Weak trade persist in late afternoon session

Indian equity markets added losses to continue its weak trade in the late afternoon session on account of selling in frontline counters and taking cues from European counterparts. Hawkish comments from Reserve Bank of India (RBI) Governor Duvvuri Subbarao, which have thwarted expectations of interest rate cut beginning this month, mainly weighing heavily on rate sensitive counters, has soured the sentiment at D-street. Also, the IMF in its reports said that Indian economy faces near-term risks of worsening bank asset quality and pressures on systemic liquidity. Traders were seen piling some position in Oil & Gas, CD and HC sectors while selling was witnessed in Auto, Metal and Bankex sector. The sentiments did try to turn a bit optimistic after the World Bank Chief Economist Kaushik Basu stated that India’s growth is expected to inch closer to that of China in near future. The World Bank expects that by 2015, the growth rate of China would be 7.9% and that of India 7%.

In the scrip specific movement, Arvind Remedies is trading in green ahead of board approval for warrants issue. Orient Refractories is trading firm after the promoters decided to sell stake in the company. Bharti Infratel is trading in green after foreign brokerage firm Morgan Stanley initiated coverage on the company with an overweight rating.

On the global front, all the Asian markets were trading in red barring Straits Times and Jakarta Composite while the European markets were too trading on a pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,050 and 20,000 levels respectively. The market breadth on BSE was negative in the ratio of 994:1823 while 126 scrips remain unchanged.

The BSE Sensex is currently trading at 19,920.95, down by 65.87 points or 0.33%, after trading in a range of 20,009.36 and 19,884.97. There were 9 stocks advancing against 21 declines on the index.

The broader indices witnessed some additional selling pressure; the BSE Mid cap and Small cap index were trading lower by 0.68% and 0.62% respectively.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.04%, Consumer Durables (CD) up by 0.36%, Health Care (HC) up by 0.17% and Fast Moving Consumer Goods (FMCG) up by 0.11%. While, Auto down by 1.90%, Metal down by 1.10%, Bankex down by 0.93%, PSU down by 0.66% and Capital Goods (CG) down by 0.58% were the top losers on the index.

The top gainers on the Sensex were RIL up by 2.79%, Dr. Reddy’s Lab up by 1.73%, TCS up by 1.11%, Sterlite Industries up by 0.90% and NTPC up by 0.55%.

On the flip side, Tata Motors was down by 2.75%, Jindal Steel down by 2.58%, Maruti Suzuki down by 2.54%, Mahindra & Mahindra down by 2.43% and Hindalco Industries down by 2.36% and were the top losers on the Sensex.

Meanwhile, the apex auto lobby, Society of Indian Auto Industry (SIAM) has asked the Indian government to stop providing subsidies on diesel and demanded for deregulation of diesel prices. As per the automotive body, instead of providing subsidy on diesel, the government can offer subsidy to farmers by providing credit.

According to SIAM, this move will probably bring down the gap between the prices of petrol and diesel, which might lead to a positive impact on the Indian economy. Further, SIAM reported that industry experts are also expecting a hike in diesel prices in the declaration of Union Budget 2013, which is expected to come soon.

On auto sector outlook, SIAM is not expecting any important improvement in the Indian auto sector in last quarter of current fiscal year as the auto sales declined in last quarter of 2012 as well as last year. Further apex auto lobby added that the next year's sales depend on the action that government will take in coming budget regarding the infrastructure spending.

The S&P CNX Nifty is currently trading at 6,031.40, down by 25.20 points or 0.42% after trading in a range of 6,055.95 and 6,018.85. There were 14 stocks advancing against 36 declines on the index, while one stock remains unchanged.

The top gainers of the Nifty were Reliance up by 2.67%, Dr. Reddy’s Lab up by 1.66%, HCL Tech up by 1.51%, TCS up by 1.03% and Power Grid up by 0.81%.

On the flip side, Tata Motors down by 3.06%, JP Associate down by 3.06%, Jindal Steel down by 2.77%, Mahindra & Mahindra down by 2.58% and Maruti Suzuki down by 2.49%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai declined 0.70%, Hang Seng declined 0.10%, KLSE Composite down by 0.17%, Nikkei 225 was down by 2.56%, KOSPI Composite decreased 0.32% and Taiwan Weighted was down by 0.83%. On the flip side, Straits Times up by 0.26% and Jakarta Composite added 0.05% were the only gainers amongst Asian pack.  

The European markets were trading in red with; France’s CAC 40 lost 0.27%, Germany’s DAX edged lower by 0.25% while the United Kingdom’s FTSE 100 dropped 0.45%.