Weak trade persist; Nifty below 5,700 mark

Indian equities added losses to continue its weak trade in the late afternoon session on account of persistent selling in frontline counters and taking cues from European counterparts. Traders were seen piling up position in Health Care and FMCG sector, while selling was witnessed in Realty, Oil & Gas and Capital Goods sector. Investors have started eyeing the second quarter September 2012 earnings season, which will begin around mid-October 2012 thereby providing further direction. In the scrip specific development, DLF was trading in red amid allegations that the company provided undue favours in its transactions with Robert Vadra, although the charges have been vehemently denied by both the parties. Hindalco Industries, country’s largest aluminium maker, was trading under pressure after the foreign research firm ‘CITI’ downgraded the stock to a sell. Emkay Global Financial Services continued its downward circuit limit of 10% after losing 10% earlier on Friday due to wrong order punched by its member that caused huge loss to the firm. Index heavyweight Reliance Industries was trading in red as the foreign research firm Morgan Stanley has downgraded the stock to underweight.

On the global front, Asian markets were trading in red barring KLSE Composite, while the European markets were too trading on pessimistic note. Investors are anticipating that Spain will ask for a bailout and along with a bailout, the country would be eligible for the European Central Bank’s new bond-purchase program, which could further reduce its borrowing costs. Besides, Germany's Chancellor Angela Merkel will make her first visit to Greece tomorrow i.e. October 09, 2012, since the debt crisis began in 2009. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,700 and 18,800 levels respectively. The market breadth on BSE was negative in the ratio of 1289:1452 while 111 scrips remain unchanged.

The BSE Sensex is currently trading at 18,758.95 down by 179.51 points or 0.95% after trading in a range of 18,969.19 and 18,738.37. There were 11 stocks advancing against 19 declines on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.36% and Small cap index lost 0.23%.

The gainers on the BSE sectoral space were, Health Care up by 1.26% and FMCG up by 0.08%. On the other hand Realty down by 3.24%, Oil & Gas down by 2.26%, Capital Goods down by 2.18%, Consumer Durables down by 1.41% and IT down by 1.33% were the top losers on the BSE sectoral space.

The top gainers on the Sensex were Sun Pharma up by 3.61%, Jindal Steel up by 1.55%, Bharti Airtel up by 1.24%, NTPC up by 1.17% and ITC up by 0.98%.While, Reliance Industries down by 3.90%, Hindalco Industries down by 3.88%, Tata Power down by 2.69%, L&T down by 2.61% and SBI down by 2.56% were top losers on the Sensex.

Meanwhile, the second meeting of the Group of Ministers (GoM) headed by agriculture minister Sharad Pawar on the land acquisition bill is likely to be held on Oct 8, to clear out the differences among the ministers on the contentious issues, including the clause of prospectivity in the Bill and the question of rehabilitation and resettlement package on par with the land acquisition bill for the affected parties in the mineral-rich forest areas.

The last GoM meeting was held on September 27, where a strong view on having a window of retrospectivity had cropped up with members feeling that the Bill should apply prospectively only. However, considering the protests, the Rural Development Ministry has said that necessary changes has been made in the controversial clause, in a way that the Bill shall apply prospectively only, i.e. for new acquisition only, and not retrospectively.

As per this clause, Bill would be applicable to all cases of land acquisition before the date of commencement of the Act if the award under the 1894 Act has not been made.

The S&P CNX Nifty is currently trading at 5,688.25, down by 58.70 points or 1.02% after trading in a range of 5,751.85 and 5,680.20. There were 16 stocks advancing against 33 declines while 1 stock remain unchanged on the index.

The top gainers of the Nifty were Sun Pharma up by 3.81%, Jindal Steel up by 1.85%, Cairn India up by 1.76%, Asian Paints up by 1.54%, and Ultratech Cement up by 1.47%. While, DLF down by 7.19%, Hindalco Industries down by 4.08%, Reliance Industries down by 3.99%, JP Associates down by 3.04% and Ambuja Cement down by 2.96% were top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 0.56%, Hang Seng was down by 0.89%, Jakarta Composite was down by 1.46%, Straits Times was down by 1.00%, Kospi Composite was down by 0.67% and Taiwan Weighted was down by 0.97%. On the other hand, KLSE Composite was up by 0.08%.

The European markets were trading in red, France’s CAC 40 lost 1.27%, Germany’s DAX dropped 1.40% and the United Kingdom’s FTSE 100 descended 0.09%.