Indian equities pare gains to trade below neutral line

Indian equities pare gains to continue its weak trade below neutral line in the late afternoon session on back of selling in front line counters and taking cues from European counterparts. Traders were seen piling position in Auto and FMCG sectors while selling was witnessed in Realty, Metal and TECk sectors. In the scrip specific development, debt-laden Kingfisher Airlines is trading firm in green on reports of a likely stake sale to a private equity firm - Texas Pacific Group Capital. Reliance Capital is trading firm after the financial services firm began talks to sell a 26 percent stake in its general insurance arm to a strategic foreign partner. Shriram Transport Finance Corporation is trading in green after Standard Chartered upgraded the company to outperform. Jubilant Foodworks is trading firm after Goldman Sachs recommended a buy rating on the stock with a target price of Rs 1,704. SKS Microfinance is locked at the upper circuit limit on reports that foreign investors have hiked their stake to an all-time high of 31.77% in the July-September quarter from a record low of 8.33% at the end of preceding three-month period. Usha Martin is trading in red after credit rating agency India Ratings revised the company’s outlook to negative.

On the global front, Asian markets were trading mixed while the European markets were trading on a pessimistic note. The severe austerity measures have impacted Greece, Spain, and Portugal in particular barring Ireland which has stabilized and there are positive signs in Italy, though core euro-zone countries, such as France and even Germany, are now affected. Both France and Germany are likely to report a decline in GDP this quarter. The euro zone finance ministers will hold an extraordinary meeting which is scheduled for today 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. Besides, Moody's Investors Service lowered France’s sovereign rating by one notch to Aa1, stripping the country of its coveted triple-A rating. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,400 levels respectively. The market breadth on BSE was negative in the ratio of 1030:1652 while 140 scrips remain unchanged.

The BSE Sensex is currently trading at 18,316.18, down by 22.82 points or 0.12%. There were 11 stocks advancing against only 19 declines on the index.

The broader indices have slipped into red terrain; the BSE Mid Cap and Small Cap indices were down by 0.62% and 0.54% respectively. The top gaining sectoral index on the BSE was Auto up by 0.22% and FMCG up by 0.01%. While, Realty down by 2.49%, Metal down by 0.82%, TECk down by 0.81%, IT down by 0.69% and Capital Goods down by 0.59% were top losers on the index

The top gainers on the Sensex were Mahindra & Mahindra up by 2.66%, HDFC up by 2.14%, Tata Power up by 1.66%, Wipro up by 1.22% and Gail India up by 0.67%. While, Hindalco Industries down by 1.86%, Infosys down by 1.51%, SBI  down by 1.33%, Bajaj Auto down by 1.14% and Hero MotoCorp down by 0.90% were the top losers on the Sensex.

Meanwhile, India is all set to conclude the Free Trade Agreement (FTA) in services and investment with Association of South East Asian Nations (ASEAN) by next month, which will send a strong signal of deepening economic engagement and further allow for rapid expansion in trade and investment flows in both directions. Prime Minister Manmohan Singh while addressing India-ASEAN summit, invited investments from the 10-nation ASEAN into India and also highlighted the steps taken by India to improve investment environment.

The FTA in services and investment were delayed due to strong differences between the two sides. However, Singh is optimistic on the conclusion of the agreement on trade in services and investments, together with existing agreement on trade in goods, which will be a launch pad for rapid expansion in economic relations with the ASEAN. By adding further he said, India’s relationship with the ASEAN continues to expand in all magnitude, with commerce and connectivity being crucial areas of this relationship in which good progress has been made.

Further, referring to the India-ASEAN FTA on trade in goods signed in 2009, Singh said that it has served well, with the two-way commerce increasing to nearly $80 billion in the Indian financial year ending March 2012, exceeding the target of $70 billion. However, India would offer its own resources, expertise and experience to support growth and development in ASEAN countries, where such needs exist.

The S&P CNX Nifty is currently trading at 5,564.85, lower by 6.55 points or 0.12%. There were 14 stocks advancing against 35 stock declines while 1 remains unchanged on the index.

The top gainers of the Nifty were Mahindra & Mahindra up by 2.61%, HDFC up by 2.37%, Power Grid up by 1.83%, Tata Power up by 1.29% and Wipro up by 1.20%. On the flip side, JP Associates down by 3.20%, DLF down by 2.08%, ACC down by 2.04%, Hindalco Industries down by 1.86% and Sesa Goa down by 1.65% remained top losers on the index.

The Asian equity indices were trading on a mixed note; Straits Times was up by 0.32%, Kospi Composite up by 0.64%, Taiwan Weighted up by 0.23% and KLSE Composite up by 0.01% were gainers amongst Asian pack.

On the flip side, Hang Seng slipped by 0.16%, Nikkei 225 down by 0.12%, Shanghai Composite declined 0.40% and Jakarta Composite down by 0.31% were trading in red.

The European markets were trading in red with, France’s CAC 40 lost 0.39%, Germany’s DAX slipped 0.06% and the United Kingdom’s FTSE 100 descended 0.26%.