Sensex slips back in red; Auto stocks bleed

After recouping losses in a knee jerk reaction to the pleasant WPI figures, benchmark equity indices have again slipped into red terrain on account of fresh selling pressure, as wary investors cashed out their profits at higher levels. In a welcome move, the wholesale price index (WPI), India's main inflation gauge, cooled down to four year low at 6.62% (Provisional) for the month of January, 2013 as compared to 7.18% for December and 7.23% during the corresponding month of the previous year. Thus, 30 share index, Sensex, after losing 50 points, were trading sub 19600 level, likewise, 50 share index, Nifty, despite slipping over quarter of points, was oscillating near 5900 level. Further, broader indices slipped faster and deeper in red terrain.

On the global front, Asian pacific shares rose on improving risk sentiment while the yen steadied ahead of the weekend meeting of G20 finance and central bank officials, for clues to their views about global growth and the role currencies play in the economies of individual member countries.

Closer home, stocks from Information Technology (IT), Metal and Fast Moving Consumer Goods counters, held their fort in green terrain. On the flip side, Auto, Capital Goods and Health Care counters, were the worst performing sectoral indices on BSE. Meanwhile, PSU oil marketing companies, viz, BPCL, HPCL and IOC, are trading lower even as reports suggest of petrol and diesel prices to go higher as early as Friday. The overall Market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1745:733, while, 113 shares remained unchanged.

The BSE Sensex is currently trading at 19557.63, down by 50.45 points or 0.26% after trading in a range of 19639.83 and 19549.22. There were 13 stocks advancing against 16 declines on the index and one remained unchanged.

The broader indices were trading in red; the BSE Mid cap index and Small cap index was trading lower by 1.17% and 1.21% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.40%, Metal up by 0.24%, FMCG up by 0.22%. While, Auto down by 1.60%, Capital Goods down by 1.52%, Health Care down by 1.21%, Consumer Durables and Power down by 1.16% were the top losers on the index.

The top gainers on the Sensex were Hindustan Unilever up by 2.18%, Gail India up by 1.39%, TCS up by 1.29%, Coal India up by 1.21% and HDFC Bank up by 0.99%

On the flip side, Bharti Airtel down by 4.18%, Wipro down by 3.08%, Maruti Suzuki was down by 2.89%, Tata Motors was down by 2.74% and Dr Reddys Lab was down by 1.95%were the top losers on the Sensex.

Meanwhile, in a pleasant surprise, the wholesale price index (WPI), India's main inflation gauge, cooled down to four year low at 6.62% (Provisional) for the month of January, 2013 as compared to 7.18% for December and 7.23% during the corresponding month of the previous year. Build up inflation in the financial year so far was 5.09% compared to a build-up of 6.15% in the corresponding period of the previous year. This positive surprise for the markets notwithstanding, the Reserve Bank of India (RBI) is likely to move cautiously on monetary easing in March policy review.

As per the government data, manufactured products, which carry weight of almost 65% in the index, rose by 0.2% to 148.3 (Provisional) from 148.0 (Provisional) for the previous month. The index for ‘Food Articles’ group declined by 0.7% to 165.9 from 167.1 in the previous month.

While, the index for primary articles group, which has a weightage of 20.12% in overall WPI and includes food, non-food and minerals group rose by 0.6% to 221.4 from 220.0 of the previous month. The index for ‘Food Articles’ group rose by 0.8% to 213.8 from 212.2 in the previous month, while, the index for ‘Non Food Articles’ group declined by 0.3% at 202.3 (Provisional) from 202.9 (Provisional) for the previous month. However, the index for ‘Minerals’ group rose by 1.8% to 347.0 (Provisional) from 340.8 (Provisional) for the previous month.

Inflation has been trending down for the past 4 months, with respite seen on the 'core' component. The core inflation for January came in at 4.1%, lower than 4.2% in December last year. However, the widening wedge between WPI and CPI remains to be noted. Earlier this week data showed that retail inflation remained in double digits at 10.79% in January, driven by higher prices of vegetables, edible oil, cereals and protein-based items.

Meanwhile, March inflation, which is expected to be lower than RBI’s projection could give the apex bank the required comfort to go ahead and slash rates by 25 basis points in March. India’s central bank lowered its key policy rate for the first time in nine months in January, but struck a cautious note on further easing as it waits to see how the government’s upcoming budget aims to bring a bloated fiscal deficit under control.

The S&P CNX Nifty is currently trading at 5,907.15, down by 25.80 points or 0.43% after trading in a range of 5,940.20 and 5,905.60. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were HUL up by 1.51%, Coal India up by 1.28%, Gail India up by 1.13%, TCS and HDFC Bank were up by 0.95% each.

On the flip side, PowerGrid down by 4.19%, Bharti Airtel down by 4.11%, Siemens down by 3.35%, Wipro down by 3.15% and Tata Motors down by 2.92% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng surged 0.76%, Jakarta Composite rose 0.45%, KLSE Composite added 0.11%, KOSPI Composite was up by 0.18% and Nikkei 225 increased 0.50%. On the flip side, Straits Times was down by 0.15%.

China and Taiwan markets remained closed for the trade today.