Benchmarks recover from intra-day’s low; broader indices too trim losses

Benchmark equity indices have recovered a bit from intra-day low, but the sentiment remains bearish in wake of feeble global cues.  Asian pacific shares are trading mostly lower on Thursday, as worries over the coming fiscal cliff in the U.S. continued to weigh on sentiment following comments from U.S. President Barack Obama on Wednesday, who said that unless politicians can find a compromise, the resulting tax hikes and spending cuts could send the world's largest economy into a recession. Additionally, European stock futures are signaling to a lower opening on Thursday on concerns U.S. lawmakers heading for a tough battle on the fiscal row and as figures were likely to show the euro zone slipped back into recession.

Back home, immense resilience has been staged from Consumer Durable stocks, which emerging as the sole gainer among 13 sectoral pivotals, are cutting short bourses losses. Additionally, even wireless services providers, namely Idea Cellular and Bharti Airtel have enticed significant investor’s attention after an auction of 2G airwaves that attracted less demand than targeted by the government because prices are seen as too high.

On the flip side, Software services exporters with significant business in the United States are among the leading decliners. Following the suite are stocks from Metal, Health Care counter. Thus, 30 share index, Sensex, declining over century of points, is currently trading sub 18500 level, while 50 share index, Nifty, declining over 3/ 4 percent is hovering  near 5600 mark.  The overall market breadth on BSE is in the favour of declines which have piped advances in the ratio of 1579:883, while 105 shares remained unchanged.

The BSE Sensex is currently trading at 18460.87, down by 158.00 points or 0.85% after trading in a range of 18593.54 and 18432.06. There were 9 stocks advancing against 21 declines on the index.

The broader indices too have trimmed losses; the BSE Mid cap and Small cap indices were trading lower by 0.46% and 0.45% respectively.

The only gaining sectoral index on the BSE was Consumer Durables (CD) up by 0.67%. While, IT down by 1.75%, Metal down by 1.50%, Health Care down by 1.06%, Auto down by 0.97% and Oil & Gas down by 0.92% were top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.25%, Gail India up by 1.07%, Maruti Suzuki up by 0.77%, HUL up by 0.60% and HDFC up by 0.58%.

On the flip side, Tata Steel down by 2.49%, Hindalco Industries down by 2.29%, Infosys down by 2.14%, ITC down by 2.04% and Wipro down by 2.03% were the top losers on the Sensex.

Meanwhile, Commerce and Industry Minister Anand Sharma, realizing the difficulty of achieving a target of $360 billion exports, is planning to meet Finance Minister, P Chidambaram, seeking subsidy on loans for certain sectors to boost industrial production and exports. However, minister also expressed concerns over the contraction in the industrial production measured on IIP in September.

Discussions has been made on adding more sectors under the interest subvention (scheme), like all the SMEs have been given interest subvention of two percent. Though, exports are on decline since May and contracted by 1.63 percent last month, the trade deficit widened and rose to record $21 billion in October. Further, there has been decline in demand from the traditional markets of the US and Europe, Sharma added. He further said that the government is in constant touch with all stakeholders including the industry chambers.

Amid continuing decline in overseas shipments, the Director General of Foreign Trade (DGFT) is reviewing performance of different aspects of the exporting sectors and is likely to complete the exercise in a couple of days. Merely after that, the government may come out with some support measures for the sector to arrest the decline.

The S&P CNX Nifty is currently trading at 5,617.30, down by 49.65 points or 0.88% after trading in a range of 5,651.65 and 5,610.85. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.41%, HCL Tech up by 1.79%, Kotak Bank up by 1.23%, GAIL up by 1.14% and Cairn India was up by 0.99%.

On the other hand, Ultra-Tech down by 5.25%, JP Associates down by 2.97%, Tata Steel down by 2.59%, Hindalco down by 2.29% and TCS down by 2.17% were the major losers on the index.

Most of the Asian indices were in red; Shanghai Composite declined 0.85%, Hang Seng plunged 1.39%, Straits Times was plummeted 1.10%, Kospi Composite declined by 1.23%, Taiwan Weighted slid 0.22%, while Nikkei 225 up by 1.90% was the sole gainer amongst Asian pack.