Indian equities trim gains to continue weak trade

Indian equity markets trimmed gains to continue its weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in frontline counters and taking cues from the European counterparts. The sentiments on the street were on cautious note after Standard & Poor’s (S&P) issued an analysis saying a negative outlook on India has a more than 50 percent possibility of getting confirmed. This is despite Moody’s reaffirmation of India’s rating as stable. Traders were seen selling in Consumer Durables, Realty and TECk sector. The appreciation of Indian currency on government’s stunt of increasing gold import tax by 2% points to 6%, is mainly weighing heavily on IT pivotal, given these firms derive lion chunk of their revenue from exports. In the scrip specific movement, Jet Airways was trading in green on reports that Abu Dhabi's Etihad Airways will finalize a deal to buy a stake in the airline company on Jan 25, in what would be the first such investment by a foreign carrier in an Indian airline since rules were relaxed last year.

On the global front, the Asian markets were trading on a mixed note while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,100 and 20,100 levels respectively. The market breadth on BSE was negative in the ratio of 1119:1606 while 135 scrips remain unchanged.

The BSE Sensex is currently trading at 20,058.12, down by 43.70 points or 0.22% after trading in a range of 20,156.86 and 20,053.95. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap index were trading lower by 0.27% and 0.23% respectively.

There were no gainers on the BSE, while, Consumer Durables down by 1.27%, Realty down by 0.99%, TECk down by 0.50%, Capital Goods down by 0.50% and IT down by 0.49% were the top losers on the index.

The top gainers on the Sensex were NTPC up by 1.70%, Sun Pharma up by 1.34%, Hindustan Unilever up by 1.20%, M&M up by 0.77% and Bajaj Auto up by 0.75%. On the flip side, Gail India down by 4.15%, Tata Motors down by 1.95%, Hindalco Industries down by 1.83%, Tata Power down by 1.43% and HDFC Bank down by 0.89% were the top losers on the Sensex.

Meanwhile, as per ratings agency Standard & Poor's, Indian and Chinese banks may find it difficult to raise funds to meet the higher capital requirements under Basel III norms due to their rising bad assets, but the banks from the Asia-Pacific region are better placed to meet the new norms.

S&P’s expect banks in high-growth systems such as India and China to face challenges in maintaining or raising capital ratios to keep pace with growth in risk assets’. Further, it estimated that capital shortfall of major Indian and Chinese banks could reach about $100 billion by 2019.

Meanwhile, Asia Pacific banks were better placed than their peers elsewhere and are poised to take the global lead in implementing Basel III in 2013, S&P added. Further it stated that most countries in the Asia-Pacific region have published their final set of Basel III capital reform regulations effective from January 2013 and these banks will adopt the new capital regulations ahead of their global peers.

Further, as per the rating agency, the US has also delayed the implementation and timetable of the Basel-III capital reforms, while a final draft is under discussion in the European Union. Moreover, last month, the Reserve Bank of India (RBI) also delayed the starting date for implementation of the Basel III norms to April 2013. Back on January 16, the finance ministry has also asked the RBI to ease capital adequacy norms for Indian banks.

The S&P CNX Nifty is currently trading at 6,072.20, down by 10.10 points or 0.17% after trading in a range of 6,101.30 and 6,067.35. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Asian Paints up by 2.96%, NTPC up by 1.86%, ACC up by 1.85%, Kotak Bank up by 1.85% and Sun Pharma up by 1.54%.

On the flip side, Gail India down by 4.33%, Tata Motors down by 1.72%, Hindalco Industries down by 1.71%, Lupin down by 1.61% and HCL Tech down by 1.60% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng jumped 0.29%, KOSPI Composite added 0.49%, Straits Times was up by 0.11% and Taiwan Weighted was up by 0.44%. On the flip side, Shanghai Composite down by 0.56%, Jakarta Composite declined 0.80%, KLSE Composite dropped 0.64% and Nikkei 225 declined 0.35%.

The European markets were trading in red with; France’s CAC 40 lost 0.44%, Germany’s DAX dropped 0.27% while the United Kingdom’s FTSE 100 edged lower by 0.02%.