Benchmarks continue weak trade in late afternoon session

Indian equities pared losses but continued its weak trade in the late afternoon session on account of profit booking in frontline counters and taking cues from subdued European counterparts. The market was on cautious note after the country’s official growth forecast was lowered to between 5.7 and 5.9 percent for this fiscal year, in the Finance Ministry's mid-year economic review. The budgeted forecast for GDP growth in the 2012-13 fiscal year was 7.6 percent, but growth was just 5.4 percent in the first half of the year. Traders were seen piling some position in Metal, Auto and Realty sectors, while selling was witnessed in TECk, IT and Consumer Durables sectors. In the scrip specific development, Indian Hotels Company, a Tata Group-controlled company is trading in green after it opened a 63-room Vivanta hotel in Madikeri, Coorg, near Bangalore.

On the global front, most of the Asian markets were trading in red barring Shanghai Composite and Nikkei 225 while the European markets were trading on a mixed note. The European leaders wrapped a two-day summit and made a halting progress as leaders postponed decision making, keeping in view the next election cycle. Besides, German Chancellor Angela Merkel stressed at a press conference after the marathon talks that the size of rescue fund is likely to be less than 20 billion euros and not as large as 100 billion euros. The smaller size of the rescue fund will restrict the European Central Bank’s ability to make a dent in the future banking rescue efforts. 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 positive in the ratio of 1489:1246 while 131 scrips remain unchanged.

The BSE Sensex is currently trading at 19,261.15, down by 56.10 points or 0.29% after trading in a range of 19,346.78 and 19,241.53. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.54% and 0.52% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.26%, Auto up by 0.79%, Realty up by 0.73%, PSU up by 0.58% and Power up by 0.54%. While, TECk down by 1.34%, IT down by 1.30%, Consumer Durables down by 0.79%, Capital Goods down by 0.43% and FMCG down by 0.40% were the only losers on the index.

The top gainers on the Sensex were Hindalco Industries up by 2.63%, Sterlite Industries up by 2.25%, Jindal Steel up by 1.74%, Maruti Suzuki up by 1.73% and Bajaj Auto up by 1.38%. On the flip side, Bharti Airtel down by 3.16%, TCS down by 2.77%, HDFC down by 1.85%, BHEL down by 1.80% and HDFC Bank down by 1.73% were the top losers on the Sensex.

Meanwhile, in order help generate more demand during the stake sale process as investors won't have to worry about providing funds upfront for making bids, the finance ministry has urged the market regulator Securities and Exchange Board of India (SEBI) to do away with the 25 per cent margin money requirement for institutions bidding during the PSU stake sale through auction route.  As per the existing norms, institutional investors have the option of submitting bids with 25 per cent margin money under the OFS or auction route.

The ministry has also urged the SEBI to extend the time for accepting bids by the stock exchanges to 1730 hours from 1530 hours during the auction process. These steps by the finance ministry will help to generate better response for PSU shares since these are off-market deals and need not be restricted to equity market timings. Trading in equity markets happen between 0900-1530 hours.

In the current fiscal, the government has fixed a target of raising Rs 30,000 crore from stake sale in PSUs. So far this fiscal, the government has raised over Rs 6,900 crore. Earlier last week, the government raised Rs 6,000 crore through 10 per cent stake sale in NMDC.

The S&P CNX Nifty is currently trading at 5,861.70, down by 17.90 points or 0.30% after trading in a range of 5,886.05 and 5,856.05. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Hindalco Industries up by 2.88%, Jindal Steel up by 1.65%, Sesa Goa up by 1.65%, Bajaj Auto up by 1.59% and Maruti Suzuki up by 1.51%.

On the flip side, Bharti Airtel down by 3.26%, TCS down by 3.01%, HDFC down by 1.91%, BHEL down by 1.87% and HDFC Bank down by 1.79% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng declined by 0.41%, KLSE Composite was down by 0.29%, Straits Times was lower by 0.45%, Seoul Composite was down by 0.60%, Jakarta Composite declined by 0.18% and Taiwan Weighted was trading lower by 0.88%. On the other hand, Shanghai Composite was up by 0.45% and Nikkei 225 has surged by 0.94%.

The European markets were trading on a mixed note with, France’s CAC 40 lost 0.37%, Germany’s DAX ascended 0.23% while the United Kingdom’s FTSE 100 lost 0.13%.