Benchmarks make lackluster start on tracking weak global cues

Key domestic benchmarks have made a lackluster start with frontline indices hitting their lowest level in two weeks tracking weakness in global markets and a spate of weak domestic macro data. The US markets ended the session at their lowest levels since the summer on Wednesday, as investors focused on the coming battle over the US ‘fiscal cliff’. While, Asian stocks were trading mostly in the red as investors reacted to the prospect of drawn-out negotiations over the looming US ‘fiscal cliff’ by shedding riskier assets, but Japanese equities bucked the trend as a sharp slide in the yen lifted exporters’ shares.

Back home, investors reacted depressingly to the revision in August inflation numbers. A sharp upward revision in the August numbers overshadowed the lower-than-expected October figure. The August WPI inflation was revised to 8.01 percent from the provisional 7.55 percent. However, inflation numbers eased marginally in the month of October. Inflation declined marginally to 7.45 percent in October even though prices of food items like rice, wheat pulses and potato showed a rise. The losses remain capped as country’s largest telecom operator Bharti Airtel surged by about 4 percent and Idea Cellular gained 2.6 percent after 2G auction. Bharti was the provisional bidder in only one circle (Assam Circle) while Idea Cellular was provisional bidder in 8 circles.

On the sectoral front, realty witnessed the maximum gain in trade followed by consumer durables and capital goods while, software, metal and auto remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE made a negative start; there were 670 shares on the gaining side against 967 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 18,590.07; about 28 points lower compared to its previous closing of 18,618.87, and has touched a high and a low of 18,593.54 and 18,439.06 respectively.

The index is currently trading at 18,509.02, down by 109.85 points or 0.59%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a negative start with 39.09% stocks advancing against 56.42% declines. The broader indices too were struggling to get some traction; the BSE Mid cap and Small cap indices surged 0.23% and 0.16% respectively.

The few gaining sectoral indices on the BSE were, Realty up by 1.16%, CD up by 0.56% and CG up by 0.48%. While, IT down by 1.45%, Auto down by 0.92%, Metal down by 0.77%, FMCG down by 0.61% and TECk down by 0.56% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.73%, GAIL up by 1.98%, L&T up by 1.07%, HUL up by 0.50% and Coal India up by 0.39%.

On the flip side, Sun Pharma was down by 2.61%, Infosys was down by 2.05%, ITC was down by 1.85%, TCS was down by 1.58% and Tata Motors was down by 1.44% were the top losers on the Sensex.

Meanwhile, for fast tracking the clearances to large infrastructure projects such as roads, ports and airports, the government is planning to approve the proposal to set up National Investment Board (NIB), in the next two-three weeks. A Cabinet note in this regard has already been circulated to concerned ministries.

As per the plan, the NIB would be headed by Prime Minister Manmohan Singh. NIB is being set up to ensure that clearances required for major projects would be granted by the relevant ministries without unnecessary delays. Moreover, the NIB plan is part of the government's aggressive reforms agenda to stimulate economic growth and to address a longstanding industry complaint that ministerial clearances delay crucial mega projects. A Cabinet note prepared by the Finance Ministry said that NIB is necessary to held up several big-ticket projects due to inordinate delays in getting approvals from different ministries.

However, in early October Environment Minister Jayanthi Natarajan had raised objections to the NIB proposal. In a letter to the Prime Minister, she said that changes have been sought on the issue of granting project approvals.

The S&P CNX Nifty opened at 5,650.35; about 16 points lower compared to its previous closing of 5,666.95 and has touched a high and a low of 5,651.65 and 5,615.40 respectively.

The index is currently trading at 5,634.95, down by 32.00 points or 0.56%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.52%, Gail up by 2.03%, Ambuja Cement up by 1.69%, DLF up by 1.65% and Kotak Bank up by 1.46%.

On the flip side, Ultratech Cement down by 4.58%, Sun Pharma down by 2.59%, Infosys down by 2.02%, ITC down by 1.80% and TCS down by 1.68%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down by 12.35 points or 0.60% to 2,043.07, Hang Seng plunged by 217.50 points or 1.01% to 21,224.49, KLSE Composite was down by 5.91 points or 0.36% to 1,631.68, Straits Times lost 23.04 points or 0.76% to 2,954.86, Kospi Composite declined by 29.22 points or 1.54% to 1,864.60 and Taiwan Weighted was down by 18.41 points or 0.26% to 7,141.31.

Nikkei 225 was the lone gainer, up by 93.13 points or 1.03% to 8,760.70.

Jakarta Composite remained closed.