Benchmarks extend losses amid cautious trade

Indian equity markets extended earlier losses in the late morning session, amid lack of triggers. Investors’ mood remained quite cautious ahead of Reserve Bank of India's monetary action on Dec 18 where it is widely expected to leave key rates unchanged. In currency markets, Indian rupee continued its depreciating streak against US currency on the back of increasing dollar demand from importers and state-run banks. On sectoral front, stocks from automobile, realty, healthcare and metal sectors found some support, shares from information technology, consumer durables and FMCG segments were trading weak. In global markets, most Asian shares were trading in red amid lack of positive catalysts and an absence of a solution to the fiscal cliff problem that overshadowed US economic data. European market, which ended flat on Friday, is expected to remain muted. Back home, the market breadth favoring positive trend; there were 1,409 shares on the gaining side against 1,035 shares on the losing side while 128 shares remain unchanged.

The BSE Sensex is currently trading at 19,282.03 down by 35.22 points or 0.18% after trading in a range of 19,346.78 and 19,268.85. There were 18 stocks advancing against 11 declines on the index and one remains unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51% and Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were, Auto up by 0.92%, Realty up by 0.67%, Healthcare up by 0.58%, Metal up by 0.57% and PSU up by 0.45%. While, TECk down by 1.01%, IT down by 0.91% , CD down by 0.83%, FMCG down by 0.62%, and Capital Goods down by 0.19% were the few losers on the index.

The top gainers on the Sensex were Hindalco Inds up by 2.88%, Maruti Suzuki up by 1.72%, Tata Power up by 1.34%, Bajaj Auto up by 1.33% and Mahindra & Mahindra up by 1.17%. On the flip side, Bharti Airtel down by 2.97%, TCS down by 1.93%, Wipro down by 1.85%, HDFC Bank down by 1.33% and HDFC down by 1.15% were the top losers on the Sensex.

Meanwhile, the government may put on hold the implementation of the Employees' Provident Fund Organization’s (EPFO) circular that seeks to tighten the norms for initiation of inquiry against employers in provident fund cases  and clubbing of allowances with basic wages for computing the PF contribution.

After the circular was issued by the EPFO on November 30, the trade unions have started their protest with labour ministry, terming it anti-worker. According to the EPFO circular, the inquiry against employers can only be initiated after placing the actionable and verifiable information before the compliance officers. With regard to the time period for initiating inquiry, circular defined that inquiry or investigation should not go beyond seven years.

On protest of trade unions as well as employers, Labour Ministry may soon ask the EPFO to keep the circular in abeyance. The employers are also disappointed with this EPFO's move to deal with splitting of remuneration by them which will reduce their PF contribution obligation.

However, in the favor of worker, the circular defined the meaning of basic wages for the purpose of provident fund deductions, in which all such allowances which are ordinarily, necessarily and consistently paid to the employees, be treated as the basic wages.

The S&P CNX Nifty is currently trading at 5,867.10 down by 12.50 points or 0.21% after trading in a range of 5,886.05 and 5,860.20. There were 26 stocks advancing against 23 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Hindalco up by 3.21%, Maruti Suzuki up by 1.53%, Tata Power up by 1.29%, Bajaj-Auto up by 1.28% and ONGC up by 1.12%.

On the flip side, Bharti Airtel down by 3.14%, TCS down by 2.12%, Wipro down by 2.05%, Ultra Tech Cement down by 1.69% and Ambuja Cement down by 1.40% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng declined by 0.55%, KLSE Composite was down by 0.32%, Straits Times was lower by 0.32%, Seoul Composite was down by 0.60% and Taiwan Weighted was trading lower by 0.88%.

On the other hand, Shanghai Composite was up by 0.39%, Jakarta Composite was higher by 0.01% and Nikkei 225 has surged by 0.94%.