Benchmarks slip to intra-day’s low; BHEL’s disappointing Q3 earning weighs

Slipping to intra-day’s low, benchmark equity indices are currently languishing in red terrain on account of additional selling pressure in Realty, Capital goods and Technology stocks.  Weak global cues and sluggish macro-economic data mainly damped the sentiment of trade at D-street. Underscoring the risks to Asia's third largest economy from weak global demand, particularly in Europe, growth in Indian manufacturing slowed to a three month low in January, as new export orders lost momentum, a business survey showed on Friday. On the global front, Asian shares are trading deep in red terrain as a tepid Chinese manufacturing report dented sentiment, leaving investors on tenterhooks ahead of U.S. nonfarm payroll data. Closer home, disappointment was also met on account of index heavyweight BHEL Q3 numbers. The stock plummeted over 3% on reporting 17.50% drop in Q3FY13 net profit at Rs 1181.85 crore as compared to Rs 1432.61 crore in the corresponding quarter previous year. Thus, gyrating near intra-day’s low, 30 share barometer index, Sensex, on BSE was trading below 19850 level, with a cut of over quarter of a percent. In the similar way, widely followed 50 share index, Nifty, on NSE too slipping into negative territory was trading off 6050 bastion. Broader indices, in the meanwhile, managed to keep their head above the water, albeit with slender gains. The overall market breadth on BSE is in the favour of advances which thrashed declines in the ratio of 1272:1226, while 122 shares remained unchanged.

The BSE Sensex is currently trading at 19830.64, down by 64.34 points or 0.3 2% after trading in a range of 19,966.69 and 19830.20. There were 12 stocks advancing against 18 declines on the index.

The broader indices managed to hold their fort in green; the BSE Mid cap and Small cap indices were trading up by 0.06% and 0.17% respectively.

The few top gaining sectoral indices on the BSE were, Consumer Durables up by 1.85%, Health Care up by 0.79%, Oil & Gas up by 0.34%, while, Realty down by 1.93%, Capital Goods down by 0.83%, TECK down by 0.59%, Bankex down by 0.47% and Power down 0.45% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 1.99%, Bajaj Auto up by 1.59%, Cipla up by 1.38%, Dr Reddys Lab up by 1.35% and Tata Power up by 0.59%.

On the flip side, BHEL down by 3.36%, Bharti Airtel down by 1.97%, Hindustan Unilever was down by 1.73%, Hero MotoCorp was down by 1.44% and Hindalco Industries was down by 1.30 % were the top losers on the Sensex.

Meanwhile, after surging to six months high level in December, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to three months low of 53.2 in January against its previous reading of 54.7 in December, thereby underscoring the risks to Asia's third largest economy from weak global demand, particularly in Europe.

Slower expansion in new orders and power outages mainly slowed the growth momentum in the manufacturing sector. Despite that, Indian goods-producing sector has shown output growth advancement for the forty-sixth consecutive month. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years.

Meanwhile, the rise in the factory output, although solid, was the slowest recorded in three months amid evidence from the survey panel that ongoing issues with the supply of power had restricted growth (albeit to a lesser degree than seen at times during 2012).

New orders and export sales both increased at manufacturing companies in India in January. While, the volume of incoming new work at manufacturers in India increased in January. Total new business rose solidly, although growth eased from December. Meanwhile, new export orders increased for the fifth consecutive month, and also at a solid rate. The new orders sub-index in the survey, a reliable gauge of future output, slipped to 54.6 from 58 in December, showing the slowest pace of growth since October.

Further, January data signaled increased staffing level in the Indian goods-producing sector, amid reports of higher workloads. However, the pace of job creation was slight and unchanged from December.

Meanwhile, input and output prices both increased in January, with rates of inflation again marked. Input prices in the Indian manufacturing sector rose for the forty-sixth consecutive month with respondents indicating that fuel and raw material prices had increased, while Output charges were raised to protect margins in the face of higher costs. 

Nevertheless, the survey, which showed input and output prices rising at a slower pace during the month, suggests that India's inflation rate, which slowed to a three-year low of 7.18 per cent in December, is unlikely to change much, at least for now. 'Input and output price inflation continued to ease, albeit only gradually, supporting the case for the RBI's cautious policy rate cut earlier this week,' the report said.

The S&P CNX Nifty is currently trading at 6,014.95 down by 19.80 points or 0.33% after trading in a range of 6,052.95 and 6,012.00. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 2.25%, Bajaj-Auto up by 1.94%, Lupin up by 1.75%, Dr Reddy’s LAB up by 1.44% and Cipla up by 1.40%.

On the flip side, Jaiprakash Associates down by 4.89%, DLF down by 4.54%, BHEL down by 3.34%, BHarti Airtel down by 2.15% and HUL down by 1.94% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite gained by 1.41%, Jakarta Composite rose by 1.12%, Nikkei 225 up by 0.47%, Straits Times up by 0.12% and Taiwan Weighted up by 0.08%.

On the other hand Hang Seng down by 0.23% and KOSPI Composite down by 0.21%. KLSE Composite remained closed for trade today.