Weak trade persist; Sensex below 19,900 mark

Indian equity markets continued its weak trade in the late afternoon session on account of selling in frontline counters. Weak global cues and sluggish macro-economic data mainly damped the sentiment of trade at D-street. The sentiments turned cautious after growth in Indian manufacturing slowed to a three month low in January, as new export orders lost momentum, a business survey showed on Friday. Traders were seen piling some position in Consumer Durables, Health Care and Oil & Gas sectors while selling was witnessed in Realty, Bankex and TECk sectors. In the scrip specific movement, BHEL was trading in red 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. Oil India (OIL) was trading in red after government set the floor price for divestment of 10% stake of the company at Rs 510 per share, a discount to yesterday’s closing price. Oil marketing companies HPCL, BPCL and IOC were trading firm after hiking the Aviation Turbine Fuel (ATF) by 2%, reversing the two month declining trend in rates.

On the global front, most of the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,050 and 19,900 levels respectively. The market breadth on BSE was negative in the ratio of 1287:1387 while 132 scrips remain unchanged.

The BSE Sensex is currently trading at 19,829.35, down by 65.63 points or 0.33% after trading in a range of 19,966.69 and 19,801.95. There were 13 stocks advancing against 17 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 0.08% and 0.07% respectively.

The few top gaining sectoral indices on the BSE were, Consumer Durables up by 2.07%, Health Care up by 0.77%, Oil & Gas up by 0.40%, Power up by 0.11% and Auto up by 0.07% while, Realty down by 1.01%, Bankex down by 0.65%, TECk down by 0.54%, IT down 0.51% and Capital Goods down by 0.35% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 1.73%, Cipla up by 1.42%, Tata Power up by 1.33%, Bajaj Auto up by 1.11% and Dr Reddy’s Lab up by 1.09%. On the flip side, Hindalco Industries was down by 1.94%, BHEL down by 1.84%, Hindustan Unilever was down by 1.66%, Bharti Airtel down by 1.33% and HDFC was down by 1.23% 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 6,013.80 down by 20.95 points or 0.35% after trading in a range of 6,052.95 and 6,004.60. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were BPCL up by 3.64%, Maruti Suzuki up by 1.76%, Cipla up by 1.49%, Tata Power up by 1.43% and Lupin up by 1.27%.

On the flip side, Jaiprakash Associates down by 4.14%, DLF down by 3.40%, Hindalco Industries down by 2.37%, HUL down by 1.96% and BHEL down by 1.84% were the major losers on the index.

Asian equity indices were mostly trading in green; Shanghai Composite gained by 1.41%, Jakarta Composite rose by 0.84%, Nikkei 225 up by 0.47%, Straits Times up by 0.17% and Taiwan Weighted up by 0.08%. On the other hand, Hang Seng was down by 0.03% and KOSPI Composite down by 0.21%.

KLSE Composite remained closed for trade today.

The European markets were trading in green with; France’s CAC 40 added 0.42%, Germany’s DAX gain 0.29% while the United Kingdom’s FTSE 100 edged higher by 0.32%.