Markets pare early gains on disappointing Dec IIP numbers

Indian equity markets gave up almost all its early gains in the late morning session on Tuesday, as December Index of Industrial Production (IIP) witnessed sluggish growth. The Sensex was trading up marginally by 23.25 points, while Nifty went down 1.10 points. Meanwhile, India's annual industrial output growth measured by IIP, contracted by 0.6% at 179.3 for the month of December 2012 against contraction of 0.1% in the previous month, weakening markets sentiments. In currency markets, rupee extended fall against the dollar on Tuesday amid sustained demand for greenback from importers. On sectoral front, oil stocks were trading higher, weighed by ONGC’s gains, a day after reporting October-December net profit in line with the street expectations and Hindustan Petroleum Corp’s gains ahead of its October-December results later in the day. Moreover, the finance ministry extended some comfort to the public sector oil marketing companies by providing Rs 25,000 crore additional cash subsidy for the fiscal for selling diesel, domestic LPG and PDS kerosene at controlled prices. Select stocks from auto, PSU and healthcare were trading up, while, realty, Metal and IT stocks were trading down. In global markets, Asian shares were steady, with many regional bourses shut for holidays. Back home, the market breadth favoring negative trend; there were 1,563 shares on the losing side against 796 shares on the gaining side while 106 shares remain unchanged.

The BSE Sensex is currently trading at 19,483.82 up by 23.25 points or 0.12% after trading in a range of 19,521.72 and 19,438.53. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.86% and Small cap index was down by 0.88%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.94%, Health Care up by 0.61%, PSU up by 0.36%, Auto up by 0.24% and Consumer Durables up by 0.11%. While, Realty down by 4.81%, Metal down by 0.85%, IT down by 0.77%, Power down by 0.76% and TECk down by 0.66% were the top losers on the index.

The top gainers on the Sensex were ONGC up by 2.79%, Sun Pharma up by 1.80%, Bajaj Auto up by 0.98%, Tata Motors up by 0.89%, Bharti Airtel up by 0.70.

On the flip side, Jindal Steel down by 3.09%, Sterlite Industries down by 1.31%, Infosys down by 1.28%, Tata Power down by 0.92% and Hero MotoCorp was down by 0.86% were the top losers on the Sensex.

Meanwhile, to seek State Finance Ministers approval on design of Goods and Services Tax (GST) Bill, Union Finance Minister P Chidambaram will meet the ministers on February 14, so that a broad outline of the indirect tax regime can be included in the 2013-14 Budget, which is scheduled to be presented on February 28. For FY14 budget, finance minister is expected to recommend certain changes in the GST Bill to the Parliamentary Standing Committee on Finance.

Last month, the Empowered Committee of State Finance Ministers had reached a broad consensus on the design of GST, under which the states will be free to decide on the time of its introduction. Further, the committee also decided to suggest the finance ministry for incorporating the provisions to allow the states to opt out of the GST fold and thereby, making it optional. Moreover, states had also agreed to a lower payment of Rs 34,000 crore for phasing out the Central Sales Tax, a pre-condition for rollout of the GST.

The committee has also agreed for a single rate of GST and there would be a floor rate with a band, giving freedom to states to fix their own rates. The government is also expected to firm up the indirect tax proposals for the coming budget on February 14 meeting.

The S&P CNX Nifty is currently trading at 5,896.75 down by 1.10 points or 0.02% after trading in a range of 5,913.30 and 5,886.45. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were ONGC up by 2.84%, Sun Pharma up by 1.75%, HCL Tech up by 1.50%, Bajaj Auto up by 1.02% and Dr Reddy’s up by 0.87%.

On the flip side, JP Associate down by 4.74%, Jindal Steel down by 2.99%, DLF down by 2.54%, IDFC down by 1.99% and Reliance Infrastructure down by 1.41% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Jakarta Composite surged 0.61% and Nikkei 225 soared 2.37%.

On the flip side, KOSPI Composite was down by 0.15%.

Hong Kong, China, Taiwan, Singapore and Malaysia are all closed. Hong Kong and Singapore will resume trading on February 13 and Taiwan will reopen on February 14.