Weak trade persists; CD, Oil & Gas and Metal drags

Indian equities added losses to continue its weak trade in the late afternoon session on back of selling in front line counters. The market traded in lackadaisical mood from the morning with the key benchmark indices - S&P CNX Nifty hitting its lowest level in almost six and half weeks. Traders were seen piling position in Auto and FMCG sectors while selling was witnessed in Consumer Durables (CD), Oil & Gas and Metal sectors. In the scrip specific development, auto stocks like Maruti Suzuki and M&M were seen trading in green on hopes of rising sales this month on account of the festival season. Tata Global Beverages was seen trading under pressure after Morgan Stanley downgraded it to ‘underweight’ from ‘equal weight’ citing high valuations.

On the global front, Asian markets were trading mostly in green while the European markets were trading on a mixed note. The euro zone finance ministers will hold an extraordinary meeting which is scheduled for tomorrow i.e.  November 20, 2012, where it is expected to reach an agreement on the next disbursement of a loan to Greece, whose debt and budget troubles have rocked markets world-wide over the past few years. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,300 levels respectively. The market breadth on BSE was negative in the ratio of 948:1713 while 120 scrips remain unchanged.

The BSE Sensex is currently trading at 18,271.73, down by 37.64 points or 0.21% after trading in a range of 18,386.78 and 18,256.07. There were 10 stocks advancing against 20 declines on the index.

The broader indices were too trading in red; the BSE Mid Cap and Small Cap indices were trading lower by 0.82% and 0.75% respectively.

The top gaining sectoral index on the BSE were Auto up by 0.69% and FMCG up by 0.39%. While, Consumer Durables down by 1.39 %, Oil & Gas down by 0.98%, Metal down by 0.93%, Health Care down by 0.73% and Capital Goods down by 0.72% were top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 3.96%, Bharti Airtel up by 3.09%, ITC up by 1.91%, Mahindra & Mahindra up by 1.15% and NTPC up by 1.05%.

On the flip side, Tata Power down by 2.67%, TCS down by 1.73%, Tata Steel down by 1.65%, Reliance Industries down by 1.61% and HDFC down by 1.24% were the top losers on the Sensex.

Meanwhile, keenly eyed amendments to the controversial law against tax avoidance through foreign investments, ‘GAAR’, have been finalized, Finance Minister P Chidambaram disclosed. Amendments to the Chapter 10A of the Income Tax Act have been finalized (Chapter 10A of the Income Tax Act deals with taxation of investments). These amendments in the GAAR rules after going through the Prime Minister Office (PMO) will be reflected in the amended Chapter 10A, the investor’s friendly Finance Minister added.

GAAR (General Anti-Avoidance Rules), which was proposed in 2012-13 budget with a view to prevent tax evasion, drew flak from foreign as well as domestic investors who feared that unbridled powers to taxmen would result in harassment of investors. Post to which, the government appointed a committee headed by tax expert Parthasarthi Shome to look into their concerns.

Expert panel recommended that the rules be deferred by three years. It also called for treaty nations such as Mauritius and Singapore to be kept out of GAAR’s purview. In a major positive for the markets and investors, it also suggested the abolition of tax on gains from transfer of listed securities.

Further, Chidambaram also exuded his optimism on meeting disinvestment and spectrum sales target, confidence on pushing through with reforms measures and the relationship with RBI which he said was not antagonistic. Chidambaram underscored that government was keen to get the investment engine going and measures were being taken by the government to create a ‘better climate.’

The S&P CNX Nifty is currently trading at 5,553.05, down by 21.00 points or 0.38% after trading in a range of 5,592.75 and 5,549.25. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 4.06%, Bharti Airtel up by 2.92%, ITC up by 1.84%, M&M up by 1.12%, and NTPC up by 1.02%.

On the other hand, IDFC down by 3.58%, Lupin down by 3.07%, Tata Power down by 2.62%, Asian Paints down by 2.15% and JP Associates down by 2.03% were the major losers on the index.

Most of the Asian indices were trading in green; Hang Seng up by 0.49%, Straits Times was up by 0.36%, Kospi Composite up by 0.93%, Nikkei 225 surged 1.43% and Shanghai Composite ascended 0.11% were gainers. On the flip side KLSE Composite down by 0.39%, Taiwan Weighted descended by 0.01% and Jakarta Composite declined by 0.98% were the losers amongst Asian pack.

The European markets were trading on a mixed note with, France’s CAC 40 gain 0.06%, Germany’s DAX dropped 0.34% and the United Kingdom’s FTSE 100 descended 0.44%.