Benchmarks dip to intra-day low; Nifty slips into red

Losing ground steadily, benchmark equity indices have now slid to intra-day low level, as investors have undertook cautious stance on prevailing uncertainty whether the government will be able to get lawmakers’ approval for policy changes announced this quarter in the winter session of parliament, which begun today. Losses of Oil & Gas, Realty and Power stocks mainly are erasing bourses early gains. However, stocks from Bankex, Capital Goods and Public Sector Undertaking counters, are lending some support. Thus, 30 share barometer index, Sensex, hanging on with gains of over 15 points, is currently trading sub 18450 psychological level, while 50 share index, Nifty, despite slipping into negative terrain, is holding onto 5600 bastion. The broader indices, too have pared some losses.

On the global front, Asian pacific shares rose on Thursday as a survey showed China's manufacturing sector expanded for the first time in 13 months in November, adding to optimism after firm U.S. factory data that the global growth slowdown may have turned a corner. Additionally, European stock futures advanced, indicating that European stock market will rise for a fourth day, as a report signaled Chinese manufacturing expanded for the first time in 13 months.

Closer home, banking stocks are among the leading gainers on hopes the winter session of parliament will pass bills to liberalise the insurance, pension and banking sector. However, so far in the parliament session, the speaker rejected Trinamool Congress's no-confidence motion against the decision to allow FDI in retail.

The BSE Sensex is currently trading at 18479.62, up by 19.24 points or 0.10%, after touching a high and a low of 18544.08 and 18466.69 respectively. There were 13 stocks advancing against 17 declines on the index. The overall market breadth on BSE was in the favour of advances which have outnumbered declines in the ratio of 1216:1180, while 131 shares remained unchanged.

The broader indices were in green; the BSE Mid cap and Small cap indices rose 0.15% and 0.36% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 0.55%, CG up by 0.53%, PSU up by 0.42%, Tech up by 0.42%, and IT up by 0.31% while, CD down by 0.70%, Oil and Gas down by 0.43%, Realty down by 0.36%, Power down by 0.32% and Auto down by 0.19% were loser on the index.

The top gainers on the Sensex were SBI up by 1.50%, HDFC bank up by 0.97%, Infosys up by 0.88%, L&T up by 0.85% and Bharti Airtel up by 0.68%.

On the flip side, Tata Motors was down by 1.49%, Sun Pharma was down by 1.33%, Tata Power was down by 1.05%, BHEL was down by 1.01% and Hindalco Inds was down by 0.84%  were the top losers on the Sensex.

Meanwhile, with the European Union and the US markets struggling with fiscal crisis, in a move to help the exporters, the Commerce Ministry is planning to introduce a method of providing incentives to exporters in order to achieve the $320 billion exports target for the current financial year. As per the Commerce and Industry Additional Secretary Rajeev Kher, special efforts were needed that could be in nature of incentives, additional markets and making more efforts on market promotions.

Further, with the recent FICCI survey highlighting that the export target of $320 billion for FY13 is unlikely to be met due to the global demand slowdown. Moreover, rising cost of raw materials and weak demand from overseas are primary factors that are bothering members of the export community. As a result, primary focus will now be for providing tax incentive or market promotion scheme with an ultimate aim of making the export more profitable.

At present, Europe and the US have been the primary export markets and as per Kher, new export strategy should be developed targeting other countries like Africa and the Middle East to take the next leap forward.

However, trade deficit with China has also risen to $40 billion and thus arises the need to export more to that country. Further, optimistic about the pharma sector, Kher said the sector will be able to achieve the export target of $25 billion by 2014.

Moreover, increasing imports and widening trade deficit will definitely impact the country's CAD which will put pressure on rupee.

S&P CNX Nifty is currently trading at 5,612.00, down by 2.80 points or 0.05%, after trading in the range of 5,638.25-5,611.55 respectively. There were 20 stocks advancing against 28 declines and 2 remain unchanged on the index.

The top gainers of the Nifty were Axis Bank up by 1.76%, SBI up by 1.51%, Asian Paint up by 1.18%, Ambuja Cement and L&T were up by 0.80%.

On the flip side, Sun Pharma and Ultratech Cement down by 1.62%, Tata Motors down by 1.60%, IDFC down by 1.49% and Simens down by 1.35%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng gained 0.64%, Jakarta Composite was up by 0.27%, Nikkei 225 surged by 1.56%, Straits Times gained 0.87%, Seoul Composite was up by 0.82% and Taiwan Weighted was higher by 0.24%.

On the other hand, Shanghai Composite down by 0.80% and KLSE Composite down by 0.09%, were the only losers amongst Asian pack.