Benchmarks slip to intra-day’s low; Nifty dips into red zone

Benchmark equity indices, shrugging off positive Q3 Infosys’ earnings, pared part of its early gains, languishing near their intra-day’s low level, on account of intense selling pressure in stocks from defensive Fast Moving Consumer Goods, Oil & Gas and Public Sector Undertaking counters. However, aftermath of flattish IIP data seems to be weighing on the sentiment to some extent. India's annual industrial output growth measured by index of industrial production (IIP), contracted by just 0.1% at 167.3 for the month of November 2012, although way below the robust of 8.2% growth figure in the previous month.

Nevertheless, bulls continue to draw support from Information Technology, Technology and Consumer Durable counters, which emerged to be gainers on BSE sectoral chart. Further, even negative global set-up also added to the pressure. At intra-day’s low, barometer 30 share index, Sensex, was oscillating above 19650 psychological level, while 50 share widely followed index, Nifty, although slipping in red terrain was holding above 5950 bastion. Bout of selling pressure, which was witnessed in broader space, also added to the losses of Midcap and Smallcap indices, which were now trading with cut of over half a percent.

On the global front, Asian shares were reeling under pressure on Friday as a pick-up in Chinese inflation prompted profit-taking, although an improving outlook for global economies curbed losses. China's annual consumer inflation sped to a seven-month high of 2.5 percent in December, narrowing the scope for further policy easing to aid growth and leading Asian shares to give up early gains.

Closer home, Infosys which surged over 16 per cent in morning trade to register its highest percentage gain since May 18, 2009 after the IT major surprised the street and analysts by increasing its FY13 guidance, mainly spurted optimism across Information Technology (IT) space. However, India's industrial output, which shrank in November after a spurt the previous month, despite denting hopes of a recovery in economic growth, strengthened the case for an interest rate cut later this month, could bring some recovery into markets in the later part of the session. The overall market breadth on BSE was in the favour of declines which have thumped advances in the ratio of 1626: 954, while 120 shares remained unchanged.

The BSE Sensex is currently trading at 19694.78, up by 31.23 points or 0.16% after trading in a range of 19839.80 and 19694.78. There were 5 stocks advancing against 25 declines on the index.

The broader indices too witnessed additional selling pressure; the BSE Mid cap and Small cap indices were trading lower by 0.66% and 0.59% respectively.

The top gaining sectoral indices on the BSE were, IT up by 8.35%, TECk up by 5.93%, Consumer Durables up by 0.91%, while, FMCG down by 2.05%, Oil & Gas down by 1.14%, PSU down by 1.04%, Power down by 1.03% and Bankex down by 0.96% were the top losers on the index.

The top gainers on the Sensex were Infosys up by 16.10%, Wipro up by 3.55%, TCS up by 3.42%, Sterlite Industries up by 1.34% and Maruti Suzuki up by 0.50%.

On the flip side, Hindustan Unilever was down by 2.72%, ITC was down by 2.42%, ONGC was down by 2.32%, Sun Pharma was down by 1.80% and Tata Power was down by 1.75% were the top losers on the Sensex

Meanwhile, in a positive surprise, India's annual industrial output growth measured by index of industrial production (IIP), contracted by just 0.1% at 167.3 for the month of November 2012, although way below the robust 8.2% growth figure in the previous month. Nevertheless, the figure was much higher against the street’s expectation of -0.6%. The cumulative growth for the period April-November 2012-13 over the corresponding period of the previous year stands at 1.0%. Meanwhile, October IIP figure was revised to 8.3 v/s 8.2% (Provisional).

The industrial output has mostly remained sluggish in the previous few months, with months of August and October being an exception, as growth in all three sectors viz. mining, manufacturing and electricity remained subdued.

After staging expansion in the previous month, the manufacturing sector, which constitutes about 75.53 percent of industrial production, grew by mere 0.3% from a year earlier. Mining sector, which constitutes about 14.6 percent of industrial production, witnessed massive contraction of 5.5% (Y-O-Y) and contraction of 0.1 per cent in October. Further, growth in electricity sector too rose to 2.4 percent versus a 5.5 percent in the previous month. The cumulative growth in the three sectors during April-November 2012-13 over the corresponding period of 2011-12 has been (-) 1.5%, 1.0% and 4.4% respectively.

Further, disappointingly, Capital goods output, a key investment indicator, snapping the declining trend, contracted shockingly at 7.7% against a growth of 7.5% in October. Consumer goods, witnessed growth of mere 1% against double digit expansion of 13.2% in October, driven by growth of Consumer durables and Consumer non-durables at 1.9% and 0.3% respectively.

Factory Output was depressed by weak investments as well as the Diwali holiday, which was in November last year, whereas in 2011 it fell in October. Diwali is one the biggest festivals in India, with many factories shutting for several days. However, Planning Commission Chairman Montek Singh Ahluwalia said that the November IIP data is in line with expectations. 'October's IIP growth was on the back of last year's growth trend,' he said.

The S&P CNX Nifty is currently trading at 5,965.05, down by 3.60 points or 0.06% after trading in a range of 6,018.85 and 5,964.80. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Infosys up by 15.33%, Wipro up by 3.41%, TCS up by 3.30%, Sesa Goa up by 1.06% and HCL Tech up by 0.74%.

On the flip side, Reliance Infra down by 3.10%, HUL down by 2.97%, ITC down by 2.46%, ONGC down by 2.43%, IDFC down by 2.28% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 1.96%, Hang Seng slipped 0.44%, KLSE Composite decreased 0.30%, Straits Times dipped 0.44%, KOSPI Composite tumbled 0.50% and Jakarta Composite down by 0.21%.

On the flip side Nikkei 225 was up by 1.40% and Taiwan Weighted was up by 0.10%.