Indian equities trim gains; trade continues in red

Indian equities trimmed gains to continue weak trade below neutral line hovering near the lowest point of the day in the late afternoon session on back of selling in frontline counters. Traders were seen piling position in TECk, Consumer Durables and IT sector while selling was witnessed in Realty, Auto and Metal sector. Hectic activity was noticed in Aviation stocks after oil marketing companies reduced the price of Aviation Turbine Fuel (ATF) by 3 percent. In the scrip specific development, Jain Irrigation was trading in green after the board approved preferential issue of 4.97 crore shares at Rs 80 per share to non-promoters to raise Rs 398 crore. The board also approved to raise $40 million via FCCBs and $75 million via overseas borrowing. Mahindra & Mahindra was trading in red while Maruti Suzuki India was trading in green in weak market after Credit Suisse downgraded automaker Mahindra & Mahindra to neutral from outperform and recommended investors switch to Maruti Suzuki instead.

On the global front, Asian markets were trading on a mixed note while the European markets were trading on optimistic note. Greece has been locked in negotiations with a delegation of inspectors from troika - the European Commission, the International Monetary Fund and the European Central Bank, since early September over a two-year, 13.5 billion euro ($17.6 billion) austerity plan. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,700 and 18,700 levels respectively. The market breadth on BSE was negative in the ratio of 1232:1478 while 129 scrips remain unchanged.

The BSE Sensex is currently trading at 18,634.59 down by 78.96 points or 0.42% after trading in a range of 18,801.10 and 18,629.26. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap was down by 0.21% and Small cap indices was up by 0.14%.

The top gainers on the BSE sectoral space were, TECk up by 0.48%, Consumer Durables up by 0.44% and IT up by 0.28% while Realty down by 1.38%, Auto down by 1.10%, Metal down by 1.01%, Capital Goods down by 0.92% and Power down by 0.58% were the top losers in the space.

The major gainers on the Sensex were, Bharti Airtel up by 2.05%, Maruti Suzuki up by 1.83%, HDFC up by 1.07%, NTPC up by 0.62% and TCS up by 0.52%. On the other hand, Mahindra & Mahindra down by 3.20%, Tata Motors down by 2.36%, Sterlite Industries was down by 1.28%, Hindustan Unilever down by 1.25% and Jindal Steel down by 1.23% were major losers on the Sensex.  

Meanwhile, in continuation with the reform measures taken by the government to boost the economic growth of the nation, Prime Minister's Economic Advisory Council Chairman C Rangarajan affirmed that the government is prepared to take aggressive policy actions, despite these actions are treated as apolitical and unpopular. He pointed out that recent decisions to raise diesel prices and allow FDI in multi-brand retail have helped to reverse the adverse investment sentiment and has also acted as a stimulant for further accelerating the economic activity.

The government had raised the diesel price by a steep Rs 5 per litre and capped the number of subsidized cooking gas cylinder to six per household a year. He also remarked that the decisions to expand FDI in insurance and pension sectors will take time to fructify. Rangarajan remained confident to achieve financial growth in the range of 6 to 6.5 percent, for the current fiscal year.

Though, International Monetary Fund has recently forecasted India's GDP growth to 4.9% in 2012. He also urged focus on those sectors which are in the public domain and for which public expenditure have already been allocated in budget, so as to trigger the economy. India’s inflation rate has surged to 7.81% in September from previous month’s 7.55%. The Reserve Bank is likely to come out with its policy by October 30.

The S&P CNX Nifty is currently trading at 5,664.65, down by 22.60 points or 0.40% after trading in a range of 5,714.00 and 5,662.55. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Axis Bank up by 2.81%, Maruti Suzuki up by 1.92%, Bharti Airtel up by 1.63%, Cairn India up by 1.35% and Grasim Industries up by 1.09%. While, M&M down by 3.56%, Tata Motors down by 2.58%, DLF down by 2.49%, ACC down by 2.43% and Ambuja Cement down by 2.07% were top losers on the index.

Some amount of weakness crept into Asian market too as on one hand, Kospi Composite added 0.83%, Taiwan Weighted gained 0.70% Hang Seng rose 0.28%, Nikkei 225 surged by 1.44% and Straits Times inched higher by 0.05%, while on the other, KLSE Composite stayed lower by 0.07%, Shanghai Composite declined by 0.01% and Jakarta Composite slid by 0.08%, were the losers amongst the Asian pack.

The European markets were trading in green, France’s CAC 40 added 0.44%, Germany’s DAX ascended 0.47% and the United Kingdom’s FTSE 100 jumped 0.35%.