Weakness persist in market; metal stocks trading sharply lower

Indian equity markets, which opened lower this morning, slipped deeper into the red in the late morning session on Thursday, as selling pressure gathered force. Benchmarks extended losses by falling near about 1% tracking global cues. Meanwhile, investors were trading cautiously amid the Budget session of Parliament, which began today. In currency markets, Indian rupee depreciated against dollar, amid fresh demand for dollar from oil importers. On sectoral front, metal stocks were trading sharply lower, tracking weakness in global industrial metal prices, while banking stocks fell a day after RBI data showed that the sector's loan growth continues to be a concern. Moreover, RBI data showed banks registered an 8.7% growth in advances this fiscal year, compared to 11.2% in the previous year. In global markets, Asian shares mostly fell after Federal Open Market Committee meeting minutes showed concern among Federal Reserve officials over the central bank's stimulus measures, while Shanghai fell heavily on continued concerns over policy in China relating to residential housing. Back home, the market breadth favoring negative trend; there were 1,576 shares on the losing side against 756 shares on the gaining side while 106 shares remained unchanged.

The BSE Sensex is currently trading at 19,464.04, down by 178.71 points or 0.91% after trading in a range of 19,554.65 and 19,447.64. There were 7 stocks advancing against 23 declines on the index.

The broader indices were also trading in red; the BSE Mid cap index was down by 0.80% and Small cap index was down by 0.99%.

The top losing sectoral indices on the BSE were, Metal down by 2.14%, Capital Goods down by 1.37%, Realty down by 1.28%, FMCG down by 1.19% and Bankex down by 1.15% while, Consumer Durables up by 0.41% was only the gainer on the index.

The top gainers on the Sensex were Bajaj Auto up by 0.66%, Cipla up by 0.45%, Bharti Airtel up by 0.39%, Tata Power up by 0.21% and NTPC up by 0.20%.

On the flip side, Sterlite Industries was down by 3.33%,  Hindalco Industries was down by 2.42%, Tata Motors was down by 2.32%, Jindal Steel was down by 2.25% and ICICI Bank was down by 2.24% were the top losers on the Sensex.

Meanwhile, as per the Commerce and Industry Minister Anand Sharma, exports in 2012-13 may miss the target and settle at $300 billion as against the $360 billion set for the current financial year, mainly on the back of slowdown in demand in traditional markets.

Reasoning the exports slowdown, Sharma said, ‘exports have not grown as we were hoping because of the contraction in global trade, the continuing turbulence in the Euro-zone area and the fall in demand in some of the traditional destinations’. However, Sharma expressed optimism that the numbers of February and March will remain strongly positive.

After eight months of contraction, India's exports rose at an annual rate of 0.82% at $25.58 billion in January. However, exports between April and January fell 4.86% to $239.68 billion as against $251.93 billion in the same month of the previous year. Meanwhile, cumulative value of imports for the period April-January, 2012-13 was at $406.85 billion as against $406.82 billion registering a positive growth of 0.01% over the same period last year. The trade deficit for April-January, 2012-13 was estimated at $167.16 billion much higher than the deficit of $154.89 billion during April-January, 2012.

On the widening trade deficit, Sharma said the country needs to look at ways to reduce its imports as a lot of foreign exchange is lost. He further added that gold imports are a matter of concern and a balanced approach is needed towards gold import. India, which imported about 750 tons of gold last year, with 60 percent of that through banks has already increased the import duty on gold, which now stands at 6%.

The S&P CNX Nifty is currently trading at 5,892.35 down by 50.70 points or 0.85% after trading in a range of 5,921.15 and 5,886.55. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were HCL Tech up by 1.16%, Bajaj-Auto up by 0.81%, Power Grid up by 0.55%, Cipla up by 0.47% and Bharti Airtel up by 0.46%.

On the flip side, Sesa Goa down by 2.85%, Jaiprakash Associates down by 2.68%, Tata Motors down by 2.32%, ICICI Bank down by 2.30% and Jindal Steel down by 2.29%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite 3.44%, Hang Seng declined 1.72%, KLSE Composite dipped 0.57%, Nikkei 225 dropped 1.39%, Straits Times contracted 0.56%, KOSPI Composite decreased 0.47% and Taiwan Weighted was down by 0.89%.

On the flip side, Jakarta Composite was up by 0.19%.