Indian equities lose further; Nifty below 5,700 mark

Indian equities continued its weak trade hovering near the lowest point of the day in the late afternoon session on the back of selling in frontline counters and taking cues from European counterparts. Investors have started eyeing Reserve Bank of India's (RBI) Second Quarter Review of Monetary Policy - 2012-13 which is scheduled on October 30, 2012, and will provide further direction to the market. Traders were seen piling position in Consumer Durables and FMCG sector while selling was witnessed in Power, Metal and Capital Goods sector. Telecom shares were trading under pressure after a panel of ministers on Thursday recommended that the existing GSM operators be charged a one-time fee retrospectively for all second-generation airwaves they hold beyond the 6.2 MHz mark for the tenure of their licences. In the scrip specific development, Kingfisher Airline was locked in lower circuit limit ahead of its October 20 deadline, to respond to India’s civil aviation authorities on why its licence should not be cancelled. Shares of companies engaged in gems and jewellery business like TBZ, Thangamayil Jewellery, Shree Ganesh Jewellery House, Gitanajli Gems and Renaissance Jewellery were seen trading firm in weak market on hopes of higher demand in festive season.

On the global front, Asian markets were trading mixed while the European markets were trading on pessimistic note. German Chancellor Angela Merkel while speaking at the lower house of Parliament proposed setting up of a new fund to help European countries in fiscal distress and also urged that the European Union be empowered to monitor national budgets. The European leaders committed to their goal of creating a euro-area bank supervisor by year-end, pushing divisive questions on cost-sharing into 2013. 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 1183:1544 while 122 scrips remain unchanged.

The BSE Sensex is currently trading at 18,632.96, down by 158.97 points or 0.85% after trading in a range of 18,769.59 and 18,631.48. There were 5 stocks advancing against 25 declines on the index.

The broader indices too succumbed to profit-booking; the BSE Mid cap index and Small cap indices edged lower by 0.52% and 0.26% respectively.

Broad based selling was witnessed across the BSE sectoral space, Power down by 1.38%, Metal down by 1.37%, Capital Goods down by 1.36%, Oil & Gas down by 1.18% and Realty down by 1.17%. On the flip side, Consumer Durables up by 0.90% and FMCG up by 0.49% were the only gainers.

The top gainers on the Sensex were ITC up by 1.68%, Wipro up by 0.51%, Bajaj Auto up by 0.35%, Infosys up by 0.11% and Dr Reddy’s Lab up by 0.01%. On the other hand, Gail India down by 2.70%, Hindalco Industries down by 2.37%, Jindal Steel down by 2.37%, Sun Pharma down by 2.01% and BHEL down by 1.88% were the top losers on the Sensex.   

Meanwhile, continuing to shrink for fifth consecutive month, Air passenger traffic dropped by a record 12.4% in September, as exorbitant fares and a slowing economy dented demand. According to the Directorate General of Civil Aviation (DGCA), only 4.01 million passengers flew in September compared with 4.37 million in the previous month and 4.58 million in the same month last year. Air traffic has been on declining spree since May. It fell 0.87% in May, 3.84% in June and 3.70% in August from the corresponding year-earlier periods. Further, the civil aviation ministry data, showed the total passengers carried by all the domestic airlines in the January-September period declined by a marginal 0.86% at 4.38 million passengers from 4.42 million during the corresponding month of 2011.

On a stand-alone basis, Air India took over Jet Airways (India) in market share, a first in recent times. Air India’s market share was at 19.3% in September while Jet Airways was 18.1%. However, low cost carrier, IndiGo, once again emerged as the market leader, with the airline carrying the highest number of passengers and claiming the largest market share in September. The no-frill airline carried 10.94 lakh passengers and claimed 27.2% market share last month. Meanwhile, market share of SpiceJet was at 18.5%, GoAir at 7.6%, Jet Konnect at 5.7% and finally for the beleaguered Kingfisher Airlines stood at 3.5%.

However, the Air passenger traffic figures could further decline since Airfare in India are likely to rise in the winter season, one because domestic flight capacity is down 19% from a year earlier and secondly, on account of arrival of peak travel season that goes on till January. On one hand, Jet Airways and Air India will reduce flights by 10.9% by 6.2% respectively. On the other, SpiceJet, GoAir and IndiGo will increase flights by 8.87%, 14.8% and 30% respectively.

The S&P CNX Nifty is currently trading at 5,672.10, down by 46.60 points or 0.81% after trading in a range of 5,711.70 and 5,666.05. There were 7 stocks advancing against 41 declines while 2 stocks remain unchanged on the index.

The top gainers of the Nifty were ITC up by 1.75%, Ambuja Cement up by 0.98%, HCL Tech up by 0.47%, Wipro up by 0.46% and DLF up by 0.22%. While, GAIL India down by 2.66%, Jindal Steel down by 2.30%, Hindalco Industries down by 2.25%, Sun Pharma down by 2.01% and BPCL down by 1.96% were top losers on the index.

Asian equity indices were trading mostly in the red; Taiwan Weighted declined 0.76%, Kospi Composite slid 0.78%, Jakarta Composite lost 0.46%, Straits Times skid 0.32% and Shanghai Composite surrendered 0.16%. On the flip side, Hang Seng added 0.15%, KLSE Composite gained 0.15% and Nikkei 225 advanced 0.22% were the gainers.

The European markets were trading in red with, France’s CAC 40 dropped 0.40%, Germany’s DAX descended 0.31% and the United Kingdom’s FTSE 100 lost 0.11%.