Indian equities pare gains; Sensex below 19,400 mark

Indian equities pared gains but continued its firm trade in the late afternoon session on account of profit booking in frontline counters and taking cues from subdued European counterparts. The sentiment on the street were dampened on reports that the country’s exports which was hit by global slowdown last year, is likely to remain sluggish during 2013 as well due to challenging economic conditions in western economies. Traders were seen piling some position in Oil & Gas, IT and PSU sector while selling was witnessed in Health Care, Bankex and Realty sectors. In the scrip specific development, Manaksia was soaring high after the board meeting which was held on December 27, 2012 approved the restructuring plan of the company. PC Jeweller continued its firm trade for second day in a row after debuting on the bourses yesterday as the IPO attracted bids for over 26 crore shares against 4.51 crore shares on offer, translating to 6.79 times subscription. Maruti Suzuki India was trading in green on reports that the company is considering setting up its first overseas assembly plant in Africa as it seeks to revive exports. Chettinad Cement was soaring high as the company’s board of directors will be meeting today to consider delisting of the company. Oil marketing companies HPCL, BPCL and IOC were trading in green as the petroleum ministry proposed a gradual rise in diesel prices by Re 1 per litre every month over a 10-month period.

On the global front, all the Asian markets were trading in green while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,850 and 19,300 levels respectively. The market breadth on BSE was positive in the ratio of 1397:1347 while 133 scrips remain unchanged.

The BSE Sensex is currently trading at 19,387.01, up by 63.21 points or 0.33% after trading in a range of 19,445.04 and 19,346.07. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index was trading up by 0.38% and 0.05% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.88%, IT up by 0.86%, PSU up by 0.57%, TECk up by 0.55% and Capital Goods up by 0.34% while, Health Care down by 0.38%, Bankex down by 0.31% and Realty down by 0.23% were the only losers on the sectoral space.

The top gainers on the Sensex were ONGC up by 2.35%, Reliance Industries up by 1.89%, Sterlite Industries up by 1.49%, Infosys up by 1.27% and Maruti Suzuki up by 1.19%.

On the flip side, Sun Pharma down by 1.36%, Jindal Steel down by 0.69%, M&M down by 0.68%, Tata Steel down by 0.64% and SBI down by 0.49% were the top losers on the Sensex.

Meanwhile, on the back of moderating industrial growth, India may not be able to meet investment target and 100 million job opportunities by 2022 envisaged by the government in the National Manufacturing Policy (NMP), as per the CII report. According to the CII-BCG report, by considering the moderate growth forecast by top management of manufacturing companies, the NMP targets for 2022 might be missed by a wide margin and India might end up losing $350 billion in incremental manufacturing GDP and also expected to create 70 million less jobs.

On the manufacturing sector, the report said that it has seen a slowdown during the last two years. Besides global crisis, domestic issues like regulatory burden, poor infrastructure, land acquisition, inflexible labour laws have contributed to the declining business confidence and fall in investments in the sector. Whereas in the NMP, the government expects to enhance the share of manufacturing in the GDP to 25 percent within a decade from 16-17 percent at present. 

On survey of over 70 senior representatives of top Indian manufacturing companies, 75 percent said that they expect the growth of manufacturing sector to be less than 7 percent. Industrial growth was 1.2 percent in the April-October period of current fiscal, which was less than 3.6 percent in the same period of previous fiscal. Further, to boost the manufacturing sector in India, the CII-BCG report recommended various steps that include setting up of an industry-government institutional framework to achieve the industrial agenda, which would be responsible for coordination across relevant diverse departments.

Moreover, the report said that the current restructuring of the global manufacturing opens a lot of opportunity for India, which will be done if India fixes the basic enablers, since countries like Indonesia, Thailand, Malaysia and Mexico are already building on the low cost competitive advantage by multiple actions.  The report also added that government should also increase investment in R&D and innovation as India is lagging behind its peers and spends less than 1 percent of its GDP in R&D and it also requested the private sector to aggressively invest in innovation and R&D.

The S&P CNX Nifty is currently trading at 5,888.05, up by 17.95 points or 0.31% after trading in a range of 5,909.75 and 5,881.80. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were BPCL up by 2.86%, ONGC up by 2.53%, Reliance Industries up by 1.99%, Wipro up by 1.37% and Cairn India up by 1.33%.

On the flip side, Sun Pharma down by 1.34%, Axis Bank down by 0.77%, Bank of Baroda down by 0.71%, Jindal Steel down by 0.68% and Power Grid down by 0.66% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite surged 1.24%, Hang Seng added 0.21%, Jakarta Composite surged 0.62%, KLSE Composite jumped 0.38%, Nikkei 225 soared 0.70%, KOSPI Composite increased 0.49%, Taiwan Weighted was up by 0.67%, and Straits Times rose 0.23%.

The European markets were trading on a mixed note with, France’s CAC 40 up 0.01%, Germany’s DAX descended 0.03% while the United Kingdom’s FTSE 100 added 0.15%.