Weak trade persist in late afternoon session

Indian equities trim losses but continued its weak trade in the late afternoon session on back of selling in front line counters. The sentiments on the street were in pessimistic mood in absence of any upside triggers with market-participants waiting for Rajya Sabha to vote on FDI after Opposition motion seeking immediate withdrawal of the decision was rejected convincingly in Lok Sabha. Traders were seen piling position in Realty, CD and Auto sectors while selling was witnessed in IT, TECk and Capital Goods sectors. Fertilizer stocks, such as Chambal Fertilizers, RCF, and National Fertilizer have enticed some traction on hopes of CCEA nod for new urea investment policy. IT stocks Infosys, TCS, Wipro and HCL Technologies were trading under pressure for the second day in a row after Cognizant’s SEC filing which clouded revenue outlook for the sector. In the scrip specific development, Mphasis a subsidiary of Hewlett-Packard was trading firm as the consolidated net profit rose 14.3% year-on-year and 0.3% quarter-on-quarter basis in the fourth quarter ending October 31, 2012.

On the global front, Asian markets were mostly trading in green while the European markets were trading on optimistic note. The European Central Bank may refrain from cutting interest rates any further after its pledge to buy government bonds, lowered borrowing costs and boosted confidence that the euro area can emerge from recession next year. Greece’s credit grade was reduced to SD, or selective default, by Standard & Poor’s from CCC after the government began buying its bonds back from investors, the rating agency stated. On the economy front, euro zone retail sales on a monthly comparison decreased 1.2% in October following a 0.6% drop in September. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,900 and 19,300 levels respectively. The market breadth on BSE was negative in the ratio of 1270:1445 while 116 scrips remain unchanged.

The BSE Sensex is currently trading at 19,295.72, down by 96.14 points or 0.50% after trading in a range of 19,491.60 and 19,186.24. There were 8 stocks advancing against 22 declines on the index. The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.31% and 0.18% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.59%, Consumer Durables (CD) up by 0.59% and Auto up by 0.17%, while IT down by 1.80%, TECk down by 1.44%, Capital Goods down by 0.69%, Health Care (HC) down by 0.40% and Bankex down by 0.39% were the major losers on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.18%, Tata Motors up by 1.09%, Sterlite Industries up by 1.02%, RIL up by 0.31% and HDFC up by 0.30%.

On the flip side, Infosys down by 2.14%, Bharti Airtel down by 2.01%, TCS down by 1.74%, HDFC Bank down by 1.46% and Cipla down by 1.11% were the top losers on the Sensex.

Meanwhile, in a move to improve the financial health of power distribution companies (Discoms), the Power Ministry is working on the State Electricity Distribution Responsibility Bill that would prescribe guidelines to make states responsible for introducing new power sector reforms.

Power Secretary P Uma Shankar while addressing an industry seminar organized by ASSOCHAM said, the proposed Bill is part of the distribution utilities’ restructuring package, which the government has floated for re-structuring the sick distributing power companies to improve their financial health and would be sent to the states for enactment. By adding further he said to mandate compliance of the provisions of the financial restructuring package the States would enact the legislation within 12 months from the date of circulation of model legislation.

On the mandatory conditions of the package, Shankar said 50% of the short term outstanding liabilities up to March 31, 2012 would be taken over by the state governments, which will be first converted into bonds to be issued by distributing companies to participating lenders, duly backed by the state government's guarantee. The scheme will be effective as soon as notified and will remain open up to December 31, 2012 unless extended by the government. The state governments will also take over the liability from power distributing companies in the next 2-5 years by way of special securities and repayment and interest payment.

By adding further, he expressed his views on widening gap between demand and supply of domestic coal, forcing power companies to import coal. He added that, coal-based power generation capacity has increased by 52%, while domestic coal production has seen 17% growth between 2009 and 2012. 

The S&P CNX Nifty is currently trading at 5,869.35, down by 31.15 points or 0.53% after trading in a range of 5,927.75 - 5,838.90. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were JP Associates up by 3.77%, DLF up by 1.71%, Reliance Infrastructure up by 1.63%, Tata Motors up by 1.11% and Axis Bank up by 1.08%

On the flip side, HCL Tech down by 2.47%, Bharti Airtel down by 2.18%, Infosys down by 2.06%, Grasim Industries down by 1.83.% and TCS down by 1.83% and were the top losers on the Nifty.

Asian markets were mostly trading in positive terrain, Straits Times gained 0.04%, Jakarta Composite advanced 0.18%, KLSE Composite rose 0.26%, Nikkei 225 surged 0.81% and Seoul Composite was trading higher by 0.13%. On the other hand, Hang Seng lost 0.09%, Shanghai Composite down by 0.13%, Taiwan Weighted dropped 0.34% were the losers among the Asian pack. 

The European markets were trading in green with, France’s CAC 40 added 0.57%, Germany’s DAX ascended 0.36% and the United Kingdom’s FTSE 100 gained 0.10%.