Profit booking in heavyweights drag benchmarks lower

Indian equity indices, erasing all their morning gains, exhibited a bleak session of performance on Tuesday due to profit taking in select blue chip stocks. Proceedings in today’s session were exactly the opposite of what transpired on Monday when the main indices recovered in the latter half. Today, the first half was better while the second half turned out to be disappointing one. Both the frontline gauges lost their crucial 5,650 (Nifty) and 18,600 (Sensex) levels as investors kept themselves busy in offloading positions in sectors like realty, metal and capital goods. Concerns of poor Q2 earnings mainly became a reason for selling in frontline indices. Shares of Reliance Industries reversed early morning gains despite reporting decent set of results for the fiscal second quarter late on Monday evening. Moreover, traders also overlooked decent earning from Axis bank. The bank’s net profit for the quarter has registered growth of 22.08% at Rs 1123.54 crore as compared to Rs 920.32 crore for the quarter ended September 30, 2011.

The investors also remained concern over political worries as the Opposition parties stepped up pressure on the government for an independent inquiry into the land deal between Congress chief Sonia Gandhi's son-in-law Robert Vadra and realty major DLF. Moreover, some amount of denting also came in after the rupee once again weakened and was trading near 53 mark versus dollar at the time of equity market closing.

However, the global cues remained positive as European markets traded fabulously in the early deals on Tuesday, with investors buoyed by the latest batch of US data and earnings. Moreover, investors also remained hopeful that a meeting of European leaders later in the week can advance plans to tackle Spain and Greece's debts. Meanwhile, most of the Asian equity indices ended the session in the green as investors sentiment improved thanks to an overnight rally in US stocks that was fuelled by better than expected earnings from Citigroup Inc (C.N), the third-largest US bank, and above forecast retail sales data.

Back home, the major blow came in from the realty space, which tumbled over three percent. Rate sensitive like Banking, Auto and Realty clobbered out off shape as higher than expected September inflation numbers dimmed the rate cut hope in upcoming monetary policy review by Reserve Bank of India (RBI) on October 30, 2012. Selling in Metal and Power stocks too dampened the sentiments, both the sector ended the session with a cut of over a percentage point.

The NSE’s 50-share broadly followed index Nifty fell by about forty points ending tad below its psychological 5,650 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex tumbled by over one hundred and thirty points to finish below the psychological 18,600 mark. The broader markets too hammered badly and ended the session with a cut of over half a percent. 

The overall volumes stood at over Rs 1.80 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favor of declines as there were 1,179 shares on the gaining side against 1,712 shares on the losing side while 123 shares remain unchanged

Finally, the BSE Sensex lost 135.85 points or 0.73% to settle at 18577.70, while the S&P CNX Nifty declined by 39.25 points or 0.69% to end at 5,648.00.

The BSE Sensex touched a high and a low of 18,801.10 and 18,549.28, respectively. The BSE Mid-cap and Small-cap indices were down by 0.72% and 0.41%, respectively.

Maruti Suzuki up 2.13%, Hero MotoCorp up 1.70%, Bharti Airtel up 1.65%, Sun Pharma up 0.52% and HDFC up 0.47% were the major gainers on the Sensex. On the flip side, Mahindra & Mahindra down 3.66%, Tata Motors down 2.62%, Tata Steel down 2.45%, Hindalco down 2.38% and Sterlite down 2.26% were the major losers on the index.

The only gainers on the BSE sectoral space were Consumer Durables (CD) up 0.21% and TECk up 0.05%, while Realty down 3.05%, Metal down 1.89%, Capital Goods (CG) down 1.51%, Power down 1.32% and PSU down 0.93% were top losers on the BSE sectoral space.

Meanwhile, for the second time in the month, oil marketing companies (OMCs) slashed the price of Aviation Turbine Fuel (ATF) by 3 per cent, a move that would ease some burden of cash-strapped airlines since jet fuel constitutes over 40 per cent of an airline's operating costs.

Aviation Turbine Fuel (ATF) price at T3 terminal in Delhi was slashed by Rs 2,117 per kilolitre (kl), or 3 percent, to Rs 68,399 per kl with effect from October 15, midnight. In Mumbai, jet fuel will cost Rs 68,731 per kl as against Rs 70,949.97 currently. Meanwhile, Kolkata would see price cut by Rs 2,246 to Rs 75,491 per kl while the same will cost Rs 72,120 in Chennai from October 16, 2012 as against Rs 74,423.43 currently.

The reduction, which comes on heels of a steep 4.3 per cent (Rs 3194.72 per kl) cut in rates effective from October 1, was achievable on the back of firm rupee against US dollar, which made international oil cheaper. Prior to these cuts, ATF price were hiked on five occasions since July. State-run OMCs, viz, IOC, Hindustan Petroleum and Bharat Petroleum Corporation, revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.

 The S&P CNX Nifty touched a high and a low of 5,714.00 and 5,635.60 respectively.

The top gainers on the Nifty were Axis Bank up 2.05%, Maruti up 2.00%, Hero MotoCorp up 1.84%, Cairn up 1.53% and Bharti Airtel up 1.53%.

The top losers on the index were DLF down 4.42%, M&M down 3.38%, ACC down 3.17%, Tata Steel down 2.64% and Reliance Infra down 2.48%.

European markets were trading in green. France’s CAC 40 up 0.62%, Germany’s DAX up 0.78% and Britain’s FTSE 100 up by 0.69%.

All Asian markets went home with green mark barring KLSE Composite, which edged marginally down. The stronger than expected retail sales data from the world’s largest economy supported the market to a major extent. Japan’s Nikkei ended with strong gains on the back of firm recovery in index heavyweight - Softbank following the official announcement that it will acquire a majority stake in Sprint Nextel Corp. Meanwhile, Hong Kong and China market closed with marginal gains on Tuesday ahead of China's growth data and with strong performance of Chinese real estate developers.