

The BSE Sensex is currently trading at 18,490.00, down by 52.31 points or 0.28% after touching a high of 18,580.48 and low of 18,480.96. There were 14 stocks advancing against 16 declines on the index.

The broader indices added traction; the BSE Mid cap index was up by 0.80% and Small cap index was up by 0.68%.

The top gainers on the BSE sectoral space were, PSU up by 1.00%, Power up by 0.68%, FMCG up by 0.56%, Bankex up by 0.51% and Capital Goods up by 0.51%. While Oil & Gas down by 1.39%, Metal down by 0.44%, Consumer Durables down by 0.40%, IT down by 0.27% and Health Care down by 0.03% were the only losers on the sectoral space.

The top gainers on the Sensex were BHEL up by 3.84%, GAIL India up by 2.63%, SBI up by 2.55%, Jindal Steel up by 2.28% and Infosys up by 1.63%. On the flip side, Wipro down by 3.67%, Hindalco Industries down by 2.64%, TCS down by 2.57%, Reliance Industries down by 2.48% and NTPC down by 1.83% were major losers on the Sensex. 

Meanwhile, with a string of bold initiatives by the UPA II government to revive growth of the slowing economy, the rating agency Standard & Poor's (S&P) expressed hopes that implementation of the measures proposed would provide a medium-to-long term positive impact for the macroeconomic conditions.

In an attempt to reduce the fiscal burden of the country, the government had hiked diesel prices by a steep 12% or Rs 5 per litre and placed a cap on subsided cooking gas. The government also announced long awaited liberalization of foreign holding caps in civil aviation, multi-brand retail, non-news broadcast media and power exchanges. It also announced a plan to divest its stake in four companies.

S&P’s Director for sovereign ratings Takahira Ogawa pointed out that centre’s recent actions would boost the development of the nation, though expressed concerns that it is ambiguous whether these measures can be implemented or not.

The S&P CNX Nifty is currently trading at 5,598.80, down by 1120 points or 0.20% after trading in a range of 5,620.55 and 5,586.45. There were 25 stocks advancing against 25 declining ones on the index.

The top gainers of the Nifty were PNB up by 5.16%, BHEL up by 4.12%, SBI up by 2.55%, Gail India up by 2.51% and Bank of Baroda up by 2.40%. On the flip side, Wipro down by 3.81%, Cairn India down by 3.53%, TCS down 2.76%, Hindalco Industries down by 2.56% and RIL down by 2.41% were top losers on the index.

Most of the Asian indices were reeling under pressure, barring Seoul Composite, which edged higher by 0.13%, Nikkei 225 declined 0.39%, Jakarta Composite lost 1.22%, Hang Seng slipped by 0.27%, Taiwan Weighted surrendered 0.36%, Shanghai Composite plunged 0.91%, Straits Times lost 0.34% and KLSE Composite was down by 0.04%.

The European markets were trading in red with, France’s CAC 40 descended 1.03%, Germany’s DAX dropped 1.15% and the United Kingdom’s FTSE 100 declined 0.90%.