Benchmarks trade lower in morning deals on sluggish global cues

Pressurized by sluggish global cues, Indian equity indices have made a lackluster start on Friday with Nifty breaching its crucial 5,900 mark. Overnight, in US, the S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs. Asian shares eased on Friday with investors turning cautious as weak euro zone growth data ahead of the G20 meeting on Feb 16 in Moscow.

Back home, investors reacted negatively to the SEBI’s action of imposing a total penalty of Rs 30.75 crore on 118 entities, including the promoters of erstwhile Bank of Rajasthan (BoR), for manipulative practices in the stock market. Lower-than-expected quarter earnings by some blue-chip companies also triggered selling. On the sectoral front, capital goods and fast moving consumer goods remained the only gainers while, realty, auto and consumer durables remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 678 shares on the gaining side against 1,237 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex opened at 19,449.83; about 47 points lower compared to its previous closing of 19,497.18, and has touched a high and a low of 19,487.24 and 19,420.39 respectively.

The index is currently trading at 19,440.37, down by 56.81 points or 0.29%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a week start with 36.45% stocks advancing against 60.31% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices decline 0.31% and 0.61% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.09% and FMCG up by 0.01% while, Realty down by 1.16%, Auto down by 0.93%, Consumer Durables down by 0.84%, IT down by 0.83% and TECk down by 0.78% were the losers on the index.

The top gainers on the Sensex were Tata Power up by 1.32%, Gail India up by 0.91%, HDFC Bank up by 0.46%, SBI up by 0.45% and Hindustan Unilever up by 0.38%.

On the flip side, Wipro was down by 1.81%, Dr Reddys Lab was down by 1.59%, Tata Motors was down by 1.50%, Coal India was down by 1.40% and RIL was down by 1.26% 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 opened at 5,869.95; about 27 points lower as compared to its previous closing of 5,896.95, and has touched a high and a low of 5,889.45 and 5,868.65 respectively.

The index is currently trading at 5,875.15, lower by 21.80 points or 0.37%. There were 16 stocks advancing against 33 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were BPCL up by 1.61%, Tata Power up by 1.37%, Gail up by 0.82%, Asian Paints up by 0.56% and Reliance Infrastructure up by 0.54%.

On the flip side, DLF down by 2.68%, Wipro down by 1.92%, Tata Motors down by 1.51%, HCL Tech down by 1.48% and Reliance Industries down by 1.47%, were the major losers on the index.

All the Asian equity indices were trading in the red; Hang Seng slipped 17.41 points or 0.07% to 23,395.84, KLSE Composite dipped 1.07 points or 0.07% to 1,629.82, Nikkei 225 tumbled 182.89 points or 1.62% to 11,124.39 and Straits Times was down by 12.99 points or 0.39% to 3,277.48.

On the flip side, Jakarta Composite rose 12.84 points or 0.28% to 4,601.51 and KOSPI Composite was up by 1.52 points or 0.08% to 1,981.13.

Markets in China and Taiwan remained shut for the Lunar New Year holiday.