Markets continue to trade lower; oil & gas and realty drag

Indian equity markets have continued their sluggish trend with benchmark indices trading lower by about half a percent. The realty and oil & gas sector stocks continued to drag the markets lower, while the weak start of the European markets too have added pressure. There is European finance ministers’ meet later in the day where they will formally launch a 500-billion-euro rescue fund for the embattled eurozone. Most of the Asian markets too were trading lower. Back home, though the broader markets were outperforming the benchmarks but apart from the defensive healthcare, FMCG and a little bit from metal none of the sectoral gauges were showing any sign of recovery. There was some spurt in the retail stocks when Finance minister P Chidambaram tried to justify the government’s stand on FDI approvals. He also said that global problems have slowed GDP growth, high inflation and declining investments were responsible for slow growth. Market heavyweight Reliance Industries was putting pressure on the markets after the petroleum ministry rejected RIL’s plea of any immediate revision in gas price before April 2014. RIL has sought more than a three-time increase in the price of natural gas being produced from its KG-D6 field on the eastern coast.

The BSE Sensex is currently trading at 18838.78 down by 99.68 points or 0.53% after trading in a range of 18,969.19 and 18838.37. There were 14 stocks advancing against 16 declines on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 0.20% and Small cap index gained 0.42%.

The gainers on the BSE sectoral space were, HC up by 1.60%, FMCG up by 0.50% and Metal up by 0.37%. On the other hand Realty down by 1.74%, Oil & Gas down by 1.62%, CG down by 1.50%, IT down by 0.95% and Bankex down by 0.87% were the top losers on the BSE sectoral space.

The top gainers on the Sensex were Sun Pharma up by 3.82%, Sterlite Inds up by 2.03%, NTPC up by 1.52%, ITC up by 1.27% and Tata Steel was up by 1.17%.While, Reliance Inds down by 3.22%, Hindalco down by 2.72%, BHEL down by 2.38%, Tata Power down by 2.31% and Wipro down by 2.09%, were top losers on the Sensex.

Meanwhile, notwithstanding strong opposition from allies of UPA government on its decision allowing foreign direct investments (FDI) in multi-brand retail, the Competition Commission of India (CCI) chairman Ashok Chawla pointed out that the entry of big players in the retail market would trigger competition, ensuring innovative and much cheaper products with better quality. He also suggested that the retail sector in India has to be regulated with no special dynamics like any other sector.

UPA ally Trinamool Congress had withdrawn support to the government opposing its decision allowing 51% FDI in multi-brand retail, while other political parties including opposition BJP and Left parties also expressed its strong protest by stamping it as anti-people decision by pointing that it would affect business of small retailers. However, the industry has welcomed the reform and hopes that it would be a huge mood lifter and also expects that it would benefit all stakeholders -farmers, small manufacturers as well as customers.

The Consumer organization CUTS Secretary General Pradeep Mehta opined that there is less room for anti-competitive practices of predatory pricing and abuse of dominance by big retail players due to low entry barriers for un-organized retail. Global retail giants - Walmart and Carrefour which have been approaching government with high interest to FDI in multi-brand retail, would now be allowed to up to 51% to open stores in 10 states and UTs in India. US-based Walmart has expressed its hopes to open its first store within 18 months.

Competition Commission of India (CCI) is a statutory body of Government of India responsible to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

The S&P CNX Nifty is currently trading at 5,715.10, down by 31.85 points or 0.55% after trading in a range of 5,751.85 and 5,713.25. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 4.01%, Cairn up by 2.10%, Asian Paints up by 1.66%, NTPC up by 1.64%, and Sesa Goa was up by 1.60%. While, DLF down by 5.13%, Reliance Inds down by 2.93%, BHEL down by 2.33%, Ambuja Cement down by 2.29% and Bank of Baroda down by 2.05% were top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 0.73%, Hang Seng was down by 0.63%, Jakarta Composite was down by 0.39%, KLSE Composite was down by 0.09%, Straits Times was down by 0.86%, Kospi Composite was down by 0.67% and Taiwan Weighted was down by 0.97%. 

Most of the European markets have made a weak start, CAC 40 was down by 1.23%, DAX was down by 0.83%, while the FTSE 100 was marginally in green, up by 0.04%.